For those of you that have never heard of Kiva.org, it is a:
“non-profit organization with a mission to connect people through lending to alleviate poverty. Leveraging the internet and a worldwide network of microfinance institutions, Kiva lets individuals lend as little as $25 to help create opportunity around the world.”
The way Kiva works is quite simple:
- Sign up for Kiva
- Make a loan or multiple loans (usually in increments of $25) to those in need around the world
- Kiva helps distribute it to those borrowers
- The loan gets repaid over time to you in your Kiva account.
- You can then relend the money or withdraw it to your Paypal account.
The beauty of this process is that the loans you make can be made using your miles or points earning credit card which is processed by Paypal. I am guessing that Paypal doesn’t charge processing fees to Kiva since it’s a nonprofit organization. Every month, you will receive partial repayment of your loans, which you can then withdraw to your Paypal account, and repeat the process again earning more miles or points.
According to the Kiva website, “lending through Kiva involves risk of principal loss. Kiva does not guarantee repayment nor do we offer a financial return on your loan”. However, the site also states that the repayment rate is 99%, which is amazing!
So, what it comes down to is how much you want to loan out every month, knowing that you will eventually get paid back. The more money you lend, the more miles you earn, the more positive impact you make on the world. To me, this sounds like a winning combination for mileage addicts and striving entrepreneurs in third world countries.
For obvious reasons, only loan money than you can afford to pay back to your credit card company when the monthly bill arrives. I usually lend money every month and have had an excellent experience so far.
I first learned about Kiva.org from Deals We Like.
Have you used Kiva? How has your experience been?