-
Step 1
The first thing to understand is that in developed countries we tend to take a well developed financial system for granted. In developing countries such institutions do not exist. Even if they do, most banks require collateral in order to back loans. The working poor often do not have any property to use as collateral.
-
Step 2
Then we must understand that sometimes the only way to get a loan in these countries is to go to a loan shark. Obviously, this is not a good way to get a loan.
-
Step 3
Kiva is basically charity banking for the working poor. People are given loans on very favorable terms with no collateral to back the loan. There is an interest rate charged, but it is very small compared to what a loan shark would charge. Most of the interest is used to cover the due diligence of researching the loans.
-
Step 4
Please consider helping the working poor by lending them some money via Kiva!
