How Kiva Works, The Long Version

Kiva teams up with a Field Partner

Field Partners come in a range of organizational types, including microfinance organizations (MFIs), social businesses, schools and non-profit organizations. These organizations are united by a common commitment to serve the needs of people at the bottom of the pyramid either through financial services or by using credit to help expand access to pro-poor products and services. Kiva's Field Partners have expertise in their local markets and a mission to alleviate poverty. These are the organizations that facilitate Kiva loans on the ground. Our Field Partners know their local communities and do all the leg work required to get Kiva loans to the borrowers posted on the Kiva website.

Field Partners disburse loans and upload stories

Field Partners disburse loans as soon as they are needed. They can do this up to 30 days before the loan request is posted on Kiva's website or 90 days after (most choose to disburse funds before the loan request is posted). The Field Partner collects borrower stories, pictures and loan details, and uploads them to Kiva. Volunteer editors and translators review the loan requests and publish them to Kiva's site. Many Field Partners require mandatory savings as part of the loan cycle in order to ensure that borrowers represent a good lending risk and can build up cash reserves.

Lenders browse profiles and lend

Lenders browse loan requests and select which ones they'd like to fund. They can lend as little as $25 or as much as the entire amount of the loan. To help streamline the loan transaction process, loan requests posted by the Field Partner are rounded up to the nearest $25 increment. Kiva aggregates funds from Kiva lenders and provides them to the Field Partner.

Kiva disburses lenders' funds to the Field Partner

The Field Partner uses the funds to replenish the loan they've already made to the borrower. Kiva provides these funds on a regular schedule.

Borrowers repay their loans

The Field Partner collects repayments from Kiva borrowers as well as any interest due and lets Kiva know if a repayment was not made as scheduled. Interest rates are set by the Field Partner, and that interest is used to cover the Field Partner's operating costs. Kiva doesn't charge interest to its Field Partners and does not provide interest to lenders. Kiva also gives Field Partners the option to cover currency losses. Learn more >

To minimize the expense and maximize the efficiency of money transfers, Kiva works on a net billing system. This means that, for any given month, we subtract the amount of Field Partner repayments from the amount of loans made by Kiva lenders. Kiva only asks our Field Partners to send payments for the difference and they have 30 days to send payment.

Kiva provides repayments to lenders

If there is already money in the Field Partner's account, or once their payment is received, Kiva uses these funds to credit the appropriate lenders with their loan repayments. Lenders can re-lend their funds to another borrower, donate their funds to Kiva (to cover operational expenses), or withdraw their funds via PayPal.

Currency Exchange Loss

When lending funds across national boundaries, the local currency in the Field Partner's country of operation may lose some of its value relative to the USD, thus requiring the Field Partner to use more of its local currency to reimburse Kiva in USD. Kiva offers Field Partners the option to protect themselves against severe currency fluctuations (a US dollar appreciation of over 10% relative to the local currency) by sharing any losses greater than 10% with Kiva lenders.* By bearing these losses, lenders are able to protect the Field Partner and its borrowers from catastrophic currency devaluations.