Does Kiva(micro finance company) actually work?
Kiva, a nonprofit microfinance company situated under the website “www.kiva.org”, functions as an intermediate body between a large global infrastructered network of microfinance institutions. Ideally, Kiva provides small loans towards entrepreneurs in developing countries worldwide. Kiva works on a sustainable peer-to-peer microcredit model marketplace that provides loans to borrowers who need it most in order to allow them a better chance of creating a better life. These loans given out are paid back under the assumption that the borrower will repay the loan under “goodwill and faith”. This can be seen as the primary agenda and aim for the company Kiva.
While riding the waves of online social media and news, Kiva has successfully managed to become one of the fastest-growing nonprofits in history. However, a company of such stature is never free from the ever-growing controversies that inevitably follow. The first controversy to highlight is the Kiva’s infamous but subtle misleading marketing campaign (Goodintents.org 2009). Kiva advertises that the users make loans to specific borrowers through a peer-to-peer microcredit marketplace. The reality of this is that it actually makes loans towards microfinance institutions, which actually makes and administers the loans. This could possibly imply that the borrowers have already received their money through these institutions before their loan has even reached the website painting a false image that the users are donating to the borrowers directly (Harvard Business Review 2009). Furthermore, the users are as well not tied directly to repayments made by the specific borrowers.
There is to a certain level of agreeability that micro loans towards small business help developing nations. However, microfinance is not the ultimate answer. There is only to a certain level of acceptance of the ideal that majority of economic issues in developing countries can be solved by micro loans (Cgdev.org 2009). Again, these loans
While riding the waves of online social media and news, Kiva has successfully managed to become one of the fastest-growing nonprofits in history. However, a company of such stature is never free from the ever-growing controversies that inevitably follow. The first controversy to highlight is the Kiva’s infamous but subtle misleading marketing campaign (Goodintents.org 2009). Kiva advertises that the users make loans to specific borrowers through a peer-to-peer microcredit marketplace. The reality of this is that it actually makes loans towards microfinance institutions, which actually makes and administers the loans. This could possibly imply that the borrowers have already received their money through these institutions before their loan has even reached the website painting a false image that the users are donating to the borrowers directly (Harvard Business Review 2009). Furthermore, the users are as well not tied directly to repayments made by the specific borrowers.
There is to a certain level of agreeability that micro loans towards small business help developing nations. However, microfinance is not the ultimate answer. There is only to a certain level of acceptance of the ideal that majority of economic issues in developing countries can be solved by micro loans (Cgdev.org 2009). Again, these loans
References: -Cgdev.org. 2009. Kiva Is Not Quite What It Seems | Center For Global Development. [online] Available at: http://www.cgdev.org/blog/kiva-not-quite-what-it-seems [Accessed: 19 Aug 2013]. -Goodintents.org. 2009. Deceptive advertising hurts the entire aid industry | Good Intentions Are Not Enough. [online] Available at: http://goodintents.org/choosing-a-charity/deceptive-advertising [Accessed: 19 Aug 2013]. -Harvard Business Review. 2009. Kiva: A Cautionary Tale for Social Entrepreneurs?. [online] Available at: http://blogs.hbr.org/cs/2009/10/kivaorg_role_model_or_cautiona.html [Accessed: 19 Aug 2013]. -Kiva. 2005. Kiva - Loans that change lives. [online] Available at: http://www.kiva.org/ [Accessed: 19 Aug 2013]. -Nytimes.com. 2013. Confusion on Where Money Lent via Kiva Goes. [online] Available at: http://www.nytimes.com/2009/11/09/business/global/09kiva.html?_r=0 [Accessed: 19 Aug 2013]. -Ssireview.org. 2009. The Profit in Nonprofit (SSIR). [online] Available at: http://www.ssireview.org/articles/entry/the_profit_in_nonprofit [Accessed: 19 Aug 2013].