Since its inception, non-profit Kiva.org has overseen nearly $65 million of interest-free micro loans to developing-world entrepreneurs and, now, the company plans to bring its unique form of charity to the U.S.
The organization allows users to pledge interest-free loans to entrepreneurs who solicit funding on the site (and, prior to being allowed to solicit funding, the entrepreneurs are vetted by Kiva’s microfinance institution partners). Default rates are low—2 percent total—and users can lend a minimum of $25 to any single person. Spreading loans in this way lessens a lender's exposure to risk, and gives more people an opportunity to put money into the system. plan to bring Kiva to the U.S. in the next few months.
Now, Kiva owners are signing microfinance partners in the Bay Area and in the Northeast, and are targeting the 30 million Americans who don't have bank accounts and the 18 million "micro-enterprises" that often rely on high-interest loans or payday advances to buy supplies. The rules for the U.S. will be slightly different once the partners sign on, in that an American entrepreneur will be able to seek as much as $10,000 (versus just $1,200 in the developing world).
Source:
CNNMoney: Micro-Loans For Americans?
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