Kiva: How a microlender operates

This is the VOA Special English Development Report.

Sometimes a small loan is a big deal. Microcredit has helped many poor people who want to develop self-employment projects into businesses. And it has helped small businesses grow so people can rise out of poverty.

Today there are thousands of microlending organizations. Most depend on banks and rich supporters for the money they lend. But what about people who do not have a lot to invest but want to be socially active? They can go through a microlender in San Francisco, California, called Kiva. Kiva means agreement or unity in Swahili.

Matthew and Jessica Flannery wanted to create a way for average individuals to lend small amounts to businesses in developing nations. In 2004， the couple spent several months in Kenya, Tanzania and Uganda. She worked for Village Enterprise Fund, a microlender; he was a filmmaker. They tested Kiva in Uganda in March of last year. They quickly raised money from friends and family to make loans to seven small businesses.

Kiva operates through a Web site, kiva.org -- k-i-v-a.o-r-g. People can lend as little as twenty-five dollars at a time. And they can pay with a credit card through the PayPal system, which is processing the payments for free.

The money reaches small businesses around the world through Kiva's local lending partners. These partner organizations charge interest but Kiva does not. Loans are generally for a period of six to twelve months, sometimes longer.

More than 400 entrepreneurs are in the process of repaying their Kiva loans. At least thirteen have fully repaid them. Lenders receive e-mails with progress reports about the businesses they supported.

On a recent day the Kiva Web site listed twelve businesses in need. Tom Okwii, for example, is an entrepreneur in Mbale, Uganda. He needed 500 dollars to buy chickens. Alice Wanjiku in Kiserian, Kenya, was trying to raise 750 dollars to buy two dairy cows.

The biggest Kiva loan listed to date was for 2,000 dollars. The local partners are responsible for forwarding repayments every three months. People who lend money do have a risk of not being repaid. But Kiva says its repayment rate so far is 100 percent. And it says its partners have historical repayment rates that average better than ninety-six percent.

And that's the VOA Special English Development Report, written by Jill Moss and online at www.unsv.com. I'm Steve Ember.