Nelly, a Honduran entreprenuer who received a small business loan from Kiva
Honduran bloggers La Gringa, Matthew, Ruthy, and Jill are blogging for a good cause. Though media attention on world hunger is often focused on Africa, Honduras – a small Central American country with a population of about 7 million – recently achieved the dubious distinction of the country with the highest rate of “chronic hunger” in the Western Hemisphere. Four bloggers based in Honduras and the US have seen this hunger first-hand and want to do something to help.
La Gringa, a former Texan living in La Ceiba, Honduras, writes:
Honduras now rates number one in the category of ‘chronic hunger,’ with almost one quarter of the population falling into that category. Honduras has now surpassed Haiti where the hunger rate is 18 percent.
Searching on the Internet for some way to help, La Gringa discovered the Kiva organization. Kiva makes “micro loans” to small business people in Honduras and 12 other countries. From the Kiva website:
Kiva is a microfinance organization that facilitates the lending of money to poor people in several countries around the world. Microfinance has been in the news recently-Muhammad Yunus, who created the Grameen Bank and the idea of microfinance, was just awarded the Nobel Peace Prize for 2006. Kiva is a Swahili word meaning “agreement” or “unity”.
La Gringa's blog goes on to say:
Kiva is a fabulous program which, rather than giving charity, the organization gives loans to help people start or expand a small business. Kiva accepts loans in $25 increments through Paypal (by credit card or from your Paypal cash balance), and then disburses the funds to people in 13 countries, including Honduras. Most loans have a term of 6 to 12 months. When the loans are repaid, the original lenders are repaid (without interest). Kiva's repayment rate so far has been about 97%.
Imagine the pride people feel when they have repaid their loan, versus the shame of having to accept charity. Imagine also what this process teaches their children about self-sufficiency and honoring one's commitments.
Matthew, a Canadian teacher in Olancho, Honduras, picked up the ball and informed his readers:
So why is this such a fantastic idea? Because it's a loan, not a donation. I'm usually hesitant about donating to charities because I just don't believe handouts solve the problem. But Kiva isn't a charity. You can give as little as $25 to help someone's small business grow. But here's the kicker: you get your money back. You can then keep your money or reinvest it into another small business. Just think how many people the same $25 can help. Talk about bang for your buck!
What I really like about microfinance is that it capitalizes on the abilities of the poor. Most people don't find themselves impoverished for lack of initiative or work ethic. In fact, they are entrepreneurs in every sense of the word. They have to be just to get by. They want to work hard, learn and grow. They don't want to receive handouts any more than you want to give them. Microfinance empowers them, instead of treating them like victims.
Ruthy, a young Honduran-American mother in Missouri, U.S., wrote:
Kiva – is an organization that helps small business in developing worlds – how do they help you might ask… well by great people like you! who donate – sorry let me rephrase – loan money to these small businesses; and I quote ” By choosing a business on Kiva.org, you can “sponsor a business” and help the world's working poor make great strides towards economic independence”
So you choose the business you want to help, you loan them money to help reach their goal (it starts at $25, how great is that) and then you get your money back! That's right you get it back… once you get it back you can choose to get it back or loan it to some other business, it's all up to you!
So imagine all the people you can help by doing this, we may not be able to save the world all at once but we may be able to help impoverished countries help themselves! Helping these small businesses means that you would be helping families of people. I am so excited to have found out about this organization that I just had to say something about it. Oh yes and of course I am on my way to the website to help someone reach their goal.
I am not going to pretend that I am an economics professor, but I like the personal responsibility and empowerment that are found in programs like this. When I think of the ways that I carelessly spend $25, it makes me realize how small a sacrifice it would be to donate to an organization like Kiva.
In a later post on the same subject, La Gringa continues:
It is just mind-boggling how little it takes for these people to improve their businesses and their lives. The profiles, both of applicants and those who have received loans, though not in-depth, are really touching. I have cried reading some of them.
A surprising number of those who have received and paid back their loans wrote that they have added an employee or even two. These are new jobs created sometimes by as little as a $200 investment. Incredible!
Here is what one person wrote that she needed the loan for:
“Loan Use: Buy inventory to increase sales and happiness.”
That says it all, doesn't it? How can you not feel empathy for these poor hardworking people who want to improve their lives and obtain a better education for their children, and not only that, but they then spread the happiness by providing new jobs for others?
To view the ever-changing list of current Central American loan applicants, click here. You can also show your support by hosting a Kiva banner on your blog or website. Other weblogs discussing Kiva include American Idle, Snark Market, and Meathaus.