Kiva.org - How Kiva.org Does Microloans

Overview: Kiva.org is a microlending site making it easy for lenders to make small loans and track them. Kiva.org is a 501c3 non-profit public benefit corporation. Loans as small as $25 go to very small businesses in the developing world.

Borrowers: Most borrowers are entrepreneurs in developing nations. You can see each borrower's profile and business description at Kiva.org

Loan Size: Loans can be any amount above $25. Small loans go a long way in developing nations, where a few hundred dollars buys a lot. You can loan more, and you can spread your loan dollars among a variety of borrowers.

Nuts and Bolts: To make a loan at Kiva.org, you send money through PayPal. PayPal does not take a fee for these transactions. Kiva.org then passes your money on to a local microfinance partner (who evaluates and works with the actual borrower). You can see what's happening with your borrower as loan officers write periodic updates. Your money is repaid into an account with Kiva.org. You can then take your money back or loan it to somebody else.

Interest: You don't earn interest on loans you make at Kiva.org. It is simply a way to give a helping hand to somebody. Borrowers pay interest, but the interest goes to the local microfinance partner. Regulations make it difficult for Kiva.org to pass the interest on to you. Keep in mind that you wouldn't earn much on a small loan, and the local partners have risks and expenses that you don't have.

Risk: Kiva.org does not deal in any securities. The loan is simply a personal agreement between you and a borrower. Currently Kiva.org experiences a 99.59% repayment rate. However, you should investigate your borrowers and make wise decisions with your money.

More Information: Learn more about Kiva.org:

• Kiva.org
• PBS Frontline Story (Video)

More microlending and social lending:

• CircleLending
• Prosper.com