Tuesday, June 26, 2007
Kiva Update-First Payment
Hey I just wanted to let the skeptics know that my loan of $25 that I made a couple monthes ago on kiva.org has received its first repayment. Ekua Awortwe of Ghana, the owner of the food sales business that I loaned my money to has given me back $5. Ekua's loan, comprised of my contribution as well as those of many others, was $900 and thus far she has repaid $180, or 20%. The loan period is for 12 monthes and at the end of that period I will hopefully have received my full $25 back and then I can make another loan.
While none of the returns are guarenteed, the repayment rate has been 99.74% thus far do to careful budget planning and followup by Non-Governmental Organizations (NGO) on the ground. The NGO that Ekua works with is the Kraban Support Foundation and to date they have helped distribute over $500,000 in loans to 600 small business owners, particularly women. This is a great project, kiva.org gives all the money to the businesses, so far over $8,000,000.
Low interest loans can be key to any growing business, especially in the developing world. I've seen firsthand how major banks that operate in developing countries make it very difficult to get loans and the rates are typically quite high, often higher than the rate for foreign multinational corporations. Microfinance projects like kiva.org really give small businesses the chance to get off their feet and grow, moving the countries in which they operate in the path towards increased development and sustainability. If the businesses prove to be successful they will begin to make effective contributions towards the operation of their state in the form of taxes and if the government isn't horribly corrupt, that money would ideally make it back to the people in form of social services funding for health care and education. Oh what a fun process. Good luck Ekua.