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Give a man a fish, feed him for a day. Teach a man to fish, feed him for a lifetime

What if he knows how to fish but can’tafford a fishing net?

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Problem Statement & Solution: Hand up, not a hand out

Supplies for a store

Seed for crops

Tools for carpentry

Cloth for weaving

Materials for making products

Millions of people around the world could help themselves if they just had access to money for starting or expanding their small business

Whether they need tools, seed, fertilizer, cloth, store supplies, it just takes that first step, that start-up capital, to give them a chance to be truly self-sufficient

However they cannot apply for a loan from a bank, credit company or credit co-operative because banks typically do not serve the poor

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Introduction to Microfinance

The poor are typically excluded by financial service providers:

•No collateral•No credit history •Illiteracy•Transaction costs

The poor need financial services, and already use them informally:

• Borrowing money from loan sharks with interest rates so high that it may be impossible to ever pay back• Savings accounts kept in the home, vulnerable to theft• Investing in livestock which is vulnerable to disease• Other communal methods (ASCAs, ROSCAs)

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JanuaryAugustJanuary

Illness

Reaping investments

Smoothing Income

Saying that someone lives on $2 a day is missing half of it

Sometimes they live on more and Some days on less

Microfinance is providing financial services to copeThrough a microfinance institution: MFI

$3

$2

$1

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Microfinance Institutions

• Some focus on women in places where women don’t have the same rights as men and so have no economic empowerment

• Some focus on the rural population in areas where people are isolated and cannot travel to cities to access services

• Some focus on a comprehensive program which includes business training with financial products

• Some focus on women in places where women don’t have the same rights as men and so have no economic empowerment

• Some focus on the rural population in areas where people are isolated and cannot travel to cities to access services

• Some focus on a comprehensive program which includes business training with financial products

There are thousands of microfinance institutions around the world, and they all vary a little depending on the

region they are in and people they are targeting to help

What ties them all together, however, is a desire to help the poor by providing them with financial services

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Sierra’s MFIs: PRISMA

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Sierra’s MFIs: EMPRENDER

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The Traditional Microfinance Lending Process

Microfinance Institutions

Microfinance Institutions

EntrepreneursEntrepreneurs

Banks and NGOs

Banks and NGOs

• Microfinance institutions typically get the money that they lend, from banks or non-governmental organizations, or both

• This can be expensive, as it is often borrowed with interest

• There may also be difficult application procedures to access debt capital from non-governmental organizations

• Some organizations can even find themselves shut out due to the region they operate in, particularly post-conflict regions

• Restrictions that microfinance institutions face ultimately affect the entrepreneurs, who rely on microfinance institutions to serve them

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The Kiva Microfinance Lending Process

Microfinance Institutions

Microfinance Institutions

EntrepreneursEntrepreneurs

You!You!

With Kiva, you can be micro-lender

You can act as a banker and provide the funds to microfinance institutions that they then lend to entrepreneurs

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www.kiva.org

• Kiva.org is a website which allows you to lend to an entrepreneur who needs a loan

• Through Kiva, you loan as little as $25 to an entrepreneur at 0% interest

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www.kiva.org

• The Kiva website lists loan requests which you can browse, just like browsing items on eBay or another website

• Loan requests are often funded within minutes by Kiva’s active lender base, and new loans are always coming on the site

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www.kiva.org

Each loan request has a business page which gives you more information about the loan…

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www.kiva.org

Size of the loan and status

Size of the loan and status

Summary of the business and loan, including

when it is expected to be

paid back

Summary of the business and loan, including

when it is expected to be

paid back

Information on the microfinance institution which is managing the

loan on the ground

Information on the microfinance institution which is managing the

loan on the ground

Picture of the entrepreneurPicture of the entrepreneur

Description of the business and

what the loan will be used for

Description of the business and

what the loan will be used for

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Translation Volunteers

Over 400 Volunteers

Handle around 8,000 loansa month

Kiva has French, SpanishRussian, Portuguese, Indonesian, Mongolian and Vietnamese translators!

Volunteers working together at a December 2009 marathon to prepare for holiday traffic to Kiva.org

To get all these loans online, Kiva has:

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www.kiva.org

The business page also shows you all of the

other people around the world who are

contributing to this loan

The business page also shows you all of the

other people around the world who are

contributing to this loan

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Kiva’s Microfinance Partners

NicaraguaHonduras

Togo

Senegal

Bulgaria

Gaza

Uganda

Kenya

Tanzania

Cambodia

Samoa

Mexico

Ecuador Nigeria

Ghana

Moldova

Mozambique

Ukraine

Afghanistan

Congo

Indonesia

Azerbaijan

Cameroon

Tajikistan

Bolivia

Haiti

Dominican Republic

Vietnam

Iraq

Kiva has lent over 129 million dollars in loans through 111 Microfinance Partners in 52 countries and is still growing

Paraguay

Pakistan

Peru

Mali

New YorkSan Francisco

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What Kinds of Businesses: Food

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Food Cont…

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Repair Shops

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General Stores

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EVERY BUSINESS !!

Taxi

Jewelry

Butcher

ChildcareGym

Furniture

SeamstressClothing

Restaurant

Farmer

Flowers

Cobler

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And Non Businesses…

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Does it help?

Theory behind investment What we actually see

Yes, it helps, but its not a silver bullet.

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Doesn’t always help: Doña Carmen

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But most of the time, it does help: Doña Justina

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Doña Alba

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Don Lorenzo

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Doña Bertha

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•Savings•Insurance

•Health•Life•Property•Disaster

•Financing Products•Technology

Future of Microfinance

Sierra Vishersvisher@gmail.com

www.kiva.org

Loans that Change Lives