, which I found when my colleague Arjun shared a note on Facebook (BTW – FB is becoming a publisher), has an amazing web 2.0 approach to benefit entrepreneurs in 3rd world countries fight poverty by focusing on microfinance (giving 3rd world businesses & entrepreneurs a way to borrow money). By the way, if you are curious, the word Kiva is a Swahili word meaning “agreement” or “unity”. What Kiva is aiming to do is an awesome example of how Web 2.0 technology can be used to improve the developing world. The concept? Letting YOU loan to the working poor. Here’s their description:

Kiva lets you connect with and loan money to unique small businesses in the developing world. By choosing a business on, you can “sponsor a business” and help the world’s working poor make great strides towards economic independence. Throughout the course of the loan (usually 6-12 months), you can receive email journal updates from the business you’ve sponsored. As loans are repaid, you get your loan money back.

The web 2.0 components I see:

  • Connecting people directly using blogs, profiles, reccomendations, and comments
  • Attempting to capture the long-tail (enabling small loans)
  • Widgets to spread word of mouth
    • “Promote This Business” widget, which gives users the ability to feature a specific business on their website
  • Using technology to improve efficiency
  • Connecting individuals who previously did not communicate (taking out the middlemen) — those in 3rd world countries in need with those wishing to lend their money

Loan Cycle

In my opinion, it’s brilliant for several reasons —

  1. Individuals have the ability to loan money to specific businesses/entrepreneurs that are highlighted on the site. Why is this important? I think a large reason many don’t donate more is that they are weary of contributing to a large non-profit foundation that spends 70+% on admin and fundraising efforts — rather than actually putting the money straight to work in developing countries.
  2. Jounal updates from the businesses/entrepreneurs you loan your money to. Hearing specific stories by the people benefiting from your donations (in this case, your loan) is sorely missing in many charities. I donated several hundred dollars to Heifer this year as Xmas presents – but I don’t really have a way to know about the specific families that money helped (by no means am I complaining about Heifer — I have heard nothing but good things about the organization).
  3. Enables loaners to see others that have loaned to the same businesses. For instance, check who has loaned to Julia Ápolinario in Ecuador or Tatyana Karvetskaya in Ukraine.
  4. Individuals are given the opportunity to help those less fortunate than them by lending – rather than giving – their money. Is there really a good argument NOT to lend your money?? I’m guessing the primary one will be “I want to wait to make sure people get paid back.” Try $25 and see how it goes.
  5. It is almost entirely web-based, so there should be extremely low overhead.
  6. It uses existing organizations to distribute funds. This enables partner organizations to NOT have to devote considerable resources toward fundraising — which has always been an expensive process that should not be a core-competency of a non-profit foundation. Now fundraising doesn’t have to be.
  7. Kiva is a tool to help SUSTAINABLE change. Helping others help themselves is the best thing we can do for the developing world.

Personally, I have no problem giving my money to charity — I actually enjoy it. But this project takes away many of the barriers to helping those struggling to get out of poverty that exist today. I don’t believe the majority of donations to non-profits should not go toward overhead expenses (as they do now). It’s great to see a web application connecting 3rd world entrepreneurs straight with those interested in loaning their money in a way that can actually make a difference in the world (rather than just adding to the fortunes’ of investment firms). This site seems to be completely focused on using viral marketing to spread awareness to all corners of the globe.

I see a MASSIVE opportunity — Kiva WILL CHANGE the way non-profit foundations operate and vastly increase the money being sent to those in need. It will enable foundatios to focus more of their effort on helping those in need, and less on raising funds.

I added a Kiva widget to the bottom of my sidebar — I encourage you to do the same if you maintain a blog. This is an absolutely amazing project that I fully plan to help spread awareness for. If you like the concept — tell as many people as you can. Though I haven’t loaned any money yet, I assure you I will (and will probably blog about it when I do).