February 22, 2008, Yarmouth, Maine: Mariela Ordonez of Guayaquil, Equador had a problem: She has a small shop that sells purses and backpacks. It was a successful shop, but there was a demand for other items that she did not carry. She did not have the money to purchase more products for her store, so a group of students from North Yarmouth Academy (NYA) stepped in to loan her money to expand her business. How was this possible? Through a website called Kiva. Last spring, Chair of NYA's History Department Peter Sillin read an article in The New York Times that described how through an organization called Kiva, individuals could loan money to struggling entrepreneurs in poor countries with just a credit card and a computer. Sillin was intrigued and sought a way to get NYA involved. He created a Kiva Club at NYA, which began meeting in October and currently has fourteen members. They have made twenty-two investments to date.
Kiva is a non-profit organization that started in 2005. Through their website, Kiva makes connections between worthy borrowers like Ms. Ordonez and interested lenders like the students at NYA. As a history teacher, Sillin knew student participation in Kiva would reinforce NYA's history curriculum in many ways. He felt there was much to learn from Kiva. "It is always great for students to see a human face on such a huge and abstract problem as global poverty. Kiva also gives the kids a concrete way to channel their vaguely idealistic intentions about wanting to 'make a difference.' Secondly, Kiva provides a terrific opportunity to talk about the mechanics of capitalism. We can talk about questions like 'What is capital?' 'How does lending work?' 'What factors influence supply and demand?' 'What are interest rates?' Finally, it is great fun to find these places on the map. We learn a lot about the culture and geography of the places where we make our investments because we feel like we 'know a local' there," explained Sillin. "I like Kiva because it's a way I can make a difference without an extravagant trip. It's much more practical for someone in my position," said Ashleigh Taylor (NYA Junior).
The Kiva Club meets weekly and already has a portfolio of $550 that they raised through school fundraisers and by selling handmade items at the NYA craft fair. Their investments are in places like Paraguay (fish sales), Tajikistan (shoe sales), Tanzania (charcoal sales), Cambodia (bakery, weaving) Ecuador (clothing store, bakery, general store, fruits and vegetables) and Samoa (fishing, seamstress), just to name a few. Their average size loan is $25. "The students decide as a group whom to support. They begin by region because they want to spread their loans globally, then they read the profiles together," said Sillin. In their last meeting, they put push pins on a map to indicate where they currently have loans and they brainstormed ideas for their next fundraiser. "I enjoy being in touch and helping individuals around the world. It's a more personal experience than typical forms of humanitarianism or philanthropy," said Hannah Bewsey (NYA Sophomore).
How does it work? On the Kiva website, microfinance charities post qualifying entrepreneurs' photos and loan information. (Microfinance charities give small loans that help underprivileged people who don't qualify for traditional loans start or expand their small businesses. They distribute the funds loaned through Kiva to the loan recipients.) Kiva participants then browse profiles and select a loan recipient. Users can loan money with a credit card. Kiva wires the money to the microfinance charity that disburses the funds to the entrepreneur. Through the Kiva website, lenders can keep track of their entrepreneurs---how their businesses are doing, if their loan repayments are on schedule, etc. Once the loan is repaid, Kiva lenders can choose to withdraw their principal or re-loan it to another entrepreneur. Kiva's overall repayment rate is an astonishing 99.86%.
When asked what the future holds for the Kiva Club, Sillin explains, "We want to continue to increase our portfolio and reinvest as the loans roll over. In time, we should have a very sizeable amount to loan and will have helped hundreds of people around the world."
For more information on Kiva, visit their website at www.kiva.org.
North Yarmouth Academy is an independent, college preparatory, coeducational day school serving students in grades 6 through 12. NYA is dedicated to fostering integrity, character and intellect in young adults.
For more information, please contact:
Kristi Belesca
Director of Community Development and Communications
North Yarmouth Academy
148 Main Street
Yarmouth, ME 04096
207-846-2380 ext. 9327
kbelesca@nya.org