© 2013 Connecting: Solo Travel Network & Diane Redfern. Information.

Connecting Globally With Kiva

By Diane Redfern

Updated April 2013: 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. Some, CSTN has investigated and, in the past, has 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 – February, March 2013

>>Agabala in Agsu Azerbaijan Agabala is a 53-year-old man living in Agsu Azerbaijan with his wife and three children. About 10 years ago, he lost his job and, being far from pension age, he started a vending business in the local market, selling spare parts and different motor oils. So far, this has been a successful venture, and now he wants a loan to increase his inventory.

CSTN portion: $100.

>>Alik in Botinshesko Ukraine Alik lives in Botinshesko Ukraine where he cultivates watermelons, cantaloupes, tomatoes, and cucumbers with help from his wife and two children. Alik started using drip tape for irrigation and he needs a loan to purchase more drip tape. In the future he expects to increase his growing fields, and he hopes to buy a tractor with special attachment for plowing. He also has a dream to someday finish building his house.
CSTN portion: $100.

>> Malikekhan lives in Kazylkiya Kyrgyzstan. She is unmarried but is supporting two children on her own. Seeking a way to ensure a decent future for them, she began selling clothes at the market about 10 years ago. By all accounts she has established herself as enterprising, responsible, and hardworking. Ever optimistic and cheerful, Malikekhan has a life motto: "Don't look back only look forward." She needs a loan to increase her assortment of clothes.
CSTN portion: $100.

>> Gulnoza is 25 years old, married but does not have any children. Her sister is getting married, but their parents do not have money for holding a wedding celebration. They need Gulnoza's help. She has worked at a flour mill for more than three years and earns enough for her keep, and she thinks she could manage to repay a small loan of $325, which would cover the cost of a wedding party.

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.

>>DR

Visit Kiva online.
Comment on this project
Member Index
Top