To date, more than 840,000 Kiva lenders have lent nearly $370 million in microloans. The organization relies on Field Partners to administer and disburse loans, as well as more than 450 volunteers who edit and translate Kiva stories. Lenders receive periodic updates about their loans, in addition to repayment information when it becomes available. When loans are repaid, lenders can keep the money or choose to reinvest. A testament to the effectiveness of the model, 70% of all lenders choose to make another loan.

About the Author:

Robert Clemens served as Principal of Chino Valley Unified School District from 1993 to 2011. Under Principal Robert Clemens’s direction, the school’s API Score improved from 856 to 926 over a period of seven years. Clemens has been involved with Kiva for a number of years.

“To touch a person’s heart, you must see a person’s face.” (quote from My Name is Asher Lev – Chaim Potok)

Lending on Kiva.org is a very personal experience. Reading a borrower’s profile, understanding a glimpse of their life, and seeing their picture, kindles, in one way or another, a sincere interest in their potential and forms a connection with the uniqueness of that borrower. Beyond the loan, lenders affirm a strong and inherent hope within the borrower and encourage their entrepreneurial spirit. How awesome for global lenders to see a borrower’s face, take a $25 risk to make a loan, and possibly change that borrower’s life.

How does this really play out? Does the borrower get to look through this window, called the Internet, and see their lenders’ faces?

Kiva Fellows have the opportunity to open that window and make the Person-to-Person connection tangible. Allowing not only the borrower’s financial life to be changed, but also possibly their heart. It’s one thing to know a loan is funded by Kiva…but another to know who Kiva is. A person? A group? Or just another organization? Certainly this does not happen with every borrower, but the previous Sierra Leon based Fellow, David McNeill, and I used my computer to show Kiva borrower, Muhammad, the Kiva webpage of his 38 (and counting) global lenders. In his true smile and kind eyes it was clear he recognized the significance of a loan funded by Kiva. He understood his loan was facilitated by the local microfinance institution BRAC and was funded by 38 lenders around the world. Each of those square quirky lender pictures on Kiva.org represented a person or group who believed in Muhammad and encouraged him to actualize his dreams. As he intently read aloud the countries of his lenders, he looked up at me and quietly said, “These people, from everywhere, all funded me?” At that moment we saw the beauty in Kiva. He does plan to some day expand from his roadside stand and open up a grocery store (most likely with another small loan). The Kiva process came full circle; Muhammad had touched lenders’ hearts and in turn his heart was touched. Our “face” is so important in the Kiva process; it represents who we are and what we do…this model may bring people closer than we can imagine.

Let’s quickly get our bearings here about Sierra Leone; 70% of the population live under the international poverty line; the life expectancy at birth is 48 years; and the literacy rate is 35-40%. As I walk home from my MFI (Microfinance Institution) the streets are lined with small businesses: some women carry their business of fruits or shoes or bags of clean water in large baskets balancing atop their head, while others are sell cell phone minutes out of a metal piecemeal “office”. The spirit of small enterprise here is palpable, Sierra Leoneans have a drive to make a sustainable living through small business, however most lack a solid job opportunity or the capital to grow their business. This country profile is like many others and many other organizations offer microfinance, but the notion of touching a person’s heart by seeing their face is quintessential Kiva.

Until about a month ago, I didn’t realize that currency exchange loss protection was important to Kiva Lenders.  That was until Yelena (KF11, Azerbaijan) raised the issue, pointing out a discussion on kivafriends.  Many lenders don’t lend via Field Partners that share currency risk.  Why should Kiva Lenders take on the risk of currency loss when Kiva’s Field Partners can protect against it in other ways?

What is currency risk on Kiva?

Currency risk is embedded in the Kiva system.  Currency risk occurs because many Field Partners disburse loans in local currency.  However, they have to pay Kiva Lenders back in US dollars (USD).  So if the local currency loses value against the US dollar, the Field Partner still has to pay back e.g. 1000 USD even if the client only pays them the equivalent of 900 USD.

To help Field Partners manage this risk, Kiva introduced an option to share the risk with Kiva Lenders.  If the Field Partner selects this option, Kiva Lenders will bear the currency loss if the local currency goes down by over 20% against the USD.  You can see whether currency exchange loss is covered by the Field Partner (“covered”) or not (“possible”) in an entrepreneur’s business description.

Why should Field Partners cover the risk

When I first made a loan on Kiva, currency exchange loss was important to me.  I didn’t want my funds to be eroded over time.  I wanted to lend to Tajikistan, and, luckily, both of Kiva’s active Tajik Field Partners,  HUMO and IMON, assumed the currency risk.

Before coming to Tajikistan, I thought, “Kiva Field Partners charge interest rates, so they should bear the burden.”  I figured interest rates would be designed to cover any costs due to currency losses.

Contractual obligations v breaking even

But covering currency risk through interest rates doesn’t cut it in international finance.  Around 90% of Tajik micro-finance organizations’ debt in 2008 was in foreign currency, often times coming from abroad.  In contracts with foreign organizations, there is usually a cap on the currency risk that the Tajik partner can take on.  To stick to the contract, the Tajik organizations limit the amount of local currency loans they disburse. They disburse both local currency loans and loans denominated in USD.

New rules, and currency issues

However, the Tajik government has recently put pressure on micro-loan organizations to give only local currency loans.  This might mean breaching contracts that limit currency risk exposure.  If the pressure continues, Tajik micro-loan organizations will need to find alternative ways to get and manage funds to disburse to entrepreneurs.

‘Hard currency’ economy

One possible solution is finding funds in local currency.  But getting access to local currency from within Tajikistan can be tricky.  A lot of the money in Tajikistan is in foreign “hard currency.”  People use foreign currency as a store of value because it is more stable. Around 60% of money deposited in banks (many people don’t deposit in banks at all) is in foreign currency.  Also, big commercial banks (that can make loans to Kiva’s Partners) often have less than 50% of their loan portfolio in local currency.

Micro-loan organizations can also look for Tajik money from abroad.  This means finding new international partners that are willing to give out money in the Tajik local currency.  Although some partners are willing to do this, many are not.

Another option is hedging against currency risk.  Hedging, which usually involves paying some form of ‘fee’ to get rid of risk, is also not easy.  Micro-loan organizations and banks alike say there are no adapted hedging products here.  Although many organizations do have a few hedges, they are not enough, expensive, and short term.  You may think you are going to get a hedge, or renew it.  Then, at the last minute, the other party to the deal turns and says, “Sorry, we don’t have the resources.  We’ll let you know when we do.”

Everyone should share the risk … including Kiva Lenders?

With these challenges, one option proposed is for foreign partners to share the currency risk with Tajik micro-loan organizations.*  Kiva offers its Field Partners this type of option through the currency exchange loss feature.  With new government pressure, using Kiva’s currency risk protection seems like a reasonable solution.

However, it’s not something I would do if I was a Tajik Field Partner.  Tajik loans on Kiva usually raise slowly.  For many lenders, they are not as attractive as loans from other regions.  Kiva Partners here worry about how many loans to post per month, in case they expire.

In light of the discussion on kivafriends.org, sharing the currency risk might make these loans even less attractive.  It might solve one problem to create another.

What do you think?

If you would like to support entrepreneurs in Tajikistan, you can lend, join the team Supporters of Tajikistan, or learn more about Tajikistan from Kiva Fellow blog posts

* To be clear, this was not proposed by a micro-loan organization

My portfolio distribution

How do you decide what business to lend to on Kiva? And do you know what your biases are?

Besides being a Kiva Fellow, I am also an active lender on Kiva. Since I started lending in 2007, I’ve always had a few criteria that I’ve been aware of. I mainly lend to women with kids. They get an extra point in my mind if helping with the children’s education is mentioned as a priority.

But last month when I looked at the breakdown of my loans, I was surprised to see some other biases appear. I tend to loan in the Agriculture and Food sectors. A heavy majority of my loans are in Latin America.

Looking at my portfolio distribution provided food for thought. Without really thinking about it I made almost 50% of my loans are in Latin America. I’m guessing this bias happened because I speak Spanish and am currently working as a Kiva Fellow in Latin America. I think my bias towards the Agriculture and Food Sectors is a result of growing up on a farm.

Regardless of what caused my biases, when I received my “Your Kiva Credit is now available for use” email last month, I felt like I was much more deliberate about who I lent to. So I encourage you all to take a look at your portfolio. Do you have some hidden biases or does your portfolio reflect your lending priorities? To see your portfolio distribution, go to your lender profile and scroll down to the very bottom.

Looking at my portfolio with this in mind has me redistributing to other sectors and regions little by little. My experience as a Kiva Fellow has me leaning more towards housing loans. Though housing loans often sound like frivolous remodels in the client profile, I’ve learned that the addition of a small wall or patio can often make a huge difference in a family’s quality of life.  I also think I’ll make another loan to Eastern Europe with my next credit since I’ve learned that these loans generally fund slower (for no apparent good reason). I would love to hear what you might change about your lending priorities after looking at your portfolio distribution.

Meg Gray is currently a Kiva Fellow with Fundación Mujer in Costa Rica. Make a loan to an entrepreneur on Kiva.org today. Or join Fundación Mujer’s Lending Team to get more updates from the Field.

Having read Meg’s excellent blog post “Bad Roads, Interest Rates, and MFI Sustainability” and the ensuing comments from Kiva lenders, I admit that I was rather baffled. Particularly by comments that varied upon the theme of: “In the U.S. you can get loans for ~8%! You can get credit for 18% interest, which we find high and oppressive! So how can MFIs charge 36% interest rates on loans to their poor clients, it is usurious, it can’t be justified…” so on and so forth.

I believe that if you were to plunk a U.S. bank into a developing country with limited infrastructure, where most clients don’t have ready access to the internet that lets them transfer money from one bank account to another with the click of a mouse, where you have to ask employees to constantly risk their personal safety by carrying huge amounts of cash over uncertain roads and territories, those banks would not be charging 8% interest or even 18% interest, but a much, much higher rate.

Still not convinced? Let’s try a quick breakdown of some actual numbers -

HSPFI, my host MFI and Kiva field partner, charges 3% interest a month on loans. So for a first-time borrower with a loan of P5,000 to be repaid over 5 months, in one month the HSPFI borrower would be paying back P1,000 on the capital, and P150 in interest. (The current exchange rate is 46 Philippine pesos to 1 U.S. dollar, so the USD equivalent is $21.74 in capital, and $3.26 in interest.)

The P150 interest collected on that loan covers salaries and benefits of not just the project or loan officers who collect the client repayments on a weekly basis, but also the salaries of admin staff members like the branch cashier, accountant and assistant accountant, as well as the branch manager. Let’s say our first time borrower lives in Camiguin. For HSPFI’s Camiguin Branch (which is HSPFI’s smallest but one of its most efficient branches), total salaries and benefits for their five staff members (three project officers, one admin staff, and one officer-in-charge/branch manager) in January 2010 came to roughly P27,500 (or $598 USD).

Apart from the salaries and wages of the branch staff, the P150 interest will also go towards salaries and benefits of the Head Office staff – HSPFI’s Executive Director, Director of Operations, HR staff, tech staff, community development staff, internal auditors, Kiva Coordinator(!), etc. – as well as Head Office’s administrative costs (for printing, office supplies, utilities, trainings and conferences…). Unlike the branches, HSPFI’s Head Office does not give out loans or collect interest from clients, so the branch offices make monthly contributions to help cover Head Office’s costs. HSPFI Camiguin Branch contributed P53,400 (or $1,161 USD) in management fees to Head Office this past month.

Still with me? Remember that our first time borrower is paying P150, or $3.26 USD in monthly interest on his or her loan of P5,000. But salaries and wages are hardly the only things that a functioning MFI has to pay for. Camiguin project officers spent about P4,500 (or $98 USD) on travel this past month. And to round out the estimated operational costs, total administrative expenses for necessities like utilities, phone, office supplies, rent, taxes/licenses, etc. for the branch came to about P26,150 (or $568 USD).

Note that this is PARTIAL operating costs for HSPFI Camiguin. Kiva is not HSPFI’s only (or biggest) funder by any means, and other funders (e.g. Oikocredit, SEAD, PCFC, SBGFC) actually do charge interest on loans to HSPFI. I left that line item out of the above calculations for the sake of argument that Kiva’s funds are interest-free, but if I were to add that line item in Camiguin’s operational costs would increase by about P49,800 (or $1,082 USD).

By now you’re probably tired of me repeating that our first-time HSPFI borrower is paying P150, or $3.26 USD in interest this month on his or her loan of P5,000 – 0.13% of operational costs. Surely you have to account for repeat borrowers who have taken out higher loans and are correspondingly paying higher interest fees. So if we increase the loan amount to P30,000, our now long-time, repeat HSPFI borrower would be paying P3,000 on the loan capital and P900 (or $19.57) on interest this month – 0.8% of operational costs. This P900 definitely goes farther towards contributing towards operational costs, but note that borrowers with P30,000+ loans only make up about 10% of HSPFI’s total portfolio.

The above is very condensed and much abridged, to keep this post from being three times as long. But by listing out all these figures, I wanted to show that running an MFI is not cheap. It’s easy for us to condemn 3% monthly interest rates are high, but it’s just as easy for us to forget that staff, utilities, rent and a whole range of other operational expenses need to be paid in order for an organization – any organization – to run.

Also, working conditions for MFIs in developing countries are very different from banks in developed countries. This may seem like huge duh point, but it bears pointing out that MFIs’ operational costs are high in part because you need enough project officers to visit hundreds of clients every week and collect cash repayments, and you need enough admin/other staff to support the project officers. U.S. banks don’t need employees to visit every one of their clients on a weekly basis to collect repayments. Furthermore, banks in the U.S. have access the excellent technology/infrastructure in place that allows for automated payments (and greater automation in general) – which helps keep interest rates low. To say that MFIs in developing countries have “high” interest rates in comparison to banks in developed countries with “low” interest rates ignores the fact that banks in developed countries have certain operational advantages that MFIs in developing countries don’t have, and need to compensate for.

At this point maybe some of you are thinking, “I don’t really care about MFIs needing to cover operational costs, I only care about how this 3% monthly interest affects Kiva borrowers!” Leaving aside the fact that there would be no Kiva borrowers without field partner MFIs, I had previously met a Kiva borrower who decided to stop borrowing from HSPFI, and I know she’s not the only person to have ever done so. The interest rate might have been a factor behind her decision to stop borrowing, although there might’ve been other personal factors as well.

But on the other side of the spectrum there are Kiva borrowers like Ms. Mellianita Moron. Since this topic of “high” interest rates had been weighing on my mind, I brought it up during her interview. I explained that businesses in the U.S. can get loans at much lower interest rates, so there are Kiva lenders who are worried that MFIs like HSPFI are charging overly high interest rates to borrowers in the Philippines. I asked what she thought about HSPFI’s interest rate – was it indeed too high?

HSPFI’s 3% monthly interest rate is ok! Mellianita exclaimed. Especially in comparison to other MFIs who she had borrowed from that charged 10% interest a month! And to top it all off the other MFI collects repayments on a DAILY basis, in comparison to HSPFI which collects repayments on a weekly basis. When I then asked if there are any additional services that she would like to see from HSPFI, Mellianita laughed and said that she wished HSPFI could increase loan amounts and release more loans at a faster rate, so she won’t have to borrow from MFIs that charge truly exorbitant interest rates and can just borrow from HSPFI. I looked around at the various center members and extended family who had gathered outside Mellianita’s sari-sari store to watch (and occasionally interject), as they all nodded their heads in agreement.

Eva Wu would like to thank HSPFI for generously allowing her to use figures from their latest financial statement in this blog post. She has lots of thoughts on the (unsexy) topic of MFI interest rates, but hopes for now that people can understand that asking why MFIs in developing countries can’t offer interest rates as low as banks in developed countries is a bit like asking why apples can’t be oranges. Or to use a more Filipino analogy, why lanzones can’t be rambotan.

Every time I come back from the field, I’m weighed down by videos, photos, barely legible notebook scribbles. Stories from Kiva borrowers, the good and the bad. As I turn these stories into journals I try to imagine what it would be like to be a Kiva lender on the other side, receiving an update on the Kiva borrower that they chose to fund. There’s a lot of joy in sharing the good, the success stories, a cause for celebration. Why we’re proud to be lending through Kiva. But what about the bad, stories of something gone awry? How does it feel, as a lender, to receive those updates?

What do Kiva lenders expect to hear from Kiva borrowers?

This question has been in the back of my mind for a while now. Particularly since, as lenders we browse through borrower profiles on Kiva and feel a degree of certainty. I’ve decided to lend to the fish vendor or the sari-sari variety store owner in the Philippines. But since I’ve started my fellowship, I’ve found that this certainty doesn’t always hold. In the months since the loan was disbursed, the borrower might have switched businesses or used the loan for other purposes. This could happen for a multitude of reasons. The seasonal nature of certain businesses may mean that, during certain times of the year it’s no longer possible to support one’s family just by peddling fish. So the fish vendor turns into a sari-sari store owner. Other times, the borrower might still be selling fish, but a family member has fallen ill and so the loan funds had to be diverted towards medical bills.

Near the beginning of my fellowship, I remember holding off on posting these “hard” journal updates until after I’ve finished the “easy” ones – where the borrowers’ stories still matched their profiles on Kiva, where borrowers used the loans on their business, where borrowers said that receiving this loan was really helpful to their businesses and family. But as time went on, I came to accept that the difficult stories reflect hardships and choices that Kiva borrowers face on a daily basis. Life is not easy. Neither are these stories. But that is the challenge for Kiva Fellows, to paint the complex human landscape behind microfinance and shine light on these issues with honesty and respect.

Sometimes though, I turn up stories that leave me completely staggered.

Here are two such stories from a recent field visit which prompted this bout of introspection:

We visit a Kiva borrower who starts crying and cannot stop. Later that evening, her HSPFI project officer told us that this borrower’s husband is having an affair with another woman. The borrower had four children with her husband; the other woman is now pregnant. Microfinance can be very personal, but this goes beyond the pale of what I thought project or loan officers at MFIs would have to deal with. My Western mindset breaks down; the solution that I naturally and quickly jump to (divorce!) is a non-option here in the Philippines. The HSPFI project officer is kind, compassionate, and has clearly gained the borrower’s trust. I know that the project officer will continue to encourage and be there for this Kiva borrower. But what’s the right thing to do? I don’t know. I don’t know how this story will end.

I met another Kiva borrower who peddles vegetables. Cradling her baby, she sets down on the wooden bench a handful of okra, a small bunch of kangkong. Something in her eyes, her face prompts me to ask if she’ll be taking out another loan. I’ve never asked this question before. I’ve heard many borrowers declare that they are good payers and that they would like to get bigger loans from HSPFI – sometimes prompted by the fact that I’m visiting them on behalf of Kiva, a foreign funder. I’d smile, mentally acknowledging the nature of business transactions, thank them for their time. This Kiva borrower shook her head, looked down. When asked why, she said simply, “Kapoy.” Tired. Weariness hangs over her like a persistent veil. I catch a glimpse of the limp kangkong leaves, brown edges crinkled.

The project officer added that this Kiva borrower will still keep her HSPFI savings account. I hope she finds it useful – a helpful benefit from a thoughtful MFI. But again, another story with an unknown ending. I wish I knew.

These are the stories that are hard to share. Maybe they’re equally hard to hear. What we hope to learn is not always what we actually learn. I’m uncovering more and more questions that don’t have straightforward answers, but I’m continuously humbled by the almost brutal honesty of both HSPFI staff and borrowers. The harshness that dogs transparency. A different face of the truth from the ground.

What would Kiva lenders hope to hear from these Kiva borrowers?

Celebrate transparency in all its facets by lending to a HSPFI borrower through Kiva.

Yesterday I took a trip to a CCT Kiva branch located in Caloocan, about 2 hours north of the head office in Manila. CCT offices often have inspirational posters and signs, but I thought this one was very relevant to Kiva.

Kiva lenders have good character: “They lend money to those in need without interest.”

Here are links to updates on some of the borrowers in Caloocan that have benefited from Kiva loans:

Teresa Barola: video game arcade owner

Genie Tabarangao: sari-sari (general) store owner

Gloria Espayos: news and spice stand operator

Prem Thomas is serving as a Kiva Fellow working with the new field partner Center for Community Transformation Credit Cooperative (CCT) in Manila, Philippines.

To view currently fundraising loans from CCT click here.

You can also join our new lending team here.

Wordreference translates the Spanish word socio as member or partner.

Yesterday, on my first day as a Kiva Fellow at Asociación Arariwa, I got to see my first group loan disbursement.  Raquel (the Kiva coordinator at Arariwa) described the borrowers as Nuestros Socios (our members).  In a group loan at Arariwa, the borrowers are Socios del banco.  A lender who joins the Kiva community can also be called a Socio de Kiva.  I translate Kiva’s partner MFIs as Socios de Kiva (Kiva partners) and I describe myself as Socio de Kiva (Kiva Fellow).   And one more: here’s a past blog post by another Kiva Fellow, Michelle, about Socios Dinámicos.

Of course we all have other names -

• Institución de Microfinanzas – Microfinance Institution: Asociación Arariwa

Institución de Microfinanzas - Microfinance Institution: Asociación Arariwa

• Prestamista – Lender: Kiva Lending Team Amigos de Asociación Arariwa

Prestamista - Lender: Kiva Lending Team Amigos de Asociación Arariwa

• Prestatario – borrower: Ayda from Asociación Arariwa, Cusco, Peru

Prestatario - borrower: Ayda from Asociación Arariwa, Cusco, Peru

• Voluntario – Volunteer: “Lethal” Sheethal Shobowale, Kiva Fellow, KF9, Peru

Voluntario - Volunteer: "Lethal" Sheethal Shobowale, Kiva Fellow, KF9, Peru

but I really like the idea that we are all socios (partners or members) of Kiva, of microfinance and in alleviating poverty.  And going back to Kiva’s mission, Connecting People through Lending to Alleviate Poverty, being connected as socios seems to make sense to me.

Please consider becoming a Socio of Asociación Arariwa by lending to Arariwa borrowers and joining our Kiva lending team – Amigos/Amigas de Arariwa!

Sheethal Shobowale is currently serving as a Kiva Fellow with Asociación Arariwa in Cusco, Peru.

Most days I struggle with what I see.

The academic in me would explain the concept of economic dualism as the coexistence of modern and traditional sectors within a single economy, especially as found in less-developed countries. Modern and traditional are perhaps polite terms for rich and poor (that’s not the academic in me, that’s the cynic). The division between rich and poor, or modern and traditional, is as great here as I’ve seen in Latin America. Statistics may say otherwise but I see a great discrepancy.

During my Kiva Fellows Program I am living in a middle class neighbourhood in Lima called Jesus Maria. There are much nicer and safer neighbourhoods nearby where most of the other foreigners live but I chose this one as it’s close to EDAPROSPO’s main office. This wasn’t the Peru I was expecting.

I have a McDonald’s at one of the street and a Papa John’s Pizza at the other. There are no less than 6 Chinese food restaurants, 2 major grocery stores, 2 private medical clinics, a theater, and plenty of other amenities within walking distance.  On my way to work I see BMWs, Audis, and Mercedes Benzes in the parking lots of the adjacent buildings.

Friends came through Lima the other week (omitting names and genders to protect the ‘guilty’). Overnight buses arrive bright and early in the morning. After a few months in rural Peru, I took them to sample some of Lima’s more Western options. We hit McDonald’s for breakfast and then walked past the Burger King, made a right turn at the KFC/Pizza Hut and headed to Starbucks for a grande americano and a grande caramel frappuccino. Unfortunately it doesn’t end there. We could have gone to Hooter’s for wings (but maybe not for breakfast), TGIFriday’s, Chili’s, or Tony Roma’s The Place for Ribs. I haven’t been to any of these places yet but I did go to McDonald’s once after a really hard day. There’s just something about those fries!

This was not the real Peru or the real Lima. Maybe I shouldn’t say that, it is most definitely real and reality for some, it just doesn’t feel right after seeing other parts of the city and how the people there live.

When I cramp myself into one of the local buses to take me on the hour plus ride out to visit Kiva Borrowers in the ever growing outskirts of Lima, I enter a different world. This ride cost me 2 Nuevo Soles (a Quarter Pounder with Cheese combo costs about 14 Nuevo Soles – Seven times the cost of the hour bus ride!). This Lima is dirty, dangerous, and struggling to make a better life for itself in the face of those who already have it.  There are no more Western chain restaurants or fancy cars here. An hour earlier when I could have safely taken out my laptop to take advantage of the free WiFi at Starbucks, I am now a target. I’m not a target because I’m foreign, everyone is a target.  The Peruvian loan officer I was with was assaulted the other day, just seconds after she insisted on putting me in my bus home first before searching for her bus. She was left with nothing. One of the nearby street vendors, who struggle to make enough for a living, gave her the 1 Nuevo Soles she needed so she could get home (How guilty did I feel the next day when I found out what happened??). This is the Lima where people are working hard to make a better life for themselves and their families. Not the thief in this story but the street vendor. Most people are struggling to get by here. This is the Lima where microfinance and Kiva can make a difference and we work every day.

I struggle to reconcile these two places. Politically it’s all one city but in reality it is many more. I know the same is true in cities all around the world.

How can Kiva and Kiva Lenders make a difference? Obviously through making loans and supporting microfinance. But, I think there’s more. There’s a local opportunity.

One of the things I love about Kiva is the international aspect of it and how Kiva Lenders from all over the world (182 countries according to the latest Facts & Statistics page) come together to support the working poor in countries far away, countries and people they may never visit.

In a recent post on the Kiva Blog, Kiva Intern Jonny Price posted a presentation detailing the number of Kiva Lenders from each country. What I would love to see even more is greater involvement from those members of this and other developing countries’ wealthier population on Kiva. I know there is a substantial population that can afford it, to lend in $25 increments, I’ve seen how they live. Those restaurants I mentioned are filled every day. I’m talking about the wealthy upper and middle class and expat communities that exist in most of the developing world countries. As a Kiva Fellow and as a foreigner in general on all my travels I’ve always had opportunities to meet and interact with this segment of the population.

I was dismayed a number of times when I spoke with some of these people and they told me, albeit embarrassed by the fact, that that they had never been to the areas where Kiva Borrowers live and work. I had been to more areas of their city than they had. These people had lived here their entire lives and had no idea what was going on in their own city. No, that’s not quite right, they knew what was going on but had never thought about seeing it firsthand or getting involved other than making a charitable donation.  They expressed remorse and wished they could get involved without putting themselves at risk. That’s what Kiva can let them do! It isn’t a perfect solution as I would like to see them even more involved in their local community but it’s a start.  My guess is that this story isn’t limited to just Lima, Peru.

Peru has only 42 lenders (and I commend those 42!!) but there are many more that could get involved if they wanted or were aware. I want to see more Peruvians lending to Peruvians, Kenyans lending to Kenyans, Indonesians to Indonesians, etc…

How do we make this happen?  Suggestions welcome.

Rob Mittelman is a member of KF8 and will be working with EDAPROSPO in Lima, Peru for 10 weeks. To check out currently fundraising loans from EDAPROSPO on Kiva, click here.

by Rob Mittelman, KF8, Peru

When I visit Kiva Borrowers, I bring along a colour printout of their Kiva Profile for them to keep. For many of them it’s a real thrill. They knew their information was on the internet but had never seen their page, their picture, or read their own story before (our stories appear in the original Spanish underneath the English translation). It usually gets passed around and shown to all present. There are always lots of giggles and some embarrassment as I tell them people in the US know about their little restaurant, people in Spain know about their market stall, or how someone from Norway is familiar with their handicrafts. Most take very good care of the printout while I’m around. I don’t know where it ends up but I’ve yet to see it folded up, stuffed in a pocket, or left behind.

One of the most exciting parts for them is seeing their Kiva Lenders and where they come from. For most the people reading this blog, that’s you! They want to know who these strangers are who helped fund their loan. Many of them have had trouble securing loans from loan officers and people they know and who know them. So, to get a loan from someone they have never met is unheard of. I’ve seen their faces as they scan the list and pictures of their Kiva Lenders and they are as excited as you and I are when, as Kiva Lenders, we scroll the Lend tab on Kiva.org choosing our next Kiva Borrower to support.

One of the most popular messages the Kiva Borrowers I interview have for their Kiva Lenders apart from thanking them is to let them know that they won’t let you down. You believe in them and they appreciate that more than I can express. They feel connected to you. Without ever having heard Kiva’s mission statement, they feel that they really are connecting to people through lending.

You, Mr/Ms Kiva Lender, inspire them as much as they inspire you.

Hard to believe but true.

Yesterday, I was asked a difficult question. A Kiva Borrower from Lima, asked me if she received her loan from a dog and a ghost. “A dog and a ghost?” I said, “No, of course not”. Then I looked at her profile. Her only two Kiva Lenders (it was a small loan) were pictures of someone’s pet dog and someone listed as anonymous with the default silhouette.

I explained that the dog was the Kiva Lender’s beloved pet (Kiva is easy to use and all but I don’t think we’re at the point when animals are signing up themselves) and that some people don’t want to have their picture and name online. I assured her that there were, in fact, real people funding her loan. She knew that, of course, but wanted to thank the people behind her loan and know who they were. Just as they know who she is. These two Kiva Lenders will receive the journal update about her progress with her beauty products business along with her thanks but she still doesn’t know who her mysterious supporters are. She wants to know them as much as they want to know her.

These two Kiva Lenders shouldn’t be singled out and I apologize for doing so. I actually removed the name Kiva Borrower from an earlier draft to protect her Kiva Lenders because it’s a story that could be applied to many. They aren’t alone out there. There are many Kiva Lenders who post pictures of pets, avatars, scenery, or nothing at all. They are, undeniably, well within their Kiva rights to do so. However, I ask these Kiva Lenders to think about the Kiva Borrower and that they want to connect with you as much as you do with them. It’s hard to connect with a default silhouette or the picture of a pet.

Be proud of lending on Kiva! Show the Kiva Borrowers who you are!

Rob Mittelman is a member of KF8 and will be working with Edaprospo in Lima, Peru for 10 weeks. Make a loan to one of Edaprospo’s clients on Kiva by following this link.

I have to say that I was moved by the enthusiasm I saw among even a small group of lenders. There were many questions and ideas which were discussed openly and creatively. There was a particular interest in doing more to promote Kiva in Denmark. As a first physical meeting of Kiva lenders in Denmark, participants last night agreed that more regular meetings should be arranged. A second meeting is already scheduled for March 24. The group has a facebook page and of course a page on Kiva.

I left the meeting last night fired up anew with the Kiva spirit. To see lenders interact with Kiva helped me find a still deeper enthusiasm for what Kiva is doing and am still more excited about being part of that. Kiva lenders came and were largely interested in knowing what more they could do for Kiva.

The enthusiasm and engagement of the lenders I met last night makes me positive that in no time we will see more activity  in the coming months from Kiva lenders in the area and Denmark in general. Among the ideas discussed for future activity for the group include:

1. Getting businesses and employee groups involved in Kiva lending through collective funds
2. Arranging press events for Kiva lenders to discuss Kiva and spread the word in Denmark
3. Arranging community events to spread the word
4. Fund raising activity to raise funds for group activities/projects
5. Promote the Kiva Fellows Program in Denmark, to see more Danes as fellows

By far the most interesting idea discussed in my view was proposing to Kiva the possibility of arranging a KFP training event in Europe, possibly in Copenhagen. The idea with this is to make it more accessible to Europeans. Members could fund raise for the initiative and help with other arrangements including finding an appropriate venue etc. Another idea in the same vain would be to create a Kiva fellows fund to support Danes who might want to become fellows to help them in covering the expenses during their fellowship.

Whatever ends up happening, I think Team Denmark is off to an exciting start in the physical space.