Alex made the point that with Kiva “aid can go directly from a miniscule aid donor (like me) to a miniscule recipient (like Nguyen thi Dieu) without having to pass through the giant cogs of the international aid bureaucracy”.
From time to time I’ve considered donating money to international charities that do aid work in Asia and Africa. This is usually when a celeb appears on the TV asking me to give a dollar a day to help villagers get goats and clean water. What’s put me off is knowing that a chunk of my money would never get to the villagers, but would be siphoned off to pay for administration overheads – an aid bureaucrat’s salary, their office expenses, the SUV they drive and so on.
As Alex says, Kiva avoids that problem. You lend direct to the applicant. You can choose to make a donation to Kiva’s admin costs, or not. Some other observations: the process of lending is simple and fast – it would’ve taken me 15 minutes tops to make a loan. The information about the applicant and the field partner was succinct yet enough to make an informed decision. And the facility for individuals to lend in small amounts, which are aggregated with other loans, lets you spread risk while providing the entrepreneur with a substantial sum of money.
I’d be interested to see if Kiva starts offering portfolios which lend for specific purposes, like organic farming and micro-power generation. And if the micro-credit concept can be applied in developed countries for people who can’t get business loans from commercial banks because they lack collateral.