© 2015 Connecting: Solo Travel Network & Diane Redfern. Information.

Connecting Globally With Kiva

By Diane Redfern

Updated August 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 – June 2015 to July 2015

>> Huda at her restaurant in PalestineHuda is a 29-year-old married woman from a small village near Jinan City, Palestine. She lives with her family in a simple house. Two years ago, Huda started her own restaurant business, making sandwiches and selling soft drinks. This is the only source of income for her family. Huda needs a loan to help her buy a new machine for making falafel. This upgrade, she anticipates, will increase sales revenue and add to her personal income.

CSTN portion: $100.

>> Manuel de Jesús grows coffee in HondurasManuel de Jesús is a 55-year-old coffee grower living in Coquín, Honduras with his wife, Ada, and three children. He has been producing coffee for 35 years, and now he wants to convert his plantation to organic production. He needs a loan to carry the costs of certification and replanting. Eventually, he expects this change will increase his income, thus enabling him to give his children a good education, and begin creating a small family estate.
CSTN portion: $100.

>> Ima Emoinu Group Memee is a member of the Ima Emoinu Group. She is married and is a mother of 2 children. She runs a mat-making business in the Thoubal district of Manipur India. Memee wants her children to have access to good education, but that objective will take more savings than she is able to manage with current income. With a loan to invest in her business, she is confident that she will double her income and thereby realize her ambitions for her children. Others group members will use their share of the loan to purchase raw materials for their own mat-making businesses.
CSTN portion: $100.

>>  Nisso lives in Dushanbe, Tajikistan. She is 56 years old, married and is the mother of one married son. A talented and experienced seamstress, Nisso runs a dressmaking business from her home, mainly sewing national women's clothing. She has been doing this work for over two and a half years and really loves it, especially seeing the finished result of her labor and the delighted faces of her customers when they try on the dresses. Unfortunately, Nisso's sewing machine is no longer useful, so she wants a loan to buy a new machine.

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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