Welcome to the newest installment of the Kiva Connection. In my first blog post last month, I wrote about our company-wide endeavor to make microloans to entrepreneurs in developing countries around the world through Kiva.org.
What's great about getting involved with microfinancing through Kiva is that their online model provides a level of visibility to the lenders -- anyone can go to the Website, see a picture of the entrepreneurs requesting loans, and read their story. And while I could simply post a link to our borrowers' profiles on Kiva.org, what I am trying to accomplish with this blog is to make our sponsored entrepreneurs -- whose day-to-day work lives can feel so distant from our own office-centric jobs -- a little more accessible.
To do this, I have connected with several Kiva-affiliated people, or fellows, who are on the ground working with Microfinance Institutions (MFIs) in countries where Mansueto Ventures has sponsored entrepreneurs. In effect, Kiva fellows are the bridge between the MFIs (that assess the businesses in need and disburse the loans) and the entrepreneurs themselves.
One of the things I have learned in corresponding with Kiva fellows across the globe is that the process of approving and disbursing loans for entrepreneurs is a laborious one. The surging popularity of Kiva has certainly allowed many microfinance institutions to thrive, however, most of these institutions still lack the resources to efficiently process the sheer volume of loans that are requested on a daily basis.
Because many MFIs are stretched thin, their staff does not always have time to write journal updates on every entrepreneur. But, Kiva lenders do receive brief progress e-mails once the loan has been disbursed to the entrepreneur, and any time that the borrower pays back a portion of the loan. Based on the e-mail updates I have received, all 7 of our loans have been disbursed to the entrepreneurs and four of the businesses have already made a repayment.
Here are some stats about the entrepreneurs we have loaned to:
--Three of the entrepreneurs are women who are running a business independently
--Two are males
--One business is operated by a married couple
--One of the loans is for a group of 5 women (more on group loans in a future post)
--The entrepreneurs are located in the following countries: Ecuador, Peru, Uganda, Tanzania, Cambodia, and Tajikistan
--Two of the businesses are in the home products sector, three are in retail, and two are in the food sector
As I await responses from Kiva fellows who are trying to visit some of our sponsored entrepreneurs, here is a preliminary introduction to a couple:
Meet Otilia Sanchez Lopez.
What initially attracted me to this loan was the photo of Otilia who looks quite happy among her plants. She is somewhat of a botanist -- she grows ornamental plants and sells them as her business. Otilia lives with her husband and her youngest daughter in a province of Peru called Lamas. I was also attracted to this loan because of Otilia's age -- she is 64-years-old and seems to draw much strength from the operation of her business.
In Otilia's profile of herself, she notes that the purpose of her business is to contribute to the beautification of her town. At the end of every year, Otilia expresses her gratitude for the blessings she has received by spending a portion of her business profits to organize a chocolada -- where hot chocolate and small gifts are given to children.
She requested a loan in the amount of $350, which she will use to buy a supply of seeds, ceramic planters, and other organic materials needed to cultivate her plants. Our company contributed $25 to this loan and we did the same for every business we loaned to. Otilia has 6 months to repay her loan, and currently she has completed the first scheduled payment of $59.
Moving to another continent entirely, meet Alahmad Haitov, who is located in Dushanbe, the capital and largest city of Tajikistan.
The country is situated in Central Asia; Afghanistan borders the country to the south, and the People's Republic of China is to the East. As you can see from the photo of him in his store, Alahmad operates a retail business selling DVDs, computer games, and other consumer electronics.
I was drawn to this loan because of what looks like a level of quality and professionalism in Alahmad's store. While thumbing through loans on Kiva's site, I was a little surprised to find a business with such costly inventory and immediately wondered about the type of people who make up Alahmad's customer base. Unfortunately, Kiva does not have a fellow located in Tajikistan who might be able to connect with this business, so I am left to speculate. My best guess is that Alahmad's business is able to survive -- and even grow -- because it is located in Tajikistan's largest city, a place that no doubt draws tourists, and where residents would naturally buy their goods.
Like many entrepreneurs in the U.S., Alahmad initially financed his business by using all of his personal savings. He started the business in order to support his wife, who is a homemaker, and his five children. Alahmad's business started with the sale of DVDs, but in order to attract more customers and grow the business, he added other types of inventory, which he purchases from suppliers in China.
Alahmad requested a $1,200 loan, the largest of any of the individual entrepreneurs we contributed to, and will use it to buy his next batch of inventory. He has a year to pay back the loan, and is scheduled to make $100 payments monthly. He made his first scheduled payment last month, which was divided among the 42 contributors to this business.
Stay tuned for updates on the rest of our entrepreneurs. In the meantime, if you have any questions about Kiva or the entrepreneurs we sponsored, please post them in the comments section of this blog and I will do my best to respond.