October 16, 2009
Peru: Kiva's Web-based Microfinance Growing Up
BY Joe Rubin
In 2006, when we first broadcast our story about Kiva's first micro-lending experiment in Uganda, the San Francisco-based nonprofit was already a modest success. The concept was simple: web surfers with a little bit of extra cash could use their credit card to provide microcredit to entrepreneurs in developing countries.
At the time, Kiva had just surpassed $500,000 in loans. This week, Kiva celebrated its fourth birthday, and its growth since our story aired has been nothing short of meteoric. Kiva is closing in on $100 million loaned and expanded its reach to small businesses across the planet.
We thought we'd check in with the company on its anniversary and find out how it's working with locals in a beautiful and remote high Andean outpost in Peru.
In Ayacucho, a nine-hour bone-shaking bus ride from the capital, Lima, Kiva fellow Suzy Marinkovich is seeing first hand how some of those loans are being used. As a Kiva fellow, it's her job to check in with borrowers and blog about their experiences for interested lenders on the Kiva website.
With Kiva's help, local partner FINCA Peru has transformed a former prison in this city, once wrought with violence from Maoist guerrillas, into an artisans' market, bursting with color.
Still, Ayacucho is hard to get to and dirt poor. Over webcam, Marinkovich told us that local artisans struggle to sell their wares, making only about $2 a day. Hardly enough, she says, to support the average family of five. Now, many of these artists are getting together and using the Internet to connect with a global market to sell their work.
Follow an interesting discussion on microfinance and Kiva's role on David Roodman's Microfinance Open Book Blog. Kiva CEO and cofounder Matt Flannery responds to Roodman's recent critique of the company.