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September 18, 2012

Microfinance Combines Charity and Business Savvy

Saloni serves as the Media Officer for the Kiva High School program. She helps high school students bring microfinance into their school communities through curricula, clubs and events.

Instead of donating to charities, more people are choosing to give to needy families in poorer countries through microfinance — small loans to help entrepreneurs build or expand their small business. Supporters of microfinance claim these small loans give people tools to lift themselves out of poverty. 

Saloni is a sophomore at one of the best business schools in the country and already a veteran investor. In high school, she learned about Kiva, a website that helps connect everyday lenders with entrepreneurs in the developing world. By the time she started interning for Kiva at age 16, she had already helped finance 85 small businesswomen. Now, she has helped over 280 women in 26 countries. 


How did you get involved with microfinance? What do you enjoy about it?

I first heard about microfinance in high school at a meeting for our Global Empowerment and Outreach Club. I was instantly attracted to the idea that microfinance empowers the underserved better than traditional donating can. I started my own small business selling hand-made memory boards so I could start my own account on Kiva. Kiva, the largest online microlending platform, allows us to choose who we want to lend to. I used the profits from the business to start making loans on my own on the website.

After I made my first 80 or so loans on the website, I went to a Kiva social in San Francisco and met many representatives from Kiva. It was amazing to meet the people behind Kiva and interact with the microfinance community first hand. I began working at Kiva the following summer as an intern for the Kiva High School program, a network of microfinance clubs that enables high school students to organize themselves to spread the word about microfinance and change lives around the world. Now I am the Media Officer for Kiva High School. I also have continued my involvement with microfinance in college as well, serving as a board member for Penn Microfinance.

One of my favorite things about microfinance is that the benefits that borrowers receive are sustainable and have a long-term impact. Rather than giving a one-time donation that has a myopic impact, I enjoy giving an opportunity for someone to lift himself or herself out of poverty.

What skills have you learned through micro-lending? Will you continue to use these skills in the future?

By assessing the risk of certain loans and favoring quantity over quality, I learned how to make smart financial investments with the money I had earned. By mitigating the risk of the loans I made defaulting, I learned basic principles of economics and sound decision-making. I will definitely use these skills in the future as I continue to make microloans. I am also using these skills in business classes at Wharton as well. My first-hand experience with using my money in this manner has helped me better understand my finance and accounting classes here in college.

How can other young people get involved in microfinance?

Young people can get involved with microfinance by starting a Kiva chapter at their high schools and can also lend on their own. Students can also learn more about microfinance and have their teachers and administrators integrate education of microfinance into their curricula.

With microfinance’s global reach, it can be used to teach business, international relations, history, and culture. Today’s elementary, high school, and college-aged students are part of a generation that can mobilize together to make a difference. We are part of a generation that has grown up on the Internet, values social connection, and believes in their capacity to make a direct and tangible impact on the world. Organizations like Kiva, Month of Microfinance, and Grameen Bank have opportunities for students to get involved and take action. 

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