Lending hope over the Web

Hartford Courant

Gabriela Villegas scrolled through the online profiles, searching for a photo and description that appealed to her.

She wasn’t surfing for a date or networking for new friends. She was on the Kiva website, reading through stories of impoverished entrepreneurs in developing countries, trying to decide to which venture she would extend a $25 business loan.

“Twenty-five dollars -- that’s probably how much I spend on just one meal,” said Villegas, 25, of Manchester, Conn. “But with that same money, I was able to change someone’s life.”


Kiva, at, is a nonprofit based in San Francisco. It has not yet celebrated its two-year anniversary but is already attracting international attention for its unique mission -- blending the principles of micro-financing with the power of online social networking to deliver business loans to the world’s working poor.

Named after the Swahili word for “unity,” Kiva is getting big-name nods from the likes of Oprah Winfrey and former President Clinton. And with more than $13 million lent to 1,800 ventures, it’s being held as an example of a savvy brand of online activism.

“People are by nature generous and want to help others, but they want to do it in a way . . . where they can really see how they’re making an impact on somebody’s life,” said Kiva spokeswoman Fiona Ramsey. “We all see [the philanthropic work that] Bill Gates and Oprah do, and we’d all love to do that ourselves. But few of us can afford to.”

Enter Kiva, making a micro-lender of anyone with $25 and an e-mail address.

Here’s how it works. The organization partners with 66 nonprofit micro-finance institutions that vet loan applicants in 38 countries. Once they get clearance, the borrowers post their pictures and needs on the Kiva website, where would-be lenders can pore through the 70-or-so listings posted at any given time -- a motor-taxi service in Asia, a goat farmer in Africa, a seamstress in Iraq. An average loan request is $650, and lenders can choose how much to fund.

As borrowers repay their loans, they send online progress reports so lenders can see how their money is working. Once the loan is repaid -- and most are, with a default rate of just 0.3% -- lenders can collect their money or lend it to another entrepreneur. Most lenders choose the latter, Ramsey said.

Villegas imagines she will too. For now, she enjoys seeing the progress reports of the borrower she selected: Maria Martinez of Mexico. To supplement her husband’s income and fund her daughter’s education, Martinez began cooking and selling food from her home three years ago. The business has expanded, and she requested a $950 loan to buy a stove and other supplies.


One of 37 lenders to the venture, Villegas was drawn to the story that reminded her of her own mother’s. A single parent raising three children in New York, Villegas’ mother worked in a clothing factory and a supermarket and had sold food as well.

“I remember she used to leave before I went to school and come back at 7 at night,” Villegas said. “Growing up I didn’t realize what an effort she was making. And she never complained. She wanted us to focus on our studies.”

They did, and now Villegas, a Boston University graduate, is an engineer at aircraft engine maker Pratt & Whitney. She and her siblings have since bought their mother a house in Seattle, where she’s enjoying retirement.

“I would never have been able to be where I am if it wasn’t for my mother’s hard work,” Villegas said. “I wanted to be able to help someone provide the same things for their children.”

That’s why the model works so well, Kiva says; it gives average people like Villegas a tangible way to help.

“Famine and drought and disease -- if you’ve never experienced that yourself, it’s really hard to relate to and really hard to know how to help,” said Ramsey, who works at Kiva with her husband, Jeremy Frazao. “But if someone says they need $25 so they can buy eggs to hatch chickens -- everyone can relate to needing to borrow money.”

Kiva was founded in 2005 by then-newlyweds Matt and Jessica Flannery. He was a former TiVo engineer, and she had been inspired by Nobel Peace Prize winner Muhammad Yunus and traveled to Africa to work with a micro-finance institution. With its 16-person organization getting by largely on donations and the power of 150 volunteers, Kiva can only hope to eventually offer interest on loans.

“Right now, we can’t offer a financial return on your investment,” Ramsey said, “but we can offer you an emotional return.”





San Francisco website, at, matches entrepreneurs with those who want to lend $25 and up to micro-businesses.

How it works

Kiva partners with 66 nonprofit institutions that vet loan applicants in 38 countries. Borrowers post their pictures and needs on the site and would-be lenders choose how much they want to fund. The average loan request is $650.

Track record

Since 2005, more than $13 million has been lent to 1,800 ventures. The default rate is 0.3%.

Source: Kiva