NextBillion.net - Development Through Enterprise - Making Microfinance Easier - Comments

You are an investor? How

Anonymous — Wed, 11 Apr 2007 01:57:17 -0400

You are an investor? How are you an investor? Investors earn money by making good decisions on how to loan money and who to loan it to. The money they make comes from interest. Money loaned through KIVA does not pay it's "investors" interest. You, on the other hand, are a donor, because you are losing money which would be earning interest in your bank account. Sure it's a good philanthropic idea, but it's not an investment. If were then it could be something really revolutionary, because it would generate substantial attention. As it is, it makes great moral strides but not much business sense.

Clarification on charging interest

_daverichards — Mon, 21 Aug 2006 12:01:31 -0400

First. I really like http://kiva.org !! I am an investor and think is a very innovative service. Clarification on how charging interest works. You loan money interest-free to Kiva for a specific microentrepreneur (coordinated through partnership with on-the-ground local MFIs). The loan is then made to the microentrepreneur with a healthy/substantial interest rate. Kiva doesn't disclose how the interest received is split between Kiva and their MFI partner. Note -- Kiva does have overhead and so does the MFI. That's why they need the interest income to help cover their costs.

Making Microfinance Easier

Ethan Arpi — Thu, 17 Aug 2006 09:50:53 -0400

August 17, 2006 - 09:00, Business Week

Making Microfinance Easier

Story Link: http://www.businessweek.com/smallbiz/content/aug2006/sb20060815_733434.htm?campaign_id=rss_smlbz

Teaser:
Entrepreneurs in the developing world are starting or expanding businesses using small loans from individuals they're paired with online.

Excerpt: For 15 years, Angel Asenov Isaev, a 29-year-old Gypsy living in Sliven, Bulgaria, worked in a bike repair shop in the center of town, struggling to save enough capital to start his own shop. About five months ago, Isaev applied for a $250 loan from a local microfinance institution (MFI) called REDC Bulgaria.

He got the loan, opened the business, and is now working seven days a week to keep up with demand. But the money didn't come from Bulgaria: It came from America. That's because REDC had partnered with a U.S.-based Web site, Kiva.org, which pairs individuals with a few dollars to spare with entrepreneurs in the developing world (see BusinessWeek.com, 7/31/06, "A Little Money Goes a Long Way").