How does Kiva work?
Kiva collects microloans from individuals and organizations and distributes them via field partners to entrepreneurs in developing countries. Some field partners offer training or other support to the entrepreneurs. Loan repayment and other updates are posted on Kiva and emailed to lenders who wish to receive them. It is important to note that while neither lenders or Kiva receive interest payments on the loans, Kiva’s field partners are middlemen who often charge interest to the loan recipients, sometimes at high rates, but usually better than the prevailing rates entrepreneurs would be able to get elsewhere. (Kiva loans are generally a safer loan option, as the entrepreneurs other options are local loan sharks who sometimes use violence or other methods of retrieving their loan).
