A Stockpile of Dollars: How to Deploy Kiva Funding
by Josh Wilcox, KF9 Peru
With a significant new source of funding comes considerable responsibility and opportunity for those who represent the funds at the local MFIs (aka the Kiva Fellows). One of the most exciting privileges about working at a brand new pilot partner is the opportunity to influence how Kiva is best utilized and implemented. When discussing just this topic with the credit manager of Caja Rural Señor de Luren, we brainstormed how the new “Kiva product” could benefit the community within Ica where other capital did not penetrate:
- The major benefit decided upon will be that new “Kiva clients” will be charged a 1% lower monthly interest rate than their other clients, which is quite significant on an annualized basis! This will not only ease pressure off clients who struggle to pay the high interest payments that microfinance institutions typically charge but it will also attract additional microentrepreneurs whose access to funding has been limited due to their inability to make the monthly repayments from solely their standard business operations.
- Another aim for these loans will be to support new microenterprises in need of funding to get on their feet. These entrepreneurs may struggle either because they do not have sufficient credit experience/collateral or because they need an injection of capital to start all over again after their previous business or home was destroyed in the severe Peru earthquake of 2007. By promoting the “Kiva product” to these entrepreneurs who may typically be viewed as higher risk and not eligible for a normal loan, we will provide the funding necessary for many hard-working men and women to realize their business ideas.
Only time will tell how these factors may or may not impact the lives, families, and businesses of those within the Ica community. However, I was quite grateful to be bestowed the opportunity to provide input on how microcredit will be disbursed to entrepreneurs in Peru!
The following is Chapter 2 of my video diary. Enjoy!'
Josh Wilcox is a Kiva Fellow at Caja Rural Señor de Luren in Ica, Peru as part of the KF9 class.