Posted on Friday, 19th February 2010 by chris wignall
Kiva.org is one of the best innovations in poverty work I can remember. Taking the impact of microfinance and tying it to the power of the internet for awareness and individual engagement is nothing short of brilliant.
Unfortunately, along with the massive exposure have come several misconceptions about how Kiva actually works.
On the Social Edge blog a guest post from Kiva fellow Nick Lewis addresses one of the most common errors. In part he writes:
I thought this was worth commentary. Kiva has made significant contributions to the world of microfinance, not the least of which being increased public awareness. Kiva, and the exposure it generates, is what led that caller to even consider microfinance as a development option in the first place–a fantastic turn of events. As Kiva continues to grow and gain increased exposure, however, it’s important to remember that it is only one piece of the puzzle; only one player in a very large game. There are countless organizations utilizing myriad different organizational models and while I’m personally a huge fan of the peer-to-peer connection available through Kiva, there are many innovative organizations out there struggling alongside Kiva to end world poverty.
Kiva does not in fact make loans to poor people. Kiva gathers funds through the internet and distributes them to actual microfinance organizations around the world who have met their qualifying criteria. This information is easily available on the Kiva website but seems to be frequently overlooked.
I appreciate the efforts being made to increase understanding for the many people who invest in others through Kiva, and the humility Nick demonstrates in acknowledging that Kiva stands on the shoulders of many predecessors and alongside many alternatives. He also urges readers to become further educated on how microfinance has developed and how it is happening in many distinct models globally.
I would encourage interested people to read Billion Bootstraps and the even more recent The Poor Will Be Glad.
Catalyst is an enthusiastic partner of Opportunity International and the funder of the innovative MicroMAX initiative.
Posted in Catalyst, Great Stories, Partners, Philanthropy | Comments (2)
February 21st, 2010 at 1:25 am
I have heard that Kiva channels its internet-raised funds to Opportunity Intl clients among others, and is proud to partner with OI.
February 21st, 2010 at 9:49 am
This is true, thanks Mark. Opportunity’s many international partners include several Kiva-supported organizations.
It actually adds another interesting loop because funds donated to Opportunity Canada aren’t loaned out by Opportunity Canada but by partners in other countries like Opportunity Colombia.
None of this diminishes the power of microfinance in the slightest, but it is good for donors to understand how it all works. An excellent and simple summary video is available from our friends at Macro for Micro (http://www.macroformicro.com/microfinance); a small group of ambitious young Canadians who are riding bikes across Australia to raise funds and awareness for microfinance. Check them out and be sure to sign up for their weekly updates.