Kiva.org Lends in America: How Do They Do It?

I was heartened to see Kiva.org’s new domestic program. The loans are slightly larger than most of their overseas lending opportunities, but still relatively small for traditional business lending. However, I couldn't help but wonder how they're able to do this when so many other P2P platforms have failed to lend domestically due to heavy SEC regulation.

What I’ve learned is that Kiva loans don’t pay interest to lenders, and aren’t securities, so as such, they don’t fall under the SEC umbrella. Additionally, as a micro lender, Kiva is a 501(c)3 nonprofit organization, the government with oversight authority is the Internal Revenue Service (IRS).

This means that interest-bearing Kiva accounts are still likely to be a long way off (if ever), but that the program should be sticking around for a while for borrowers, which is great news for micro lending enthusiasts.

The initial domestic roll-out happened in early June and included 45 American entrepreneurs seeking loans from $1,025 to $10,000.

Kiva’s field partners are Accion USA and OpportunityFund.org.

According to an online article in OnPhilanthropy.com, Kiva has provided $76 Million in loans to help small businesses worldwide

Jessica Ward is a freelance writer based in the Seattle area. She writes on peer to peer finance, family and more. Her freelance portfolio is available online at www.jessicaward.me.

President Obama Nominates ACCION Executive to U.S. Department of State

President Obama has nominated Maria Otero, the Chief Executive of ACCION International to be the undersecretary of global affairs at the US Department of State. She has announced via ACCION press release that she intends to accept the nomination, provided that her appointment is confirmed by the Senate’s Foreign Relations Committee.

Ms. Otero is a native of La Paz Bolivia and has been part of ACCION since 1986 and CEO since 2000. She was honored in 2005 in Newsweek’s special report “How Women Lead” and was regarded as one of the 20 most influential women in the United States. She received Hispanic Magazine’s “Latina Excellence Award” and has also been featured in the magazine.

Since 1997 Ms. Otero has been an adjunct professor at the Johns Hopkins School for Advanced International Studies (source: Leigh Bureau speakers bureau).

The position of Undersecretary of Global Affairs in the U.S. Department of State is responsible for U.S. foreign relations on a variety of issues including democracy, human rights, environment, health, population, trafficking in persons, influenza and women’s issues among other things.

Catherine Quense, the Chief Deputy at ACCION will assume Ms. Otero’s duties immediately while the board conducts a global search for a successor.

ACCION is an international private non profit organization with the mission of giving the poor the financial tools that they need to work out of poverty. They provide microloans, business training and other financial tools. ACCION has disbursed more than 28.5 million loans in the last ten years, which total $23.5 billion USD (Source, PR Newswire).

Jessica Ward is a freelance writer and blogger who covers frugality and the financial sectors. She is based in Seattle. For more information, visit her Web site at www.jessicaward.me or follow her on Twitter as @jessc098.

Where in the world is microfinance?

This is a summary/analysis of where US microfinance reaches. I'm profiling the organizations included below (in no particular order). I hope you find this as enlightening as I did. If you're aware of other organizations, let me know about them and I'll add them in.

• Opportunity.org - Offers microloans and services to 1.1 million working poor in 28 developing nations.
• Unitus.com - Unitus, an international nonprofit organization, works to reduce global poverty by increasing access to life-changing microfinance services.
• Globalpartnerships.org - Global Partnerships currently works with 21 organizations in Latin America.
• Villagebanking.org - FINCA International provides financial services to the world's lowest-income entrepreneurs in 21 countries so they can create jobs, build assets and improve their standard of living.
• Microplace.com - Owned by eBay since 2006, MicroPlace's mission is to help alleviate global poverty by enabling everyday people to make investments in the world's working poor.
• Endpoverty.org - Since 1985, Enterprise has equipped over 200,000 families all over the developing world to support themselves through their own entrepreneurial efforts.
• WholePlanet Foundation – A division of Whole Foods, provides microloans to microenterprises in ten countries. Unlike Kiva and others, it does not appear that lenders are able to choose the program or individual they would like to contribute to. Total authorized grants to partners as of October 2008 are nearly Eight Million Dollars US.
• KIVA.org – Kiva’s slogan is “loans that change lives” and is one of the leaders in the microlending community. The Kiva Web site allows loan funders to choose individual borrowers to fund, and Kiva estimates that by 2010 they will have facilitated $100 Million in microloans.
• WOKAI – Wokai, meaning “I go” in Chinese is an Oakland, CA startup and has provided just 43 loans in china, but is poised for growth—and has obtained substantial media in areas where its chapter membership is growing such as Seattle and San Francisco. Wokai reaches out to the Chinese-American community for help funding loans that recycle three times (to three different entrepreneurs) and is afterwards used for long-term lending by the lending partner in China.
• ACCION – Accion International is a long-term and global player in the microfinance world. They are active in 24 countries and the USA, and according to their Web site they have made $17.4 Billion in microloans. Their historical repayment rate is a stunning 97%.