Kiva's first country of focus is Uganda, where the Internet is available even in poor rural areas.   Lenders may loan money through, which lists businesses in need of funding and provides background on the entrepreneur starting the enterprise. Individuals may makes loans in increments as small as $25, and can expect to receive repayment, without interest, at the end of the loan term, which typically runs between six and 12 months. Since Kiva's source of capital is charitably-minded individuals, it is able to provide more flexible loan terms than traditional financial institutions.

To date Kiva has funded 13 small enterprises in Uganda, including a livestock business, a medicine shop, several produce businesses, a fish monger and a clothing reseller. Two of the entrepreneurs have already repaid their loans in full.   The enterprises Kiva is working with are asking for loans averaging $500, and the average lender is loaning between $25 and $100.

Making a loan through Kiva is easy, secure and personal.   The lender simply goes to, registers in a password-protected section, browses the business section to review the enterprises in need of funding, learns how much funding the enterprises are requesting, and then chooses one or more businesses to which to loan.   Loans are made via PayPal, a globally recognized online payment service.   Lenders can stay abreast of the progress of the businesses to which they have lent via blog-like updates posted on the Kiva site.   If lenders wish to correspond with the business owner, they can do so through the Kiva partner representative in Uganda.

Kiva was co-founded by Matthew and Jessica Flannery, a couple with connections to Stanford and Silicon Valley.   While living and working in Uganda, Kenya and Tanzania in 2004 -- Jessica with a non-profit organization called Village Enterprise Fund (VEF), and Matthew as a filmmaker -- they saw first-hand a number of entrepreneurs who were being helped by VEF, and hundreds more looking for an opportunity to start their own enterprises. The couple began developing the concept of an Internet-based fund where socially-minded individuals could loan directly to these deserving entrepreneurs, and spent the next year researching and creating a business plan to make Kiva a reality.  

"Microfinance is an exciting movement.   Before Kiva, there was really no way for the individual -- at lower price points -- to get involved as a lender.   We wanted people like us to be able to participate in the power of microlending," said Matthew Flannery.   "We started Kiva because we saw loans as a very personal and sustainable way to help entrepreneurs across the world.   When you loan to someone and get paid back, you get proof that a business has succeeded -- and you are more likely to loan again. "

While there are various estimates of the size and growth potential of the microfinance industry worldwide, the demand for microcredit services among the world's poorest is still largely unmet.   Estimates show that donor agencies spend between $800 million-$1 billion per year, serving 13-16 million poor -- just 4-10% of the potential market.   There is a lack of capital being directed to microfinance institutions, and therefore a significant opportunity to redirect this capital to distribute as microloans, which are repaid at rates of 95% or higher.   The microfinance industry has grown 25-30% annually over the last five years, and is expected to continue to grow.

Kiva is the first microlending Web site designed to provide individuals with the ability to connect with and make personal loans to small businesses in developing countries. Founded in 2004 by Matthew and Jessica Flannery, Kiva's goal is to reduce poverty in developing countries by giving entrepreneurs the ability to build their businesses through flexible loans with six- to 12-month terms. Kiva allows individuals to act as a "micro VC" by loaning directly to entrepreneurs with feasible business plans. Kiva is headquartered in Palo Alto, CA. For more information about Kiva, please visit