// halle.tc

This summer I have the honor of working with one of my favorite organizations, Kiva.org.  After reading Banker to the Poor a few years ago, I was sold on the idea that we can effectively alleviate poverty through empowering (and enabling) entrepreneurs.  As microfinance institutions began sprouting around the world, Kiva used technology to enhance the impact and allow anyone, anywhere to loan to a budding entrepreneur (read: Kiva is not the bank, it’s merely the lender-borrower match maker).

I made my first loan in 2007 to Sophath Mao, a flower seller, in Cambodia.  I like flowers, so I was happy to be an investor in her venture.  Sixteen loans later, not one of the entrepreneurs has defaulted.  In fact, there has been a total of $65 million invested with an overall 2% default rate.

This week, Kiva announced a sort of social experiment.   Kiva is partnering with new microfinance partners in the US.  Borrowers will be Americans who don’t have bank accounts and “micro-enterprises” that often rely on high-interest loans or payday advances.  Because of vastly different cost-of-living rates in the US, American entrepreneurs will be able to borrow as much as $10,000 (versus just $1,200 in the developing world).

There’s a bit of uncertainly on how lenders will respond.  Is part of Kiva’s success thus far the difference in purchasing power between developed and developing countries?  Or will Americans flock to the idea of lending to neighbors in their community?  Personally, I’m stoked about the opportunity to invest in an entrepreneur whose business I could visit down the street.  But I think many Americans may be drawn to the novelty, the exoticism, of connecting with someone in Uganda.