In 2005, the international nonprofit Kiva was founded. It is based in San Francisco and their mission is to connect people all over the world through lending money to borrowers to alleviate poverty. Borrowers can apply for money to help start or grow a business, go to school, access clean energy or realize their potential. Everything donated to Kiva is given directly to funding loans, Kiva and the administration are paid for through optional donations and support from grants and sponsors. So far, 1.6 million lenders have lent $949.7 million to 2.2 million borrowers. Kiva has a vision that if a loan from them helps a person or group in one place, it will create opportunities for others as well. A ripple effect could shape the future for families or even entire communities.
One of the main mottos for Kiva, is that the money involved is a loan, and not a donation. Therefore the process of choosing the borrower you wish to partner with is important. The repayment rate is over 97%, but there is always the chance that unpredicted events occur to the country or close relations of the borrower, preventing them from paying back the loans. We were given the task of finding someone we were going to lend money to, and we started with using the Microsoft Office program “Planner”. Here we could insert our tasks, how long it would take, and who would do what. It worked great, and we were quickly set to work and searching for candidates.
In addition to what the borrowers wished to use the money for, we also had to check the loan length, repayment schedule, risk rating, and general country information for where they’re from. Many candidates looked promising, but had long loan lengths or bad risk ratings. Both these we tried to avoid, considering that it would be nice to see if our money helped before we finish school, and we did not want to send our money somewhere where it could easily go to waste.
Our candidate is called Arlene and is from Samar, one of the poorest provinces in Philippines. She moved to Manila, more specifically Malabon City, in hopes of a better future and getting a job. Arlene is married, together Arlene and her husband have two children. Arlene now owns a variety store, and needs the loan from Kiva to fill up the store’s stock. She hopes that her business will grow bigger so that she can provide for her family.
Arlene has already gotten 88% of her request, and only needs 50 more dollars. The loan length is 8 months, and she plans to pay back the debt monthly. Kiva’s webpage informes that currency exchange loss is possible, but we are willing to take the risk. Arlene has 3 stars out of 5 on her risk rating, and with 5 being the best, 3 stars are not too bad.
Philippines is a developing country with a free market economy located in Asia. They have a high unemployment rate and a low gross domestic product, which makes their economy vulnerable. Arlene live in these conditions and that’s why we want to help her. The market economy makes it a good investment. She comes from poverty and we want to help her business so she doesn’t have to go back to living in poverty. Our hope is that our contribution will help Arlene get a more revenues, but also we’re hoping on getting our money back. Philippines have a lot of people working in primary industry and are far behind on the industrial revolution. We hope that Arlene will be able to update her store in the future.
Written by Julie, Sara and Sara