If you live a first world country, you are probably taking advantage of built-in financial systems. These systems include bank accounts, savings accounts, insurance, and most importantly, the ability to take out a loan. While debt is generally seen as a bad thing, in some cases taking on a debt is the best option for bettering your life.

For example, think about buying a car. Most people in the US do not have the money to buy a car outright. The average car, in good condition, is between $18-25 thousand dollars. That is a lot of money to have sitting in a bank account. This the reason most people take out an automobile loan. Instead of having to save for years and years to purchase a car all at once, you can take out a loan which you pay on each month, with a little bit of interest. This is an important service to have access to. Think about what might happen if a poor family could not take out a loan for a car. They might not be able to get to their job, so they would soon be unemployed, so they won’t be able to save for a car at all. Kids might not be able to get to school, so they won’t be well-educated, which means they will have a harder time finding employment when they are older too. It’s a cycle that continues to create poverty. Loans, when taken judiciously, have the power to pull people out of poverty and into a better life.

This is what Kiva.Org (on Wikipedia) provides for people in poverty all across the world. In many third or second world countries, people in poverty have no access to loans or any other kind of financial system. If they want to start a small business, or if they encounter a hardship, they have nowhere to turn for assistance. Kiva works to be that assistance.

How it Works

Kiva connects everyday people who want to get involved (lenders) with people who need loans (borrowers). Money that lenders provide through Kiva is then given to Field Partners, who work at a local level with borrowers. The borrowers then use the loan to finance a business, which helps them to move up in life and find sustainable support for their families. Because their businesses will be improved by the loans, their income is increased and they pay back the loans. Eventually, lenders will be given their loan amount back. From there, lenders may choose to loan to another borrower, or they can simply withdraw it back into their personal accounts.

What are Field Partners?

Field Partners are microfinance institutions that work at a local level with borrowers. For example, if there is a borrower in Argentina, Kiva will work with the Field Partner they have vetted there to make sure the borrower is given the loan. Kiva works hard to make sure every Field Partner they work with is as committed to ending poverty as they are. Field Partners must submit thorough applications and go through a series of extensive due diligence screening and monitoring.

Who is getting my loan?

One of the best things about Kiva is you get to choose which borrower’s loan will be backed by your lending. On Kiva.Org you can browse through all the borrowers looking for assistance. You can read their stories, see where they live, and find out how they plan to use the loan to better their situation. Lending on Kiva is personal. You can be confident that your money is going to a real person who needs real help.

Other Information

It’s important to know that Kiva is a non-profit organization that does not charge interest to their Field Partners. Kiva also promises that 100% of your lent money will go towards backing the loans. They do not take a cut. Kiva is dedicated to fighting poverty and making sure people in remote areas have access to capital, so they can create opportunities for themselves. Kiva is also rated 5 out of 5 stars on charitynavigator.org, so you know you can trust them. If you are interested in helping those less fortune become more self reliant and better able to create stable, profitable futures for themselves and their families, Kiva might be a great place to let your money to do some real good.