Microlending helps small enterepreneurs start businesses Essay

Microlending helps small enterepreneurs start businesses - Essay Example There are collaborative efforts between Kiva, lenders, entrepreneurs, and other players in the microfinance sector. This diversifies its reach to the global population, allowing web-based donations to be mobilized for loaning purposes. The organization of Kiva.org is unique relative to the financial purposes it serves. The microfinance combines a traditional business system with a contemporary web platform in executing its operations. The ultimate objective is to reach out to the needy entrepreneurial population and help it eradicate poverty in both the short run and long run. Kiva.org uses other microfinance players to reach out to the globe. Being a web-based microfinance, it does not necessarily need physical locations to attend to entrepreneurs. Also, working with other global microfinances further makes Kiva.org unique. Most importantly, the microfinance does not operate on a return-on-investment basis. Lenders actually donate the loan funds without expecting any returns on the loans that Kiva gives to needy entrepreneurs. The loans given by Kiva.org to entrepreneurs come from donations that are received from the lenders through the website. This essentially deviates from traditional businesses where loan funds are obtained from deposit-taking activities. On the same note, Kiva.org depends on field partners to have entrepreneurs’ profiles approved in order to qualify them for microfinance lending. The model Kiva.org uses to give loans is effective and efficient. As the situation stands, this microfinance has reached millions of entrepreneurs in need of loans. Follow-ups are also made to not only ensure that the awarded loans are put to use, but also repayments are collected when they fall due. While this model appears simple, it is actually sophisticated and functional. Personally, I think that this model would work on a larger scale. The