Socially Responsible and Efficient Micro Loans

This letter is written as a follow up to an article I wrote entitled “Investment Choices and Quality of Life” in the View Point column of the Jan 3, 2007 Driftwood.  In that article I suggested that there could be significant value in local resident investors directing their investments towards the local Salt Spring community.  The article was inspired by the visit to Salt Spring last fall by Catherine Austen Fitts and her creation of the concept of the Solari Circles.

Today I would like to describe a new and innovative internet based business solution I have recently discovered.  In my belief it is a good example of a very efficient and socially beneficial loan mechanism.

The organization is called “Kiva” (Swahili word meaning “agreement” or “unity”) and can be located on the internet at  The purpose of the organization is to provide support for the loaning of very small loans ($25 U.S. and up) from individuals in the first world to less fortunate individuals throughout the world.  It is based on the excellent pioneering work of Muhammad Yunus & The Grameen Bank, which was awarded The Nobel Peace Prize for 2006 based on the practice of providing very small (micro) loans to the poor.  Amounts of money that are almost significant to us could be of tremendous benefit to those in the third world.  For example, for the same amount as a nice dinner at Mobys and feature flick at the Fritz, a street vendor in Bangladesh could double his business inventory or purchase a Rickshaw, providing an opportunity for him or her to grow their business.  Such loans are virtually impossible to fund locally without highway robbery interest rates (up to 300%).  The Kiva organization facilitates the efficient gathering, consolidation and transfer of these relatively small amounts of capital to and from those in need.

Notable features of the KIVA process:

Consider the alternative if you had to locate a borrower in say, Kenya, to qualify them, locate other individuals throughout the world willing to loan as well (up to 20 at $25 each for the sum of $500), consolidate the funds and arrange transfer and conversion to local currency, provide status reporting, and when the loan is repaid in the future, return the funds to the participants.

To summarize, I was very impressed to find an organization that could provide so many benefits for the borrower and lender, yet have efficiency that 100% of your dollars are received and utilized by the borrower.  I encourage the reader to check out the Kiva site on the Internet, if only to gain familiarity that new efficient business mechanisms exist today that are changing the world.  My thought is that by looking to examples of creative financial mechanisms such as Kiva, we can be encouraged to seek out and develop local new innovative financial mechanisms that facilitate our own needs.

If you are interested in discussing the above or similar topics or becoming involved with further activities or collaborations, please contact me at: or make your opinions known by way of the Driftwood.  I am continuing to receive feedback on my first article and am meeting with those that are willing to do so.  It is my intention to report my findings in a future article.

As I have again discussed financial topics I will provide a disclaimer.  I have no affiliation with any sales of any investment vehicles of any kind, and absolutely no interest.  My motivation is solely for myself, or for possible collaboration.

The writer is a retired Project Manager from the University of Calgary and has a strong interest in personal finance.