NEW INDEX DEVELOPED TO MEASURE POVERTY: In an effort to help target aid more effectively to specific communities worldwide, the United Nations (UN) and Oxford University recently announced a new way to measure poverty.
The “Multidimensional Poverty Index” (MPI) assesses factors contributing
to poverty other than income, including education, health, assets, and key
services such as water, sanitation, and electricity to give a “multidimensional
picture of people living in hardship,” according to the UN.
Researchers looking at data from 104 countries with 5.2 billion people (about 78% of the world population) used the MPI and found that approximately 1.7 billion people, about 33%, live in multidimensional poverty, compared to 1.3 billion living on $1.25 a day or less, the generally accepted measure of extreme poverty.
A lending Organization with no Banking: Kiva
Kiva empowers individuals to lend to an entrepreneur across the globe. By combining microfinance with the internet, Kiva is creating a global community of people connected through lending. Kiva's mission is to connect people, through lending, for the sake of alleviating poverty.
What is microfinance?
"Microfinance is the supply of loans, savings, and other basic financial services to the poor." (CGAP)
As the financial services of microfinance usually involve small amounts of money – small loans, small savings etc. – the term "microfinance" helps to differentiate these services from those which formal banks provide.
Why are they small? Someone who doesn't have a lot of money isn't likely to want to take out a $5,000 loan, or be able to open a savings account with an opening balance of $1,000. Hence – "micro".
Pendo Luisi, 27 years old, borrowed $175 to open a cafe in Dar es Salaam, Tanzania.
Kiva was born of the following beliefs:
• People are by nature generous, and will help others if given the opportunity to do so in a transparent, accountable way.
• The poor are highly motivated and can be very successful when given an opportunity.
• By connecting people we can create relationships beyond financial transactions, and build a global community expressing support and encouragement of one another.
Kiva promotes:
• Dignity: Kiva encourages partnership relationships as opposed to benefactor relationships. Partnership relationships are characterized by mutual dignity and respect.
• Accountability: Loans encourage more accountability than donations where repayment is not expected.
• Transparency: The Kiva website is an open platform where communication can flow freely around the world.
As of November 2009, Kiva has facilitated over $100 million in loans.
How Kiva Works
1) Kiva Partners with a Microfinance Institution
Kiva partners with existing microfinance institutions around the world (we call them Field Partners). These organizations that have expertise in microfinance and a mission to alleviate poverty facilitate Kiva loans on the ground. Our Field Partners know their local area and clients and do all the leg work required to get Kiva loans to the entrepreneurs posted on Kiva.org.
2) Field Partners Disburse Loans and Upload Stories
Field Partners disburse loans as soon as they are needed. They can do this up to 30 days before the loan request is posted on Kiva's website or 30 days after (most choose to disburse funds before the loan request is posted). The Field Partner collects entrepreneur stories, pictures and loan details and uploads them to Kiva. Volunteer editors and translators review the loan requests and publish them to Kiva.org. Many Field Partners require mandatory savings as part of the loan cycle in order to ensure that borrowers represent a good lending risk and can build up cash reserves.
3) Lenders Browse Profiles and Lend
Lenders browse loan requests and select which ones they'd like to fund. Lenders can fund as little as $25 and as much as the entire amount of the loan. To help streamline the loan transaction process, loan requests posted by the Field Partner are rounded up to the nearest $25 increment. Kiva aggregates funds from Kiva lenders and provides them to the Field Partner.
4) Kiva Disburses Lenders' Funds to the Field Partner
The Field Partner uses the funds to replenish the loan they've already made to the entrepreneur. Kiva provides these funds on a schedule that accommodates the Field Partners' banking procedures.
5) Entrepreneurs Repay Their Loans
The Field Partner collects repayments from Kiva entrepreneurs as well as any interest due and lets Kiva know if a repayment was not made as scheduled. Interest rates are set by the Field Partner, and that interest is used to cover the Field Partner's operating costs. Kiva doesn't charge interest to its Field Partners and does not provide interest to lenders. Kiva also gives Field Partners the option to cover currency losses. Learn more
To minimize the expense and maximize the efficiency of money transfers, Kiva works on a net billing system. This means that, for any given month, we subtract the amount of Field Partner repayments from the amount of loans made by Kiva lenders. Kiva only asks our Field Partners to send payments for the difference and they have 30 days to send payment.
6) Kiva Provides Repayments to Lenders
If there is already money in the Field Partner's account, or once their payment is received, Kiva uses these funds to credit the appropriate lenders with their loan repayments. Lenders can re-lend their funds to another entrepreneur, donate their funds to Kiva (to cover operational expenses), or withdraw their funds via PayPal.
Saverio Manzo
http://www.saveriomanzo.com/
No comments:
Post a Comment