Hello! My name is Kieran and I am a Kiva Fellow, sixth iteration. I am currently sitting on a turbulent flight back home to London after an intense week of training at Kiva’s San Francisco offices. I am sad to be leaving, slightly worried about the ancient aircraft I’m on (hoping that the technology is more up-to-date than the Nintendo Gameboy headphones the flight attendant is handing out), but excited about my impending assignment in Cambodia.
The past week has been an eye-opening, exhilarating, and potentially life-changing experience. The outstanding training we received was topped only by the friendliness and generosity of the Kiva staff we met. The enthusiasm and motivation of everyone at Kiva was a hurricane of fresh air. It felt like we’d just joined a little known pop band called The Beatles. You can tell from the buzz as soon as you walk into the office that Kiva is doing great things, and doing them well.
But wait… rewind… I wanted to share a little story about my first unwitting discovery of the concept of microfinance…
In 2006 I was fortunate enough to be travelling in China with my mum (that’s British for “mom” to any readers from the States). We had been there for a couple of weeks but were beginning to tire of the constant pollution in the cities, so we decided to head for the countryside on a public bus. Upon arriving in yet another small town, we realised the only way we were going to see the countryside was to flag down a rickshaw, essentially a three-wheeled pedal bike with a double seat at the back for passengers.
Our guide was in his twenties, eager to take us, and clearly not a smoker, as he proceeded to pedal the three of us up several long hills until we reached the outskirts of the town. He somehow managed to answer all of my mother’s questions about the surrounding sights whilst pedalling and maintaining a flow of oxygen to his lungs. At times, even his Olympic standard legs seemed to tire, and I willingly jumped out to give us a push. Intrigued as to how difficult it must be, I offered to take over pedalling, an offer which he politely refused. It was clearly a matter of pride, but I wasn’t backing down.
After my mum had explained in Mandarin that I simply wanted to have a go as I was considering a career change, he laughed and relinquished his saddle. “Hold onto your hats” I cheerfully joked. Little did I know that seconds later I would be eating my own proverbial hat. I climbed on and began trying to pedal on a relatively flat stretch of road. I say pedal, but that requires there to have actually been pedals, instead of the blocks of shiny wood that took their place. Time and time again my feet slipped off these zero-grip shin-bashers, causing great pain and the loss of much needed momentum. A brief attempt at a hill and it was game over.
Curious to understand how, or indeed why, he had chosen to effectively take it upon himself to replace the internal combustion engine, my mother peppered him with questions. By the top of the hill we understood that he hired the rickshaw from a guy in the town for 200 Yuan ($25) per month, and that in the summer months this usually generated between 400 and 600 Yuan per month of revenue, but only 300 to 400 Yuan per month in the off-season. Most of his profits were sent home to support his family, leaving him just enough to live on. With a maximum profit margin of $50 per month, this didn’t amount to much.
By the bottom of the next hill we had discovered that to buy his own rickshaw would cost 1000 Yuan, around $150. My mum and I sat in silence, except for the sound of her translating to me, shocked at the idea that such a relatively small amount of money to us, would transform this young man’s life from one of eternally scraping-by to potentially doubling his monthly profits.
Unbeknown to us, thirty years earlier a forward-thinking economics professor had come to a similar conclusion. He went on to found the internationally respected Grameen bank and later earned the Nobel Peace Prize. We just sat like in silence and scratched our heads.
With a quick calculation one could estimate that with a loan of $150 over 12 months, even at 20% flat interest rate (worst case rate taken from Chinese microfinance organisation www.wokai.org), monthly repayments would be $15, which would still have increased his profits by $10 per month as he would not have to pay the monthly $25 hire cost.
This little revelation sparked my interest in microfinance and resulted in me being stuck in the Deep Vein Thrombosis-prone position I am at this moment. The idea behind microfinance is to allow people, like our rickshaw guide, access to traditional financial services so that they have the opportunity to break the cycle of poverty, or in this case, the tricycle of poverty (just in case you didn’t still hadn’t got the title of this blog).
The unique concept pioneered by Kiva enables people like me, my mum, or anyone with internet access, to lend to thousands of people like this, to know exactly who we are lending to, and for what purpose, and even better, to find out what happened as a result of our loan. Our driver probably wouldn’t have accepted our money if we’d offered to give him $150 – I could tell by his reluctance to let me have a go at pedalling that he was a proud man. But he may have accepted a loan. Unfortunately at the time we had no way of facilitating a loan agreement, and we regret that. But thanks to Kiva, we are now able to make such partnerships with similar entrepreneurs all over the world.
Thank you Kiva!
PS I’ll try and keep my next blog shorter!/>