BBAW Guest: Fashionista Piranha on KIVA

As visitors to my book blog know, I'm big on charity. I regularly include donations to the winners' choice as contest prizes, and frankly it has become one of the most popular features for my visitors. It warms the cockles of my heart that book readers have such a wide variety of organizations that they support. But today I want to turn the tables a bit and trumpet one of my favorite charities, and talk about why my number one stop on the web is Kiva.org.

Kiva recently celebrated its third year of helping impoverished people in developing countries. The first person-to-person micro-lending website, Kiva aims to connect the first- and third-world by allowing the prosperous to lend to the poor through microfinance institutions. These people – often farmers, small retailers, or carpenters – lack the wealth, credit record or collateral to do business with a "regular" bank, and without the small loans received through Kiva's field partners they would have no way to better their standard of living or amass the capital to improve their business. But in a simple, succinct process Kiva makes it possible for you and me to make a real difference in someone's life.

Potential lenders browse the profiles of entrepreneurs-in-need and read about their family, intentions for the money, and see photos of the person requesting money. It can be an extremely humbling experience. A woman in Cambodia must walk to a market every day to sell the fish her husband catches. She wants a loan to purchase a motorcycle, so she can reduce her travel time and bring more fish to market than what she just carries. A young man in Nigeria, newly married with a child, seeks money to buy more seeds so he can sell more vegetables at the local market. He dreams of sending his child to school, but this won't be affordable if his business doesn't grow.

After a loan has been successfully approved, field partners continue to visit the borrowers and provide journal entries and feedback to Kiva. A loan I made in September 2007 has become one of my favorite stories: Mohamed, a baker in Sierra Leone, worked hard for many years to expand his business. When he started out he had to borrow half a bag of flour (on credit!) from a friend just to make his loaves. When he came to Kiva to ask for a loan, he was renting a bakery and was able to employ several part-time bakers from the local youth, providing employment in an area where jobs are quite rare. He sought a loan so he could buy his own bakery and further expand his business.

Over the next few months I've read several updates. In May 2008 Mohamed had doubled his bread production and hired two more people. His prosperity has also allowed him to sell his bread wholesale to women in other villages, who are able to start small businesses for themselves re-selling the loaves. In July he was visited again, and was proud to share that he now has eight full-time employees and produces 500 loaves each day! What amazes me is not just that his life was improving, but through his business he was able to improve the life of people in the villages around him, too.

To me, Mohamed's story is what Kiva is all about. Thirty lenders around the world banded together, loaning him $25 each. But it was Mohamed's own hard work and ingenuity that allowed his business to succeed. It may have been a charitable act on our part, but Kiva is not about free handouts. All borrowers have to pay back their loans on a monthly basis. There is some risk involved; when Kiva first began their expansion they did have trouble with loaned funds not reaching the intended borrowers. However, they currently claim a 98.52% repayment rate and are working to increase the number of Kiva "auditors" who visit Kiva's field partners in forty-two countries to make sure everything is running smoothly.

I've started a team on Kiva.org for book lovers: http://www.kiva.org/team/readers

I hope everyone will take a few minutes to check it out and join! If you have any questions about Kiva, feel free to e-mail me and I'll be happy to answer.

In addition to the $25 Kiva Gift Certificate being given away at BBAW, feel free to drop by Fashionista Piranha, too, where we are currently giving away another gift certificate as well as several other charity donations!