Microfinance. It’s a big, fancy word for tiny loans. These tiny loans have become big business in recent years, though. Matt Flannery had never heard of microloans a few short years ago, but his wife Jessica would change that. Together, they’re making the world a better place through a company called Kiva.
Muhammad Yunus is the man behind the microfinancing concept. Yunus is a Bangladeshi economics professor who saw what poverty was doing to ravage his home land. People all around him were struggling because they were in debt to loan sharks by as little as $25. Banks don’t make loans that small, so loan sharks would take advantage of would-be entrepreneurs.
Grameen Bank was founded by Muhammad Yunus to help fund interest-free microloans. He and the bank were jointly awarded the Nobel Peace Prize in 2006. In 2004, Jessica Flannery invited Matt to attend an event at Stanford University with her. The speaker would be Professor Yunus. The event would prove to be life-changing.
At that time, Matt was working for TiVo making software. He had never heard of microfinance, but decided to attend for Jessica’s sake. What the two of them heard started the wheels spinning in their minds. They knew there was something big to be done. For a year, they brainstormed about how to get Kiva off the ground.
During their newlywed year, Jessica spent several months in Africa. Matt decided to join her, and the experience shocked him. In America, $5 million loans are the norm for a business. In Africa, usually $500 or less is all that is needed to start a seamstress business or open a bicycle repair shop.
What we commonly call “The American Dream” is actually a universal dream. People all over the world are driven to make a better life for themselves, their families, and their communities. Matt was an aspiring entrepreneur himself when he traveled to Africa, so it was easy for him to see his driving spirit alive and well in the hearts of Africans.
One night, after a year of brainstorming, Matt and Jessica were in America thinking about the people they’d met in Africa. They decided to jump on their idea by creating a website. They had already received quite a few negative comments from people, but it was their passion that told them Kiva would work.
Today, www.Kiva.org is a phenomenal success. People around the world can apply for a loan, and individuals can lend as little as $25 to help them reach their goals. Profiles are set up, and stories are followed. When the loans are paid back your money can come back to you or be loaned to someone else. Over the past two years, Kiva’s loans have totaled over $25 million to over 250,000 people. Now that’s success!
Tags: Loans