SFGate.com: Micro-loan portal Kiva celebrates 5 years
... Micro-asset financing is a relatively recent innovation in micro-finance - which is best known for small loans issued to people trying to escape poverty by starting a business - and is an example of how the field has explored different loan models.
Kiva, celebrating its fifth anniversary on Wednesday, took that experimentation to a new level in 2005 when it coupled the Internet and large numbers of individual lenders with needy borrowers.
Using a Web portal, Kiva facilitates loans from individuals who can log onto its site and read borrowers' stories. Kiva partners with lending organizations in developing countries, which take the no-interest loans from Kiva and distribute them locally.
Kiva lenders are paid back if the borrower succeeds, but do not earn interest. Interest charged by the local lender typically goes toward operating costs and salaries.
In recent years, with the help of Kiva, micro-finance as an anti-poverty tool has quickly grown in popularity. But it also has developed critics. Some note that at least half the field is now occupied by private banks, which in the best case are seeking profits along with positive social impacts, and in the worst, are simply looking to make a buck off the poor - even from minute loans.
Others have complained that Kiva overstated the connection between its online lenders and needy borrowers.
Kiva and others in the micro-finance field agree that there have been bumps along the road. But they point to the growing number of websites modeled on Kiva as well as new programs - such as the asset financing helping Ndung'u in Kenya - as proof that the industry is evolving and is likely to continue influencing economic development worldwide. ...