Posted by: rcieri | May 1, 2009

Micro-lending through Kiva connects Elon to entrepreneurs in developing countries

March 3, 2009
by Rachel Cieri
In the tiny Middle Eastern country of Tajikistan, single mother Madina Mamadjonova struggled to provide for her 5-year-old daughter by selling traditional dresses she made herself. With her husband unable to find work, she became the sole supporter of her family and had little time to be with her daughter. Now, all that has changed because of an Elon alumna in Charlottesville, Va.

Until Kelli Palmer sat down with communications professor Ocek Eke, she had never heard of Kiva, the micro-lending organization that introduced her to Mamadjonova. Eke and his global experience class had been raising funds to make a small loan to one of the thousands of entrepreneurs in developing countries that Kiva supports.

The world’s first person-to-person micro-lending site,, works to connect U.S. citizens to individuals and groups around the world by facilitating no-interest loans. The organization’s partners and field agents travel through some of the most remote regions of the world to find local business owners who lack the credit history to secure traditional loans.

“The cool thing about Kiva is that you can see the profiles of the people you’re lending to and see their progress,” Palmer said.

Kiva volunteers record the entrepreurners’ stories, post their information and photos online and allow lenders to browse through their “profiles” to select the person to whom they lend.

Each entrepreneur asks for a certain dollar amount for a specific purpose — one might need to buy a donkey to transport his goods, another could need equipment to mass-produce his product or, in Mamadjonova’s case, the collateral would help buy garments from other clothing-makers for resale. Each loan is repaid over a period of six to 12 months
The loans are typically small, but lenders need not provide the entire loan.

Instead, they can lend in $25 increments so that several users might contribute to the same loan. The process of lending is as simple as buying a product online — Kiva lets lenders contribute through PayPal or a credit card and when the loan is repaid the money can either be put toward another loan, donated to the Kiva organization itself or withdrawn for the lender’s personal use.

“When they told me about it, I immediately pulled money out of my purse and said ‘This is my contribution,’” Palmer said of her conversation with Eke and his students.

Because she was the child of a single mother, she feels a special connection to the struggling single mothers around the world and has supported women from several continents. She is currently lending to eight entrepreneurs, each in a different country.

“Some people give 10 percent of income to church. I give 10 percent of my income to helping people,” she said.

Kiva allows lenders to connect with one another by forming groups, and Elon University’s group currently has 15 members who have contributed a total of 82 loans to people in almost 20 countries.

Sophomore Catherine Reynolds is not a member of this group, but jumped on the opportunity to get involved after being invited to a Facebook group in support of the organization.

“I’d never heard of it before, but it seemed like a really good way to help get people on their feet,” she said.

Reynolds has made two loans, using the same $25 she contributed for the first loan to pay for the second.

“We’re college students, so there’s not a lot of money to go around,” Reynolds said. “But $25 can go a long way.”

Right now, Madina Mamadjonova has repaid about $500 of her $1,000 loan, the equivalent of 3,400 somoni, Tajikistan’s national currency. As Palmer finds out through progress reports, Mamadjonova has been able to expand her business and increase her profit, allowing her to spend more time with her daughter.

Palmer loves seeing her borrowers prosper.
“It’s great to have that sense of interconnectedness,” Palmer said.



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