A few months ago I heard about an organization called Kiva. Kiva allows individuals or companies to loan, not give, money to small businesses in the developing world. Here is more about how it works:

By choosing a business on our website and then lending money online to that enterprise, 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 monthly email updates that let you know about the progress being made by the small business you’ve sponsored. These updates include reports on loan repayment progress, photos of new capital equipment, narratives on business growth and standard of living improvements, and more. As loans are repaid, you will get your original loan money back.

You can loan as little as $25, even using PayPal. The big question some might have is why a loan and not a donation? I will let the Kiva site explain.

Over the last three decades, microfinance has proven to be an effective tool in raising the standard of living in impoverished communities. Up to now, there has not existed a way for individuals in developed countries to participate directly in this exciting movement. Kiva believes individuals in developed countries will find loaning to be a more rewarding and sustainable form of involvement in international development than traditional giving. In other words, when you receive your original loan amount back, you are more likely to loan again than if you simply made a donation.

I was very excited when I heard about this. So Greenthinkers and Sancor Industries Ltd. (who makes Envirolet® Composting Toilets and helps pay for this site and employs me!) decided to loan a small amount of money ($100.00) to see what this was all about.

We really liked the idea of helping a small business. We know how difficult it can be in the beginning for a business and hope our small loan can give them the little bit they need to be successful in business and life.

A cool thing about Kiva is you choose who to loan to. So, you can browse the different business proposals and pick which small business to loan money too. And, as they progress you get updates in the form of a business log or diary.

We chose a company called Blessings in Uganda run by Margaret Etyang. Here is more info on Blessings:

Partner: Village Enterprise Fund Partner Rep(s): Moses Onyango , Joseph Adongu Location: Tororo, Uganda Entrepreneur: Margaret Etyang Activity: Retail Shop Loan Amount: $500 Loan Use: Buy stock for her shop. Start Date: December 1, 2005 Loan Repayment Term Range: 6-12 months Amount Repaid: $0 Margaret is married with nine children. She has been doing this very business for five years. She has experience in her business. She got a grant money worth 100 dollars from Village Enterprise Fund in the year 2001. Margaret runs a small store outside of Tororo that deals in domestic and kitchen supplies. She has the only such store in the area and people walk up to an hour just to buy supplies from her store. She deals in both wholesale and retail. A loan will help Margaret significantly upgrade her store. She is currently supporting her family with the store, but they are struggling to pay school fees and buy medicine. Given a loan 500 dollars, she plans to expand her business by buying the essential commodities in large quantity — sugar, salt, bread, cooking oil, washing soap, toilet soap, rice, baking powder, baking flour, matches etc.

Some of the other active businesses on the Kiva site can be found here.

So, we loaned $100 and others loaned the remaining $400 she needed. On Decemeber 16 we received an update:

Business Update She has a shop that she started as a small business four years ago with the grant that was given to him with Village Enterprise Fund (VEF), the shop deals with the sale of domestic and kitchen supplies and it’s the only shop in the village of his area, their for she enjoys a lot of abnormal profits. With the help of the loan of $500, it helped her to buy more stock in her shops and now days since she received the loan, she now sales most of the supplies in wholesale and retail to the people within her local community and her stock has highly been lifted by the loan and she now enjoys lots of profits being the sole trader around the whole village and she gets a lot of profits and she is now able of supporting her fairly in paying her children school fees and meeting all family needs. The loan has helped her open up an expanded business with a lot of essential commodities that has large market within the community making her capable of handling the loan and paying it back faithfully in the tune of paying it back. Thanks, Joseph Reporter.

I am excited to get more updates! We are going to look into other business to loan money to in 2006.

You should check out the Kiva web site and consider loaning a small amount. This also makes a great gift!