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KIVA_Crowdrise
1. What is KIVA’s main goal?

Shah: Kiva is a nonprofit whose mission is to connect people through lending to alleviate poverty.

Kiva is the world’s first and largest crowdfunding platform for social good. Visitors to Kiva.org can browse through the photos and profiles of people all over the world seeking a loan and choose those that they want to support with a loan of $25 or more.

Kiva’s community of one million lenders crowdfund more than $2.5 million in loans per week. These small dollar loans have helped more than one million low-income borrowers start and grow businesses, go to school, improve their homes, buy clean energy products, and more.

Kiva leverages the power of collective good and new technologies to push the boundaries of economic opportunity in unique ways. With the philosophy of empowering people around the world, Kiva is providing safe, affordable access to capital. Since its founding in 2005, Kiva lenders have loaned over $480 million in 72 different countries.

2. Tell me your most inspiring success story. Which of your clients really stands out from the others?

In one moment, Yenku Sesay’s life was changed forever with the swift, savage cut of a knife.

On May 6, 1998 Yenku had the misfortune of being home when soldiers from the rebel army, Revolutionary United Front, invaded his village in northern Sierra Leone to cut off the hands of people who voting for the country’s current leader. Yenku pleaded with the rebels not to cut off his hands. But the rebels took a certain enjoyment from the process. Each prisoner was pushed forward for his or her punishment and had to choose slips of paper in a gruesome lottery. The paper either said “short sleeve” or “long sleeve.” Yenku pulled two long sleeves. His hands were severed with a machete, first the left, then the right. Many of the victims did not survive.

Yenku would likely have soon died if his father had not taken decisive action. Yenku’s father used the family savings to hire a motorbike to take Yenku for treatment in a hospital hours away in the country’s capital city, Freetown. It took 3 days to find a motorbike they could use, and for these three days Yenku waited without any medial treatment. During that time, Yenku was just hoping to die.

Due to the treatment he received at a hospital in the nearest city, Yenku eventually recovered from the physical wounds. In other ways, however, his life was destroyed. He was incapable of taking care of himself and eventually resorted to begging in the streets of Sierra Leone. He was just 21 years old.

Yenku would still be begging today, had he not been approached by Salone Microfinance Trust (SMT), in 2006, about taking out a group loan with four other local borrowers to help them learn a trade and start a business. No other institutions were even willing to consider Yenku for credit because of his amputee status. However, through lengthy discussions with Yenku, SMT saw in Yenku natural business skills and a drive to be self-reliant.

Yenku used this money to develop a modest retail business. At first the business was no more than Yenku selling small items in the street, such as packaged biscuits, soaps, and other sundries. Over the past two years, by reinvesting the profits and building his credit with SMT, Yenku’s business has grown to become a small shop selling an assortment of clothing, shoes, drinks, and other packaged food products.

Yenku dedicated himself to his business, and every month he made his repayments on time and often early. With the profits from his retail business, Yenku has recently expanded into livestock and agriculture. The result is that Yenku is now self-reliant.

Today Yenku is married and has become a provider. He can feed and clothe his three children. He sends both of his school-age children to primary school, and he even pays for his younger brother’s education.

Thirty-three people from six different countries helped to crowdfund loans to Yenku by chipping in $25 through Kiva.org to support his business. Yenku has paid each and every one of them back.

3. How does KIVA make an impact in terms of poverty?

Kiva is striving to bring access to crowdfunded capital into the hands of the working poor around the world. In addition, we are increasingly seeking ways to crowdfund new types of loan products for the working poor to help increase access to clean/green energy, education, and more.

4. What do you think is the most important factor for KIVA’s success?

Designed to be user-friendly, Kiva enables anyone with an internet connection and $25 to engage in our microlending movement. This incredibly low bar for participation has helped Kiva become a pioneer in the crowd funding space and brought microlending into the mainstream.

People are by nature generous, and will help others if given the opportunity to do so in a transparent, accountable way.

Kiva was born from the knowledge that individuals are capable of lifting themselves out of poverty if given access to financial services – all they need is access to just a little capital, and Kiva loans provide just that.

By connecting people we can create relationships beyond financial transactions, and build a global community expressing support and encouragement of one another.

These core values continue to drive Kiva’s evolution and have resulted in more than 1 million lenders reaching out around the world to lend their support to more than 1 million people working to lift themselves and their families out of poverty. Proof of a compelling mission and a sustainable model.

5. What do you feel sets KIVA apart from other organizations?

Microfinance has immense potential for improving the lives of the poor. In the last 40 years, it has reached nearly 200 million people. But — while the existing system strives to reach everyone — traditional microfinance still leaves a huge number of people out:

·       Subsistence farmers enduring uncertain seasons and harvests.

·       Students who make the grades but can’t afford college.

·       Extremely rural families with little opportunity.

·       Millions more who have the potential to change their lives with the right loan products.

Traditional banks and microfinance institutions are often unable or reluctant to offer flexible loan products to meet these people’s needs – mostly due to high costs and risk.

Enter KIVA. With more than one million lenders worldwide who don’t think like banks, Kiva is a powerful source of flexible, risk-tolerant capital. More and more, we’re directing this capital to social enterprises, NGOs, and microfinance institutions that are going beyond classic microfinance to take on issues like education, clean energy, agriculture and others that are central to poverty alleviation and economic opportunity.

Through Kiva’s lenders, we provide crowd-sourced capital to relieve the cost constraints on new ideas. And together with this new breed of Kiva partners, we’re testing and developing new financial products for borrowers worldwide.

Our approach is to see what works and share the results with a global audience. Ultimately, our hope is to get high-impact products to people who have been too long overlooked, and demonstrate their success to the global market.

– Samantha Davis

Sources: KIVA, BizDayTech
Photo: Imagur

Low_Income_Indian_Families_world_bank
A $100 million credit agreement, signed by the World Bank and the Indian Government, will help low-income Indian families access a loan to purchase, build, or upgrade their dwellings.

The National Housing Bank (NHB) will implement the Low Income housing Finance Project, which will support the government’s agenda for financial inclusion on two counts. First, it will enable low-income households in urban areas to access housing finance, and second will strengthen the capacity of financial institutions that target these groups.

India faces a crippling housing shortage; as its urban population continues to rapidly expand, the urban housing shortage is estimated to be 19 million (as of 2012). Low-income families bear the brunt of the problem; they are faced with an estimated 90% of the shortage.

The housing sector is vulnerable to challenges because current land use policies and building norms restrict the availability of housing. Since the majority of the low-income population works in the informal sector, they lack documentation of income and therefore require customized lending products; as a result, developers are reluctant to enter the low-income market due to the perceived risks associated with these buyers.

As the Indian government strives to achieve financial inclusion for the whole population, the project will let the NHB innovate and provide financial solutions for improving low-income access to housing.

R.V. Verma, chairman and managing director of National Housing Bank said, “The program, which will explore sustainable housing finance models for low income households, has been conceived imaginatively and is consistent with the vision and charter of the NHB.”

Michael Haney, operations advisor at the World Bank, explained how the influx of 10 million Indians to towns and cities each year run into trouble finding loans to build or buy themselves houses. “They are forced to use unregulated, informal sources of finance at much higher rates of interest,” he explained.

The new initiative will help families move from informal sources of finance to longer-term, official sources for their housing needs; risk management, market infrastructure and new products will be implemented in order to achieve this goal.

Initially, the project will launch pilot programs to test the sustainability of these lending guidelines and products, and the long-term goal will be to preserve affordability for low-income families by finding alternative forms of collateral to reduce credit risk and keep interest rates at manageable levels.

– Chloe Isacke

Sources: World Bank, Economic Times
Photo: Kootation