Posted by Clinton School student JOSE GUZZARDI – Microcredit is a popular concept in the area of international development, especially since Muhammad Yunus, who recently visited with Clinton School students, received a Nobel Peace Prize for his work with the Grameen Bank to provide loans to poor people based on trust rather than collateral. One of the major challenges to this idea, however, was that not enough banks were willing to take the risks necessary to help millions of entrepreneurs seeking small help to lift themselves out of poverty.
Now we have the chance to completely change this reality! Kiva.org is a Web site that has destroyed the monopoly over microcredit that governments and financial institutions had in the past. It enables individuals like you and me to make loans to unique small businesses in developing countries–and it can be done with as little as $25.
Anyone can sign up to Kiva and choose to “sponsor a business.” You can search for people by gender, sector or geographic location. Once you locate an idea that you feel confident about and would like to help, you can lend your money with just a few clicks.
I just made my first microloan through Kiva to a small business in the Dominican Republic. Llama de Amor is a group of six women who run a small grocery store in need of $1,450 dollars to purchase inventory of bread, milk, rice and other items. They proposed a repayment term of six months, which would be paid monthly. I felt confident about their plan and lent $25. While this may seem a small amount compared to what they needed, my loan was combined with the loans of 37 other individuals and within one day, the full amount was available to Llama de Amor.
Kiva.org gives us a tremendous opportunity to take ownership over microcredit and international development throughout the world. If every American lent $25 to a small business through Kiva, about $7.5 billion—nearly equal to the entire budget of the United States Agency for International Development—would be invested into the developing world. And this money would be paid back within a few short months.
Please take a few moments to visit Kiva.org and consider lending a little money to some of these amazing people who want to work their way out of poverty.
Jose Guzzardi of Sao Paulo, Brazil, is a Clinton School student working toward his Master of Public Service Degree.