Online loans help world’s poor:
Kiva’s story starts a little more than two years ago, when Jessica Flannery went to East Africa. She was working for a group that gives $100 grants to needy projects.‘Every single day, I would meet an entrepreneur, and hear about how $100 had changed not just his or her life, but also the lives of their families, friends and other community members,’ said Ms Flannery.
‘Take a goat herder in Uganda. If you give him $25, that’s two smaller goats. That’s a great start. With $100, you can imagine more goats, perhaps a small shelter, stock up on goat feed. So, that little bit of money can really help set someone up.’
[...]
The result is the Kiva website. Kiva is a Swahili word for unity or agreement. The site went live last year.Kiva users are not donors, they are lenders. Matt Flannery calls it a kind of “peer-to-peer microfinance.” Using the internet, Kiva lenders can loan out as little as 5 dollars to a project.
The challenge:
The challenge that these microcharity enterprises have is identifying great projects, vetting them, ensuring that they are on the level, and ensuring that they are using the money wisely.