Best for both worlds

Kate Power
Amanda Gallagher
Executive editors
magazine@smcvt.edu

It takes more than $100,000 to put on P-Day, while as little as $25 is all it takes to jump start a business in Africa .

Kiva.org is a micro-lending Web site launched by a volunteer group in 2004. The organization allows people to “connect and loan money to small businesses in the developing world” via the Web. Citizens of countries where bank loans aren’t an option can use the money to start or expand their businesses. While many people ask for more than $25, several lenders can help the same person, decreasing the amount of financial responsibility for the lender.

The unique thing about Kiva is instead of simply making a donation; you sponsor a business which helps to give the loan recipient more economic independence. The organization also focuses on lending money to women. Their target market is very much different then typical banks would be, helping to alleviate some of the gender imbalances in those countries. The loans, which typically last between six and 12 months, are followed up with e-mailed journal updates about the business is changing and growing.

The senior editors of the Echo staff next semester decided to loan $25 to a seamstress, Asha Salum, in Dar es Salaam, Tanzania. Salum is married with two children and owns her own business making and selling pillows. Her company has been in business for three years. The loan money will be used to help fill a large order she recently received. Currently, she has only enough supplies to fill 10 percent.

Salum is just one of the many people on the site hoping to receive assistance.

The organization guarantees that 100 percent of the money will be given to the borrower and according to the Web site and, to date, 100 percent of all the loan money that was due to be returned, has been.

It is an interesting comparison to think that in the U.S. it would take at least $5,000 to start a business.

“It [the cost of starting a business] depends on a lot of things,” Heather Gonyaw of the Small Business development center in Randolph , Vt. says. “To get a trade license could cost at least $40 and a couple $1,000 in rent itself.”

While Gonyaw was wary to site the exact amount of money that it would cost to start a small business in Burlington , Vt. she says that it would be over $5,000 and in many cases over $10,000.

Kiva recipients typically ask to borrow between $500 and $1000 and that’s a far cry from the $10,000 needed in the United States .

There is such an immense discrepancy between the economies of developed countries and those in the third world, and this difference is highlighted by Kiva. Why can’t we, as relatively affluent Americans, donate a fairly inconsequential sum of money that improves the quality of someone’s life on not only the private, but economic level as well?

So much focus is given to charity and people always question the notion of “handouts,” and Kiva seems to be the best of both worlds. People can give as little as $25 and change someone’s life- and within a year they will have their money back.

The best for both worlds.