Kiva

Definition

Kiva is a nonprofit organization that allows individuals to lend money via the Internet to low-income entrepreneurs and students in over 80 countries. This platform operates under the principles of microfinance, promoting social entrepreneurship by connecting lenders directly with borrowers to foster economic development and empowerment.

5 Must Know Facts For Your Next Test

1. Kiva was founded in 2005 and has facilitated millions of loans to borrowers around the world, making it a pioneer in the field of online micro-lending.
2. The average loan on Kiva is about $500, making it accessible for both lenders and borrowers while fostering entrepreneurship in developing regions.
3. Lenders can choose specific projects or entrepreneurs to support based on their interests, which helps personalize the lending experience.
4. Repayment rates on Kiva loans are remarkably high, often exceeding 95%, indicating a strong commitment from borrowers to repay their loans.
5. Kiva's model has influenced many other organizations and has helped raise awareness about microfinance and its impact on poverty alleviation.

Review Questions

• How does Kiva utilize technology to promote social entrepreneurship and empower low-income individuals?
  • Kiva leverages technology by providing an online platform that connects individual lenders with low-income entrepreneurs and students. This direct connection allows lenders to make small loans to borrowers across the globe, fostering a sense of community and shared purpose. The ease of use of Kiva’s website also enables more people to participate in microfinance, supporting social entrepreneurship while creating economic opportunities for those in need.
• Discuss the role of microfinance within Kiva's framework and its significance for entrepreneurs in developing countries.
  • Within Kiva's framework, microfinance serves as a crucial tool for empowering entrepreneurs in developing countries by providing them access to small loans that traditional banks may deny. This financial support helps individuals start or expand businesses, improve living conditions, and invest in education. By facilitating these loans, Kiva promotes economic growth at the grassroots level, helping to lift communities out of poverty through entrepreneurial initiatives.
• Evaluate the long-term impacts of Kiva's lending model on global poverty reduction efforts and economic development.
  • Kiva's lending model has demonstrated significant long-term impacts on global poverty reduction and economic development by enabling individuals to access financial resources that can lead to sustainable income generation. By empowering borrowers with the funds needed to start or grow their businesses, Kiva promotes self-sufficiency and resilience within communities. This approach not only helps improve individual lives but also fosters economic stability and growth within broader local economies, making Kiva an essential player in the fight against poverty.

Related terms

Microfinance: A financial service that provides small loans and financial assistance to people in low-income communities who do not have access to traditional banking services.

Social Entrepreneurship: The practice of identifying and addressing social, cultural, or environmental issues through innovative solutions and sustainable business models.

Crowdfunding: A method of raising capital through the collective efforts of a large number of individuals, typically via online platforms, to fund a specific project or venture.