Tech & Biz

Developing Tech for Developing Biz in Developing Nations

by Jordan Yerman | February 8, 2008 at 12:52 pm

181 views | 10 Recommendations | 2 comments

Kiva isn't really a new company (they started in 2005), but their success is noteworthy. Using a peer-to-peer networking model, microlenders can get in touch with those starting small business, and work out small loans.The repament rate i sin the 90th percentile, and Kiva raises around US$1 million every twelve days.What's next-level about this is that lenders get to choose whom they finance, acting like mini-investment banks- their loans are then actuated bymicrofinance groups local to the recipient of the loan. The next step would be to get lenders in direct contact with those to whom they lend.

Kiva, a peer-to-peer online microlending nonprofit organization, is changing the dynamics of microfinance by linking people who have money to loan up with entrepreneurs in developing countries who need some capital, all over the Internet. What is considered pocket change for many people in the United States can go a long way toward helping a struggling businessman get started in another part of the world.

The nonprofit is basically an "eBay for microfinance," Premal Shah, president of Kiva, said in a talk as part of the PARC Forum at Xerox PARC headquarters in Palo Alto, Calif., on Thursday night.

Since launching in 2005, Kiva has attracted more than $20 million in loans from more than 100,000 people. People choose whom they want to lend to. They can loan from $25 to $150 per entrepreneur, although recent demand to loan has forced the site to cap the loan amounts to allow more people to participate. The site gets money to grow from loan percentages donated to it by individual lenders.

I just "diversified my portfolio" and made a second $25 loan through Kiva. In addition to helping George Bomboko in Uganda with funds for his business, I'm now also helping tortilla maker Melissa Gabriela Diaz Vilorio in Honduras with hers.