Why we closed Prosper.com and opened Kiva.org

by Leslie on July 5, 2008

A strange thing has happened over the last few months. The more we track our financial progress, consider alternative forms of income, explore the pf blog community, and even consider searching for jobs that make us happier and more fulfilled, an incredible feeling has become heavier and heavier. We are so lucky to live where we live with the freedoms and opportunities we have: the ability to gain the education we want, and to seek or create value that in turn creates wealth for ourselves and our family. It is incredible. There will always be bumps in the road, but we know that we will always have the ability to move forward and work towards our goals. Now that we are inching closer to our own degree of financial freedom we feel the need to help those that may not have the same level of opportunity.

In the past I would donate old clothes to the local drop box or to the battered woman’s shelter where my grandparents volunteer, and I’d usually give my spare change to the Salvation Army; Things have changed now, we want to give a lot more, and not just give to satisfy an immediate need – we want to give someone the ability to realize a goal of creating wealth and to make progress in an enterprise no matter how large the adversity.

We were looking for a way to help entrepreneurs and decided to check out Prosper.com. We searched through the listings for about 3 weeks and just didn’t get the good vibes we were hoping for. It seemed that most people on the site were basically looking for personal loans or a debt consolidation loan. Debt consolidation is a great idea, but we didn’t get a great feeling helping to pay off someones Samsung 52-Inch 1080p 120Hz LCD HDTV by basically giving them cash advances. I know I am being a little harsh here and yes, some people were simply down on their luck due to no fault of their own, and yes, some people were looking for capital to get a business idea off the ground, but micro-finance (or peer to peer lending) is only one of many available debt options here in the United States, and as we have recently seen, you can borrow oodles of cash regardless of your ability to repay, no questions asked.

Then we remembered Kiva.org. Back in March Ry’s mom and sister signed up for Kiva and sent us a link email. We didn’t do anything about it then, but based on their recommendation, the fact that several other bloggers have been using the site, and our changed outlook, we decided to take give it a try.

Kiva and Prosper have completely different feels, and with Kiva it’s obvious that these people honestly don’t have the same abundance of opportunities that we have here. Many are simply trying to improve their lives a little at a time. Instead of finding people who need a down payment on a new car, we found people who want to convert their home from a straw hut to an actual building, or people who want to start and build the first business in their village. We won’t be earning interest on the loans, as they are interest free, but making money was never our goal – we just want to help spread opportunity.

Kiva is set up in an interesting way; they have teamed up with many micro-finance groups all over the world who have an intimate knowledge of their local situations. These partners find an entrepreneur or family who need money for a worthy cause and contact Kiva. According to the website, these groups not only provide a way to get the funding to the people, but they also often provide training tailored to their needs. Kiva then posts about the borrower, giving a brief description of the individual or family and why they deserve the loan. If you decide to donate the money goes to the local field-partner who passes it directly to the person you wish to help. It’s a micro-financing site, so the loans are funded by many people, and you can donate as little as $25 or up to the full amount asked. Throughout the repayment time frame, the borrower gives small payments to the field partner who sends it to Kiva, who then distributes it back among the lenders.

There are partners in almost every continent, and there are thousands of borrowers looking for help. You can choose the geographic location to find entrepreneurs, or you can choose the category of loan (business, personal, health, arts, transportation, etc) you wish to supply. There are so many people who need help that it’s hard to pick just one person to support.


Fisherman seeks refrigerator

  • 51 year old fisherman with three children in Azerbaijan
  • 12 years of experience
  • Seeks 12 month loan for $725 USD in order to purchase a refrigerator
  • Has already successfully repaid two prior microloans

After researching the site we decided that Kiva was a great program and that we wanted to put some money towards it. We wanted to start off fairly small, just to see how things worked, and we decided to lend $50.

We spent a long time looking over loan applicants – reading what they wanted to do, where they were located, and the reviews of the partners that were sponsoring them. I found someone I felt really needed the money and who would be likely to make repayments over time: Kodjo Komedja, an entrepreneur in Togo who would like to improve
his dry cleaning business.


After signing up for Kiva we decided that it was something we would like to do more regularly as our ability to make a difference grows.

So from now on 25% of all ad income earned from the blog will be allocated to micro-finance lending or other charitable organizations.

Since every ad click or sponsorship addition presents us with an opportunity to achieve our goals, we want to share some of that opportunity with others.

It’s a small step, but it’s something we feel is really worth it.


GG @ This Writer&#03 July 5, 2008 at 11:40 am

I really enjoyed this post and can feel your passion for Kiva. Can I just say I love when people use the blessings they have to help others? You're inspiring, and thanks for sharing. I'm going to look into Kiva a little more when I get time.

Kris July 5, 2008 at 9:53 pm

A student brought Kiva to my attention this year, and I was able to convince the school to make it a project for my econ classes – present and future. The kids LOVE it – they are able to see how difficult it is to get a loan in other countries, but also get some insight on how much we have here – when the guy they picked needed a loan to buy dead cars to melt down to make pots and pans…that really got them. Class blog is at : http://fahskiva.blogspot.com . Great post! 🙂

Small Budget, Big St July 6, 2008 at 7:48 am

I really enjoyed this post! I have also been considering causes like Kiva to donate my money to. Many people (even those with debt) don't realize how fortunate they to have things like food, shelter and the ability to support yourself when people in other parts of the world are just trying to survive.

Revanche July 6, 2008 at 6:58 pm

I love that microfinance has taken on such a life of its own. I recently finished reading Muhammad Yunus's book (Banker to the Poor) about the original microfinance structure and the development of Grameen Bank, and it makes so much sense. I can't wait until I can carve out another section of my budget for this.

asgreen July 7, 2008 at 10:05 am

I love Kiva. I think it's a great way to really help those who need it, and to see your money go to good use. Also it teaches personal finance since they are supposed to repay the loan.

r'smom July 7, 2008 at 6:13 pm

Kiva is an awsome way to give back to the world community and feel like you have the power to help those who are less fortunate. I give you two a lot of credit for thinking of others and taking that leap to actually making a difference in our world!

Pete July 9, 2008 at 2:46 pm

I just had a guest post on my blog this week about this exact topic. I think it's a great idea, and I think i may be giving it a shot soon!

[email protected] July 12, 2008 at 8:20 pm

Thanks everyone! We really enjoy your feedback. We are glad to hear that many of you have or may consider checking out the site. It's a great feeling to have the ability, even if it's very small, to impact people and really create positive opportunities where few may exist.

Jon July 13, 2008 at 5:54 pm

Kiva is a great idea but it's awful that you don't make any money off the loans. I am pretty disgusted that they get rich Westerners to lend money for free, but then they charge like 20% interest and pocket the profits.

[email protected] July 13, 2008 at 7:12 pm

Hi Jon,

You are correct to degree:

From their FAQ's:

"Microfinance is an expensive business, which is essentially the reason small loans are not provided by large banks. While Kiva.org's Field Partners do not bear the cost of capital or the cost of default, they do bear transaction costs and currency risk. Charging interest to entrepreneurs enables our Field Partners to bear these costs and achieve self-sustainability."

Part of why we were attracted to Kiva was because they don't charge any interest to the loan recipients, which is why we don't get any compensation. The "In country" partners do change interest and while we are not ecstatic about it, unfortunately it may be a necessary evil to get money to those experiencing the most adversity.


DoughRoller August 11, 2008 at 1:07 pm

Contributing a portion of your blog income is a great way to give back. I currently give a portion of my blog's income to Common Hope, a charitable organization in Guatemala that helps educate children. Kiva is another great alternative, and one I may turn to next year.

Scott @ The Passive August 15, 2008 at 12:15 am

I almost forgot had a Kiva account open from a year ago and enjoyed the process so much. It was wonderful to read through the requests and see how the money would be used. I bid on a loan to fund a woman's store or mercado in south america. She wanted to buy another fridge for her store so she could sell more milk. Amazing!
I also use Prosper, but agree it doesn't have that same feeling at all. I enjoy good stories of helping students or helping with home purchases, but the feeling isn't the same as a that of Kiva.
One thought, you could use your earnings from prosper to fund kiva loans?

Samuel Diamond August 24, 2008 at 2:21 pm

I really like that you have also joined Kiva.com. But my only qualm is that I am not a fan of showcasing a site for world activism yet simultaneously put on referral links ( Samasung TV and Prosper referral ).

I understand these are ads, but if you can utilize these ads in other blog posts, that would be better. Showcasing the ability of altruism is great, and I thank you for it. But it always hits me as suspicious if there are referral ads within the blog.

[email protected] August 24, 2008 at 3:02 pm

I agree with you here Samuel and can say it didn't really occur to me that it may be a little distasteful. I do see what you are saying, and I would like to apologize to anyone who may have felt a little put off. There are plenty of opportunities on this site to earn a little for my writing, this post should not be one of them. Thanks for the honest feedback. I really appreciate it.

{ 2 trackbacks }

Previous post:

Next post: