Tue Oct 25th, 2005 at 07:10:02 AM EST
Via The Sharpener comes this story about an interesting microcredit set-up.
A new twist on this idea is Kiva, the world’s first peer-to-peer, distributed microloan website, set up by Jessica and Matthew Flannery.
Kiva’s first country of focus is Uganda, where the Internet is available even in poor rural areas. Lenders may loan money through kiva.org, which lists businesses in need of funding and provides background on the entrepreneur starting the enterprise. Individuals may makes loans in increments as small as $25, and can expect to receive repayment, without interest, at the end of the loan term, which typically runs between six and 12 months. Since Kiva’s source of capital is charitably-minded individuals, it is able to provide more flexible loan terms than traditional financial institutions.
To date Kiva has funded 13 small enterprises in Uganda, including a livestock business, a medicine shop, several produce businesses, a fish monger and a clothing reseller. Two of the entrepreneurs have already repaid their loans in full. The enterprises Kiva is working with are asking for loans averaging $500, and the average lender is loaning between $25 and $100.