When Kiva.org started up in 2005, it was the world’s first microlending website, a pioneer in the world of microfinance. By inviting people the world over to make interest-free loans as small as $25 to impoverished entrepreneurs with a click of the mouse, Kiva has inspired a whole new generation of philanthropists.
In the five years since its founding, over 477,000 people have logged onto the website and loaned more than $150 million to 408,000 entrepreneurs in 53 countries.
On Monday, Kiva announced its latest pioneering effort: a pilot program for higher education student microloans. “In developing countries, access to funding for education doesn’t exist like it does in the United States,” says Premal Shah, president of Kiva.org. “We believe the internet community is in a unique position to share the risk of student lending in the developing world and if these students repay their loans — as we believe they will — it could be the very impetus needed to make education accessible for everyone around the world.”
Kiva is launching its pilot in Bolivia, Lebanon and Paraguay, and has plans to expand into at least fifteen more countries in a year’s time. Its student loans will work in much the same way as its regular loans do: after a lender goes online and chooses a recipient, he or she can track the loan’s progress — from initial funding to repayment. When the loan is repaid, the lender can choose to withdraw his or her funds, or re-lend to another student or entrepreneur, and continue the lending cycle.
“Kiva sees the educational loans as part of a larger ecosystem,” Shah said on fastcompany.com. “Not all households are in a community or have the status or luxury of having your child achieve even primary education, let alone tertiary education. It’s a massive problem when an 8-year-old girl can’t go to school,” he continued. “What we’ve seen is of those people that can get an education, there’s a 200-300% lift in income level. That’s why it’s so prized for those that can access it.”
photo: Courtesy of Kiva.org