Lucinda Alonzo has used loans from Kiva to start a fishing business in the Philippines.

“There’s no line of demarcation between us and the world,” Professor Joseph E. Windham said in his introduction to a video presentation from the founder of Kiva, an international aid organization. Members of Northern Virginia Community College and Phi Theta Kappa gathered on a Saturday afternoon to learn about the impact of microfinancing on developing countries, particularly through the organization Kiva.

Kiva connects the haves with the have-nots, enabling the privileged to lend to entrepreneurs who otherwise would not have access to capital. For instance a loan of $1,200 could enable an impoverished woman in Cambodia to buy the food needed to open a grocery store. Dozens of middle class lenders donate small amounts of money to form a loan for this entrepreneur. As the business starts to earn money the loan is repaid to the donors.

Kiva was founded in November 2005 by Jessica Jackley who says she was inspired by both economics and compassion. As a child in Sunday School, the words of Jesus stuck with her, “When you look out for the least of these, you do it for me.” But she didn’t just want to give a fish to the poor. She wanted to teach them how to fish. So with the inspiration of Nobel Prize winner Dr. Muhammad Yunus’ work on economics and microcredit, she started Kiva.

Besides empowering the poor, Kiva is at the forefront of a new type of organization. Kiva relies on buzzwords like crowdsourcing, open source, and Web 2.0, the ideas behind web sites like Wikipedia and YouTube. What this means is Kiva is people powered, not just with their monetary loans, but with people who donate their time to make Kiva operationally better.

Volunteers have created iPhone apps, desktop widgets and third-party web sites that integrate with Kiva. Volunteers also help to translate progress reports, saving Kiva the money of hiring translators.

The crowdsource ethos plugs into what Jackley founded Kiva for, to connect people. Donors don’t just invest money. They are personally invested. They choose which entrepreneurs to invest in based on the goals of that business, various disadvantages of the entrepreneur, such as being female in a male-dominated country or a person with an amputated limb. The entrepreneur provides regular reports, letting donors know how the business is doing.

After the film, Windham moderated a lively discussion in which students and faculty asked questions and discussed the film. One man wanted to know how Kiva prevents fraud, particularly a large group of con artists subverting the system. Another participant replied that all lending systems have fraud, as was just recently witnessed with the economic collapse of 2008.

However, Kiva is not without controversy. Its veneer of truly connecting people has come into question because of its loan practices. There are third-party organizations that actually distribute the money to borrowers. An entrepreneur will come to such an organization, which will approve the loan and then upload that person’s profile to the Kiva web site. In other words, the money that lenders give is actually going to a loan organization, not an individual. Kiva even admits as much on its web site saying they enable their partners “to do more of what they do.”

There were also questions on how this affects individuals, NOVA and the entire community. The obvious but unanswered solution was that if people know of a better way to empower the poor we should do so. Loaning to those in developing countries “rewards the pleasure centers” of the brain as one participant said, but many wanted to know how to help in their community. The group, as well as Jackley, seemed at loss for how to apply such a model in America. Participants seemed genuinely interested in helping the “least of these,” however discussions soon went to just donating money and goods to the various non-profit partners of the Tau Nau chapter of Phi Theta Kappa.

More information about Kiva can be found online at www.kiva.org.

By: Joshua Davis

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