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Kiva and mf 20100405

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    Kiva and mf 20100405 Kiva and mf 20100405 Presentation Transcript

    •  
    • Give a man a fish, feed him for a day. Teach a man to fish, feed him for a lifetime What if he knows how to fish but can’t afford a fishing net?
    • Problem Statement & Solution: Hand up, not a hand out Supplies for a store Seed for crops Tools for carpentry Cloth for weaving Materials for making products Millions of people around the world could help themselves if they just had access to money for starting or expanding their small business Whether they need tools, seed, fertilizer, cloth, store supplies, it just takes that first step, that start-up capital, to give them a chance to be truly self-sufficient However they cannot apply for a loan from a bank, credit company or credit co-operative because banks typically do not serve the poor
    • Introduction to Microfinance
      • The poor are typically excluded by
      • financial service providers:
          • No collateral
          • No credit history
          • Illiteracy
          • Transaction costs
      • The poor need financial services, and already
      • use them informally:
          • Borrowing money from loan sharks with
          • interest rates so high that it may be impossible
          • to ever pay back
          • Savings accounts kept in the home, vulnerable
          • to theft
          • Investing in livestock which is vulnerable to disease
          • Other communal methods (ASCAs, ROSCAs)
    • Smoothing Income January August January Illness Reaping investments Saying that someone lives on $2 a day is missing half of it Sometimes they live on more and Some days on less Microfinance is providing financial services to cope Through a microfinance institution: MFI $3 $2 $1
    • Microfinance Institutions
      • Some focus on women in places where women don’t have the same rights as men and so have no economic empowerment
      • Some focus on the rural population in areas where people are isolated and cannot travel to cities to access services
      • Some focus on a comprehensive program which includes business training with financial products
      There are thousands of microfinance institutions around the world, and they all vary a little depending on the region they are in and people they are targeting to help What ties them all together, however, is a desire to help the poor by providing them with financial services
    • Sierra’s MFIs: PRISMA
    • Sierra’s MFIs: EMPRENDER
    • The Traditional Microfinance Lending Process Banks and NGOs
      • Microfinance institutions typically get the money that they lend, from banks or non-governmental organizations, or both
      • This can be expensive , as it is often borrowed with interest
      • There may also be difficult application procedures to access debt capital from non-governmental organizations
      • Some organizations can even find themselves shut out due to the region they operate in, particularly post-conflict regions
      • Restrictions that microfinance institutions face ultimately affect the entrepreneurs, who rely on microfinance institutions to serve them
      Microfinance Institutions Entrepreneurs
    • The Kiva Microfinance Lending Process With Kiva, you can be micro-lender You can act as a banker and provide the funds to microfinance institutions that they then lend to entrepreneurs Microfinance Institutions Entrepreneurs You!
    • www.kiva.org
      • Kiva.org is a website which allows you to lend to an entrepreneur who needs a loan
      • Through Kiva, you loan as little as $25 to an entrepreneur at 0% interest
    • www.kiva.org
      • The Kiva website lists loan requests which you can browse , just like browsing items on eBay or another website
      • Loan requests are often funded within minutes by Kiva’s active lender base, and new loans are always coming on the site
    • www.kiva.org Each loan request has a business page which gives you more information about the loan …
    • www.kiva.org Size of the loan and status Summary of the business and loan, including when it is expected to be paid back Information on the microfinance institution which is managing the loan on the ground Picture of the entrepreneur Description of the business and what the loan will be used for
    • Translation Volunteers Over 400 Volunteers Handle around 8,000 loans a month Kiva has French, Spanish Russian, Portuguese, Indonesian, Mongolian and Vietnamese translators! Volunteers working together at a December 2009 marathon to prepare for holiday traffic to Kiva.org To get all these loans online, Kiva has:
    • www.kiva.org The business page also shows you all of the other people around the world who are contributing to this loan
    • Kiva’s Microfinance Partners Nicaragua Honduras Togo Senegal Bulgaria Gaza Uganda Kenya Tanzania Cambodia Samoa Mexico Ecuador Nigeria Ghana Moldova Mozambique Ukraine Afghanistan Congo Indonesia Azerbaijan Cameroon Tajikistan Bolivia Haiti Dominican Republic Vietnam Iraq Kiva has lent over 129 million dollars in loans through 111 Microfinance Partners in 52 countries and is still growing Paraguay Pakistan Peru Mali New York San Francisco
    • What Kinds of Businesses: Food
    • Food Cont…
    • Repair Shops
    • General Stores
    • EVERY BUSINESS !! Taxi Jewelry Butcher Childcare Gym Furniture Seamstress Clothing Restaurant Farmer Flowers Cobler
    • And Non Businesses…
    • Does it help?
      • Theory behind investment
      • What we actually see
      Yes, it helps, but its not a silver bullet.
    • Doesn’t always help: Doña Carmen
    • But most of the time, it does help: Doña Justina
    • Doña Alba
    • Don Lorenzo
    • Doña Bertha
      • Savings
      • Insurance
        • Health
        • Life
        • Property
        • Disaster
      • Financing Products
      • Technology
      Future of Microfinance
    • Sierra Visher [email_address] www.kiva.org Loans that Change Lives