Kiva Microloans

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Hannah Harrison
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Kiva is an international non-profit facilitating increased financial access for those around the world for whom loans are unavailable, aiming to directly progress many of the goals on the UN’s 2030 Agenda. It provides the opportunity for people to loan as little as $25 to help fund development projects ranging from agriculture and health, to food, education and female emancipation. While I believe that Kiva – and similar non-profits - are born out of good intentions, particularly the desire to put the power to alleviate poverty in the hands of everyone, I believe it is important to consider how the positionalities that contribute to funding such loans may affect how we see development, poverty and aid. How these topics come to be known by those of us in positions of power will ultimately shape their sustainability; consequently, I believe Kiva has a duty to do more to critique the current development paradigm in which it is situated.

What it's made of:


Kiva loans are made up of four key conduits: the potential lender, the borrower, Field Partner (for indirect loans) and the activities its work finances. Kiva’s work is contingent on a good supply of potential lenders which may be considered an immediate sustainability issue. Whilst they have supplemented this with media advertisements in the past, Kiva’s work, particularly, in times of economic hardship can be seen as inherently insecure. If donors decline in number or cease to give money - for whatever reason - to a particular cause or area, it is unlikely they will receive enough funding for a loan to be generated.

For most direct loans, no interest is given to the borrower. However for indirect loans, Field Partners often require interest from borrowers if payments are not met. To prevent a great financial burden being placed on borrowers, Kiva’s website explains that it does not partner with companies who a) charge “too much” interest on loans or b) allow borrowers to descend into unmanageable debt if they default. It also works with the Smart Campaign of Financial Inclusion to achieve this aim. Further, Field Partners are clearly assessed on their default rate and social performance, this information is available for donors to see on Kiva’s website. Both are examples of Kiva aiming to increase transparency and for donors and borrowers to be able to make safe, well-informed financial decisions.

How it's made:


The loan system appears very simple: it allows donors to give money from as little as $25 to help crowdfund a project of their choice. The project will then use the money, produce social returns and become self-sustaining. The money – once returned to the donor – can be cycled into another project for the process to repeat again, clearly in line with the Sustainable Development Goals (SDGs). At the onset, this may seem like a perfect system, opening the doors of finance to those without collateral and indeed the doors of developmental aid to those who are not billionaires.

As with all lending practices, Kiva loans do carry some risk for the donor and lender, particularly because of Field Partner bankruptcy or the US dollar appreciating. However, Kiva does outline this fairly clearly on its website. What is less clear is that, when Field Partners are involved, Kiva acts as a connector of individual lenders to microfinance institutions, not individual lenders to individual borrowers as I initially presumed from its marketing.

What should also be considered is the sustainability of Kiva’s underlying principle: driving economic growth to create a more equitable future for all. This comes in spite of historical models and current data suggesting that economic growth cannot be decoupled from energy and material use. In other words, if we were to take this principle and apply it universally to countries all around the world, we would have crashed through Earth’s ecological ceiling; a greater focus needs to be on how to reduce systemic inequality at the same time as mitigative climate solutions whilst also dealing with ecological debt. 

Who makes it:


Kiva is fundamentally underlined by who, what and where the donors would like to invest in. In other words, what – according to its donors – is worth financing? Of course, the issue of what should (not) take precedence is not uncommon in the field of developmental aid. However, I believe we are left to work out for ourselves what the most urgent Kiva causes are. This could be seen as a positive, allowing us to help us feel a connection to where our money is going. However as neither an expert in the developmental sector nor experienced with on-the-ground traditions, I would have preferred more information to feel confident in the knowledge that any money I might give was not doing any unintended harm.

While I believe it is a fair assessment to suggest Kiva’s intention is to do good and help progress the SDGs, I would urge caution when using such sites. While Kiva self-describes as transparent, and has been applauded for this, I would not describe them as being sufficiently meticulous in order to ensure no unintended harm is done from its investments. Financing developmental aid is a complicated topic, and while some may connect with Kiva’s work, there are perhaps other places we can turn to instead to best encourage just transitions.