Wednesday, October 26, 2005

Kiva offers charitable micro-loans to small businesses in developing world.

Seth Godin reports on Kiva, a service connecting private lenders and enterprises in need of micro-loans, mostly in Uganda (for the moment). The site is the brainchild of Matthew (entrepreneur) and Jessica Flannery (MBA student). You can loan anything from $25 onwards and you will get it repaid by instalment over a period of time. Kiva gets its revenue from donation and keeping interests from loans, if and when interests are charged. See current businesses looking for loan.

The Grameen bank had a similar initiative in the late 90s and is still considered as the largest micro-credit organisation (besides the World Bank). Loan repayment rate is very high (apparently close to 95%). Interests rate charged on micro-credit could reach 20%.

More about micro-finance from the UN.

No comments: