Green finance

Written by: Kathleen Bennett, Kiva Portfolio Manager, South America & Guatemala
At Kiva, our mission is to connect people through lending to alleviate poverty, and this mission extends beyond just financial poverty. We aim to help increase access to basic services as well, from clean water and sanitation, to getting sustainable energy in homes. Green loans on Kiva help borrowers switch to environmentally friendly products that reduce pollution, promote sustainable practices and help families succeed.
Jackline, a Kiva borrower in Kenya
Not only do green loans help the environment, they also create opportunities for people to invest in their future. With green loans, borrowers can access eco-friendly technology and are able to improve their businesses and livelihoods. The positive impact continues as their communities also receive environmental benefits, such as clean rivers from waste reduction. On the other side, lenders love the high potential of impact with green loans. As Kiva’s President, Premal Shah, explains, “the benefits for borrowers are less energy consumption, more savings and improvements in health and well-being.” To date, the Kiva community has funded over $18 million in green loans and that number keeps on growing! 
One effort the Kiva community supports is creating affordable access to clean energy products. New technologies are expensive and don’t directly generate income, which makes it hard to get a loan from a bank to make this investment. Kiva saw this problem in Haiti, where, most families use coal stoves for cooking. Finding a better alternative was a priority as traditional stoves were costly and created fumes that contribute to respiratory issues. The solution was a cleaner cookstove with a ceramic core. The improved stove runs on half the amount of coal, which minimizes carbon emissions and reduces the amount of smoke exposure. Also, over time, families save money with the improved stove, as they’re less expensive to maintain. To increase access to these new stoves, Kiva partnered with the D and E Green Enterprises. This social enterprise provides in-kind loans to entrepreneurs to buy a stock of clean cookstoves. The borrowers, then, become retailers in their community, which helps create formal employment, in addition to helping local communities access safe and sustainable energy. 
With Kiva’s widespread partnerships, green loans are available in a variety of industries. Lenders can help people farm sustainably, bring electricity to rural areas and provide environmentally-focused businesses with the capital to grow. One amazing story is Isidro Lara’s. Isidro is a coffee farmer in the small, rural town of San Pedro Copán in Honduras. Together with his wife and 4 kids, he works hard to produce high quality coffee beans and earn a healthy income. Typically, during the coffee drying process, Isidro has used machine dryer, which runs on substantial amounts of fossil fuels. This year, however, Isidro wanted to create a more sustainable and economical way to process this coffee. He used his Kiva loan to purchase the necessary materials to build a solar dryer. With the new machine, Isidro didn’t need to buy fuel, so he was able to increase his harvest profitability and reduce greenhouse gas emissions at the same time. With green loans, families, like Isidro’s, are able to make small changes that contribute to a larger shift in how farmers think about sustainable technologies. 
On a larger scale, green loans can provide the necessary capital to enterprises in critical early-growth stages. Kiva partnered with the US-based non-profit, Wildlife Conservation Society (WCS), to provide loans to help expand its conservation initiatives. In 2013, WCS started the Enterprise Development Program to support conservation projects around the world. Unfortunately, WCS wasn’t able to access traditional financing because they lacked a proven business model and financial providers considered them too risky. With Kiva’s help, they were able to get the working capital needed for the project to run successfully and sustainably.
A Kiva borrower in Uganda with a solar light

Through these, and so many other partnerships, Kiva is providing sustainable solutions to environmental challenges. It’s a continuous commitment, and we’re always looking for new partners and lenders who want to fund conservation efforts around the globe. We support green loans because they build financial bridges so that people, like Isidro, can access clean energy technologies and thrive. It’s a win-win-win scenario for lenders, borrowers and the earth, and we’re proud to help. 
Check out green loans here and create opportunity today. 

About the author

Kayla Grueneich

Kayla received her B.A. in Philosophy and Psychology from the University of Puget Sound. She has volunteered with a wide variety of animals from cats at her local shelter, sea turtles in Costa Rica, and elephants at the Oakland Zoo. Kayla hopes to pursue a career that supports animal welfare issues through community empowerment and education. She is excited to join Kiva to learn about international development from a non-profit viewpoint.