, marriage, death Connecting Globally With Kiva
© 2014 Connecting: Solo Travel Network & Diane Redfern. Information.

Connecting Globally With Kiva

By Diane Redfern

Updated February 2015: Latest Recipients | Loan Status | About Interest Rates

The Power of One to One

CSTN has always been about helping individuals fulfill their solo travel dreams. After twenty years of connecting internationally with the global tourism industry and with other solo travelers, I, as CSTN founder, began thinking of such singular journeys in a less self-centered way.

Doubtless, there are few travelers – solo or otherwise – who have not been dismayed to see sights of extreme poverty and need in many places we visit. Thankful for our blessings, we've wished to do something to help ease such abject circumstances. But what? There are, of course, dozens if not hundreds of charitable organizations whose aim is to do good in developing countries. CSTN has investigated some of these charities and, in the past, raised funds for a few, but only in a sporadic way.

In 2008, I began searching for an organization that would provide a compatible and ongoing way of adding philanthropy to the CSTN mandate. Finding Kiva was my first introduction to the concept of micro-financing.

What is Kiva?

Kiva is about inspiring and empowering individual dreamers one by one. Through a system of small, person-to-person loans, people who otherwise have no hope of getting credit, have an opportunity to lift themselves out of poverty and fulfill their personal dreams. Individuals helping individuals help themselves – a perfect fit for CSTN.

Since April 2008 CSTN has been lending 50 per cent of every registration fee to individual entrepreneurs via Kiva. A report on funding is regularly updated as follows:

New Loan Recipients – October 2014 to January 2015

>> Diego in Suchitepéquez, GuatemalaDiego (first left in photo) is a member of the Grupo Pochol located in Suchitepéquez Guatemala. He is 44 years old and single, but he helps support five children in his family. He earns income by producing bananas and selling them locally. He will use the loan to maintain his banana plants to first quality standards. He wants to grow more banana plants so as to increase production and income so that the children may become educated professionals. He also wants to build houses for his family and improve their living conditions.
CSTN portion: $100.

>> Sarwiti lives in IndonesiaSarwiti is 30 years old and married with one child. She lives with her husband and her daughter in Tangerang Indonesia. For over eight years she has sold food and rice in the morning to increase the family income. She wants a loan to buy and build a bathroom and septic tank at their home and thereby improve access to water and sanitation for the family.

CSTN portion: $100.

>> Bisan in Palestine Bisan is a 19-year-old, single woman from Jabalia, Gaza, Palestine. She lives with her family and studies elementary education at the university. A loan will help her to buy a new laptop, which will assist her with homework and extra-curricular studies. She would like to complete her education, find a job as a teacher and help cover family expenses.

CSTN portion: $100.

>> Maria Bellanire San Lorenzo, EcuadorMaria Bellanire is a member of the Bendicion de Dios Group in San Lorenzo, Ecuador. Aged 34 with two school-aged daughters, she is a hard-working single mother employed as a cook in a nursery and, in her free time, she has a small business selling sheets, towels, blinds, and curtains for home decoration. She hopes to see her business more organized with a showcase so that she can display her merchandise without having to offer her products outside where she is exposed to the danger of being a victim of assaults.
CSTN portion: $100.

Loans and Payments to Date

Interest Rates and Sustainability – It's Just Business

Excerpts from field report by Kiva Fellow, Meg Gray, working in Nicaragua with Kiva field partner CEPRODEL

In Nicaragua every road has character, and usually this "character" makes it hard to get to CEPRODEL's clients. Now, besides being an inconvenience, why does this matter? It matters because bad roads are one of the factors that contribute to high operating costs for a micro-finance institution (MFI). Here are several more reasons [why CEPRODEL charges 36% interest].

Usury or Necessary

Populations are often very spread out. Even with centrally located offices, many clients have no way of visiting the branch and thus [loan officers must travel to individual clients].

The administrative cost [time, manpower, and paperwork] of a loan is fixed no matter how small it is.

Frequent repayments (often daily or weekly) are more labor intensive. Many CEPRODEL loan officers spend every afternoon walking or driving from business to business collecting repayments.

Now, how are MFIs supposed to pay for all of this? Yes, they could keep seeking out grant money year after year, but I, for one, would like them to be sustainable. The only way to do that is to charge enough interest to cover operating costs.

While rates may seem ridiculously high, as long as we have loan officers needing to drive 30 kilometers through the mud on a motorcycle to spend an hour (or more), all for a loan of $250, then yes interest rates are going to seem high. But financial services will also be reaching people who have never had these opportunities before.

Diane: At first, I was rather alarmed to find that interest charged to recipients seemed excessively high, but the above explanation puts things in perspective. Interest and fees do vary considerably between field partners, and Kiva lets lenders (like us) check the fundamentals of all field partners. Those checks include interest and fee comparison charts, as well as profit margin declarations. Incidentally, just to be clear, we lenders invest the capital but do not receive interest on return. And Kiva operates solely on voluntary donations.


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