After four years of branding themselves as a leading micro-finance organization for entrepreneurs in poor and under-developed countries, Kiva decided last month to expand their outreach into the United States.
This is Kiva’s initial launch in a country considered as wealthy, in terms of access to opportunities and capital, and feedback from supporters regarding this expansion has been met with mixed commentary.
Kiva’s founders began the non-profit enterprise in 2005, focusing their efforts on empowering residents of impoverished nations by providing loans through small amounts of money collected from supporters worldwide for men and women to start businesses that serve and strengthen their communities and lift families out of poverty.
The organization has spearheaded loans of $85.8 million that assist approximately 210,000 individuals in 182 countries. Those who are disappointed about Kiva’s decision to assist U.S.-based entrepreneurs believe that loans to business owners in rich lands will dilute the pool of money available to poor nations.
American business owners have many methods available to raise capital. Books and other resource materials remind us that personal savings are first for funding, followed by monies borrowed from family, friends, banks, credit unions, small business associations, and grants and loans from private groups.
Those who are opposed to U.S. inclusion point to these vast resources. However, many American entrepreneurs with credible plans have felt the economy’s sting.
Money sources aren’t as plentiful as in the past, and though the U.S. is not considered impoverished, it’s mending from a domino effect of big business closures that have drastically decreased capital once available to small businesses. Perhaps this classifies many more U.S. start-ups as disadvantaged, at least on a temporary basis.
What’s your feeling about Kiva’s inclusion of American-based entrepreneurs? Are you opposed because it dilutes funds available in destitute countries or, due to your own inability to find traditional lenders, does this news encourage you to apply for funding?
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About the Author: Shirley George Frazier is chief marketing officer at Solo Business Marketing, a professional speaker at worldwide business and marketing conferences, and author of Marketing Strategies for the Home-Based Business: Solutions You Can Use Today. Shirley twitters at @ShirleyFrazier and blogs at the Solo Business Marketing Blog.
I’ve been a Kiva supporter for a few years now, and I think this is kind of an overblown issue.
First of all, Kiva actually seems to have more people willing to finance than it does qualified businesses to lend to (overseas). At least from my experience, anytime I went to lend, there would be a tiny selection (maybe 5 -10 businesses), since all the others had already been funded.
So it seems to me that there’s an excess capacity (funding available) that they need to put to work – why not apply that locally?
I suspect that not too many American businesses are going to take the time to apply for a $200 micro-loan, but for those that could benefit from that, why not?
Charity begins at home, right?
I can say I am disappointed at them. are they trying to become a venture capital now?
I don’t know much about Kiva, but I think it is up to the owners and leaders of the organization to decide what they want to do. I think that micro-financing in USA could turn out as a great thing.
Well, I am in the group of Kiva lenders who were very disappointed by Kiva’s decision to lend in the USA. The USA is a rich and democratic country and ought be able to look after its own people, not hold out its hand to the rest of the world. Kiva purports to be an international organisation and indeed has many lenders outside the USA, so talking about “charity should begin at home” in an international organisation should mean the poorest countries of the world, not the wealthiest.
I have to wonder if people who support the US loans fully appreciate the kind of poverty that exists in developing nations.
As a result of Kiva’s decision to re-orient its focus, I am shifting my new lending and re-lending into United Prosperity, a organisation that looks like Kiva in its earlier phase. If you are looking for an alternative to Kiva, check it out:
Don’t get me wrong — Kiva has done great things and up until this recent decision, I was singing its praises, but I have been very disillusioned by this recent decision and the processes that surrounded it. In particular, I was particularly upset because I continued to lend to developing nations during Kiva’s pilot of the US loans, only to discover that Kiva used the fact that “active lenders” continued to lend to developing nations as “proof” that the US loans were welcome.
Recently some loans to developing nations went unfunded on Kiva, a first apparently. It appears that US loans do have a negative impact, despite Kiva’s claims otherwise.
I am from the US. If you think that the United States is the richest country in the world and it’s easy for small business’s to start out and be successful then you are NOT from here! I would love for you to come on to this country and give it a try please! My husband and I are trying very hard to make ends meet with our “small business” unfortunatley everyone else has their hand in it so it’s almost impossible to get anywhere with it. Also if the US was wealthy (and im talking about us LITTLE PEOPLE) then our home wouldn’t be deemed condemed to live in with us still living in it. So if you think us “American’s” are so rich come on over and you’ll see how rich we are!
I think the U.S. already has all kinds of ways to raise capital on their own, as the under-developed countries don’t really have a choice this would be their best pursuit for starting their entrepreneurial quest, but every venue sure helps especially for the desperate.
People in the U.S. have more resources available to them than others in less developed countries. Additionally, many of these resources are free.
If someone wanted to start a business today in America, they can go to a local SBA office, Small Business Development Center, SCORE chapter or other small business organization to find out what they need to do in order to become an entrepreneur.They can also go online (computers at their town libraries) to visit sites like this one. And, despite the current economic climate, there is almost always money available for good ideas in America.
In thinking about Kiva’s mission expanding into the U.S., two quotes come to mind:
1 – If you want something bad enough, you will find a way; If you don’t, you will find an excuse.
2 – Security is an illusion. All there is in the world is opportunity.
I applaud Kiva for their noble efforts in making capital available to people who otherwise would not be able to start their own companies and take control of their lives. I don’t think that’s the case in America.
Its not wrong, but it is misguided. I think Kiva values a dollar sent to a poor entrepreneur in a poor region less than one that is given to an entrepreneur in the US while the reverse is true in reality. If it is money they have in abundance then they are not doing enough in mobilizing the entrepreneurs in poor regions enough. Fast tracked growth can result lead to deviations from an organizations mission, which is evident in that decision by Kiva.
Unfortunately, many people do not realize that microfinance has been in the US for over 20 years, so Kiva is only a newcomer in providing microloans to entrepreneurs. Keep in mind that microlending is not a grant or free money. People who take out microloans must pay them back, plus interest. Not everyone in the US has equal opportunity to access financing and microloans can empower and open doors for people who would otherwise not be able to access financing elsewhere (look around at any poor neighborhood – how many banks do you see? Hardly any). After all, these entrepreneurs are taking initiative to generate their own income and create new jobs – and we should encourage and celebrate that!
I can appreciate the poverty that exists within other nations – but really, isn’t “international” exactly that – international?
I don’t think that including the USA is the real factor. Because there are many poverty stricken people in the USA as well. The real factor will be Kiva’s determinations as to who gets what and who needs it the most. Including the USA shouldn’t be an issue if their practices remain fair. If they do, people will all remain on the same playing field.
I agree with you 100%. Thank you!
I think it’s a great idea !
The US banks stupidly are sticking their noses up at potentially strong micro companies while our government throws money at their ultimately broken business models.
We could use someone with the good sense to lend to businesses in the very beginning stages.
After all small business growth will be the way the economy snaps back into shape.
It always has been and always will. The SBA thinks your a small business when you’re doing a million a year in sales?
Huh? A ton of job growth would happen could with very small investments (by US standards) say 2500 to 25000 dollar micro loans.
If the banks and the government realized the benefits of micro business funding we could have been on our way out of the mess long ago.
Hi! Kiva sounds like a great organization. My opinion is that Kiva should continue their efforts in developing countries. The economic decline is especially felt in impoverished countries. Third world and developing countries need help from organizations like Kiva now more than ever!
I think its great. The “micro lender” has the choice. Some people, myself included, are motivated and inspired by helping someone in a truly impoverished location. Others, want to loan closer to home and feel good about that. I agree with some of the comments that it is overblown. Kiva is a platform to make lending happen where it isn’t working, or happening, on a consistent and level playing field. Their effort in the US is one I applaud. I think Katie said it pretty well.
Chris, I agree with you. If Kiva adopted an objective measure of poverty, I think where the lender lives does become irrelevant. So if Kiva said, “we’ll target the 20% poorest people of the world”, then that could be translated into an annual income below $X per year. Then Kiva could fund loans for people in any country below that income threshold.
This is an extraordinary moment in the history of commerce.
As a Business Anthropologist, I am fascinated by the explosion of community-type behavior, which I see in new media http://bestwork.biz/blog/?p=144 as well as more traditional pathways.
That Kiva is reaching out to others in new ways is part of a global shift triggered by the current recession. Some new exchanges will be more effective than others – that’s all part of the amazing experiment that constitutes human society.
Our brains are wired to respond to others – especially as vulnerability is revealed or illuminated. That tendency is the basic engine of commerce; it’s been powering human communities for 150,000 generations, and it will continue to drive new solutions.
I am grateful to all who step up, in whatever way they can.
Most of the people living below the poverty line in this country are women and children dependent on women. Then there are working poor women trapped and steered into “women’s jobs” that pay far less than jobs available to men. Add women suffering from abuse, barely able to survive, much less maintain a stable, well paying job or protect their children. Then there are women divorced or widowed after spending their prime working years taking care of the home and children, unpaid and without job experience, pension or savings. Why do we sympathize and want to empower women in other countries but blame poor women in the US who live in similar situations for similar reasons. Instead of providing short-term welfare payments, demanding in return that single parents work in jobs that do not provide benefits or adequate pay, and failing to provide quality or any child care — why not support microenterprise loans to help US women build lives that sustain them and their families? It is common sense.
My wife and I and my kids have been been joyfully loaning through Kiva. We are not RICH. We struggle, but are blessed to participate as well as teach our children to be thankful for our blessings. Living here in the USA we also see great needs and aspirations in SOME of those who have less. There are clear minded people with ethics who are on disability who want to be independent (Wow!). There are the young disciples of Jesus who have gone through our “RICH” american foster system and were never adopted, finding themselves thrown to the street at age 18, with nothing . There are those who have changed their mind (true repentance) and desire an opportunity. We are exactly where we need to be to serve our brother and sisters, this is OUR opportunity. I am happy to see KIVA allowing American access so I can give MORE in the USA as well.
His Peace to all of you.
United States | Health | Natural Medicines
A loan of $8,500 helps Cheryl to invest in Internet marketing, as well as produce more inventory to meet her growing sales”
This is a good example. Really? Is this what KIVA is for?