Microfinancing 2.0: Kiva.org

Last week we pointed to videos that demonstrated Muhammad Yunus’ Nobel Prize winning micro-credit system, now in the NY Times Magazine’s Ideas For 2006 they look at ‘web-based micro-financing’ where sites like Kiva.org help anyone become a microfinancier “with just a few clicks of the mouse.”

At Kiva.org, a schoolteacher in Kansas can partner with an expert seamstress in countries like Kenya, Mexico and Ecuador to jump-start a tailor shop. The founders Matthew Flannery, a Stanford graduate, and his wife, Jessica Flannery, a Stanford M.B.A. candidate, came up with the idea for Kiva, which means “unity” in Swahili, after spending time in East Africa. They noticed that many people there had no access to affordable credit. By contrast, Kiva.org offers loans to handpicked microfinance institutions at zero percent interest. These microfinance institutions, in turn, screen local applicants and lend money to individuals at an average interest rate of about 19 percent, lower than the 35 percent worldwide average for microfinance loans…

Jessica Flannery says that one of the earliest small loans helped a Ugandan fish seller take a bus to the Nile River and buy fish for a fraction of the price she previously paid a distributor. “A $10 bus ticket,” Flannery notes, “separated her from vastly expanding her profit.”

Kiva.org
Web-Based Microfinancing - New York Times

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