Progressive Democrat Issue 105: HELPING THE WORLD: KIVA microlending update

In the past I have described some of the successes of the organization KIVA and my participation in it. This was part of a blog-blitz that raised considerable interest in KIVA about a year ago, leading to a big expansion of their efforts. And I have used the KIVA idea as a way to envision an integrated, grassroots based approach to interenational development, a broader idea that I wasn't so successful in pushing on the blogs.

Once again I want to spread the word about the wonderful work of KIVA. Even if I can't generate broader interest in a blog-based, grassroots development strategy, I know I can help out KIVA. What follows is a description of the five small businesses I have loaned to which have paid back their loans in their entirety. I want to share their stories in the hopes I can inspire yout to join in supporting KIVA's efforts. In the long run it probably won't cost you a dime!

This is a message from a woman's coopertaive in Senegal that I have leant money to through the organization KIVA:

“We’ve taken many loans from other organizations, but we haven’t been able to save much because of the high interest rates and savings deposits that those loans required. This time is different, and I think that we’re going to make a good profit. SEM is the best lender of all.”

SEM is one of Kiva's many partner organizations that manage Kiva's microloans locally. Here is some background Kiva gives regarding its loans in Senegal:

Senegal is one of the world’s poorest countries, yet its solid democratic tradition and highly developed associational life distinguish it from other countries in its income group. Especially remarkable are Senegal’s networks of rotating savings and credit associations, known as tontines. Commonly organized by groups of twenty to thirty housewives who live in the same village, the tontines provide poor women throughout the country with small loans to finance modest income-generating activities. Repayment rates within these associations are excellent, because they are based on local reputation and personal trust between the members. However, their financial resources are limited to the contributions of their members, frequently subsistence farmers with very little disposable income. This has prevented the traditional tontines from meeting the demand for rural microenterprise loans and restricted their impact on the economic development of their communities. Senegal Ecovillage Microfinance (SEM) works with our partner organization CRESP to bridge this gap by linking traditional village credit associations with outside sources of finance.

I have now been loaning through KIVA for a little over a year. It gives me a huge sense of satisfaction to be helping people this way. So far I have participated in 5 loans that have been fully repaid. Here are some of the businesses I have helped:

1. Ms. Penina Oburu's Fur Ber Fish business in Tororo, Uganda. Penina used her loan to hire a truck to go to Lake Victoria and buy fish for herself there, eliminating a middleman. This allowed her to cut her prices when she sold her fish in her village but to also make a larger profit. She was still struggling even with the loan, but she was able to hire two people to help her and both business and profits picked up. Meanwhile, the village received fish at lower prices. Here is what Penina had to say of our loan to her:

Special greetings to my business funders who helped me through Kiva fund Uganda. I wish to thank God who helped me to work hard with the loan money. When I look back to the past years how I used to struggle for the survival of my family I soar in my heart. That is why I infinitely thank all of you my funders to have made a difference in our lives. You have our family terrible situation and now we can afford to bear a smile on our faces. I was lucky to have received this loan money in the booming month which we receive once in a year i.e the month of December. All the fish I bought during last, I sold it all and received more profits up to 40%, unlike before when I used to get only the profit between 10-15%. So far am able to put food on the table for my family everyday using the part of the profits I get. I intend to increase my stock and that will allow me to refund part of the loan, pay school fees for children, pay medical bills, buy clothes & beddings for my children to mention but a few. I sell my fish very deep in the village and this has helped the people in that locality where I operate not to walk for long distances to buy fish. I serve them right at their residential places. Thank you once again for blessing us with the loan money. It will be my pleasure to see another family being blessed. God bless. Yours Penina Oburu.

2. Ms. Rosa Beatriz Gaitan's Everyday Variety housewars store in Danli, Honduras. Here's how Rosa described her business at the beginning of the loan:

My little market is one of the biggest and luckiest in my whole community. I sell personal-care products and school supplies for children among other ítems. I have been in business for 13 years, and I have been able to grow my store little by little each time I sell a little more. Since school is starting, I need to invest in inventory of school supplies like notebooks, pens, and other things.

And here is what she said (in her native Spanish) after receiving the loan:

Ahora si puedo decirles a mis clientes que si hay variedad de todo y lo que buscan lo encuentran en mi tienda, gracias a los fondos recibidos mi negocio ha crecido en ventas y clientes. Tengo mas producto nuevo y con las ventas mi inventario se mueve rapido. Los ingresos que recibo me ayudan con los estudios superiores de mis hijos.

Rosa's success with the loan allowed her to repay her loan in about half the term of the loan.

3. Ms. Lovisa Asinde's Kuro Chiki Hotel in Tororo, Uganda (in Uganda "hotel" means restaurant). Lovisa is a widow with five children. She started her business by baking pancakes, chapatti and mandazi in 2000 and one of KIVA's partners, the Village Enterprise Fund, gave her a donation of 100 dollars and some training. This allowed her to expand her business into a restaurant and she applied for the no-interest KIVA loan I participated in. This loan allowed her to expand her business very successfully. Here is what Lovisa had to say partway through the loan period:

I greet you all my Funders of my business and thank you so much for all you have done for me, I appreciate. Above all I thank God for his provision, strength, and knowledge. For years I have been selling cooked food and through thick and thin, I struggled to look after my family. I thank God for the loan money you gave me through Kiva fund. Am realizing improvement and success in my business, and this is because the number of items I prepare each day has increased, and this is bringing me more customers, this allows me to sell off all the food prepared each day. I have been able to operate in a decent place (clean environment, with a real building). The people are now served according to their preferences unlike before the loan money when I used to sell only posho and beans and people could always be forced to buy since town was far for them that they could get other foods that were not in my restaurant The community has benefited from my business because I buy food staffs from them and at the same time get services from my restaurant. All thanks go to you my funders. God bless you so much. Yours Lovisa Asinde

Unfortunately, one of her children became sick and she had to neglect her business to care for her child. This led to a substantial loss of her customer base. The flexibility of a KIVA loan allowed her to delay her repayments for a few months until her situation improved. Ultimately, she was able to fully repay her loan. Even in adversity, a KIVA loan can be helpful.

4. Mr. David Owino's Keep Riding bicycle shop in Tororo, Uganda. David's shop originally sold spare parts and did repairs. But his KIVA loan allowed him to start selling new bicycles, increasing his profits in a community where most people ride bikes. Early in the loan period he wasn't doing well because it was before the harvest and no one had much money. The region suffered from lack of rain early on, though eventually the rains came and planting could begin. This delay led to a disruption of the entire economy. But later, once agriculture picked up, David's business revived and he was able to build his business and pay off the loan. His future plans are to build a more permanent shop for his business.

5. Ms. Pricila Opendi's New Life Fish business. With the help of VEF, one of KIVA's first partner organizations, Pricila developed excellent business skills. The KIVA loan allowed her to buy more fish directly from the fishermen, bringing lower prices to her village and her profits enabled her to manage her family's needs: healthcare, school fees, and an improved diet.

In all cases of Ugandan businesses above, a side benefit of the loan was that each family was able to pay their local school fees for their children, something many families are unable to do. So the loans also help the next generation by giving them a better education.

KIVA started lending in East Africa but has since expanded worldwide. They are very careful in who they loan to, working with local partners who help train business owners and who manage the loans. You can loan as little as $25 and KIVA bundles these small loans to meet the needs of businesses in need of loans: anywhere from $150 to $2000. The loans are no-interest, but you can withdraw the money once the loan is complete. Or you can do what I do: keep reloaning to new businesses.

Please help KIVA meet the microloan needs of small businesses around the world.

And for those who want to do one more good thing, I am a firm believer that the environment must be healthy for economics to survive. I urge people to also consider donating to the appropriate international program of the Wildlife Conservation Society in the region where you have made a loan. This way you are BOTH supporting the environment and small business development in the same region. In many cases you also will be preserving forests that help mitigate global warming as well, benefitting ourselves.

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