Filed under: General Charity Musings, Microphilanthropy | Tags: david roodman, kiva, kiva donor illusion, kiva scam, microcredit, microfinance
If you’ve been following the debate surrounding whether microcredit works or not you’ll be interested to read A Mostly Comprehensive Guide to the Kiva and Donor Illusion Debate, written earlier this month. While I’ve written several articles on this blog about microcredit and its impacts on third world communities, I have never focused in on any particular microcredit organization, and if you could only analyze one it would obviously be Kiva.
Kiva, the popular lending site that boasts over $27M in loans disbursed, is being critized for misleading users to believe that peer-to-peer connections exist when in fact there are intermediary lenders in the process. In the article Kiva Is Not Quite What It Seems, microfinance expert David Roodman cites examples of borrowers recieving money before any Kiva loan has established. And while Kiva doesn’t hide this information, it also doesn’t do much to make the fact clear. Of course, in cases like this it’s hard to put the blame on any one party – communication is 2-way, so who’s to say that it’s not the donors who are misleading themselves?
In the end, the question to ask is: does it matter? Kiva helps get money to entrepreneurs, and most importantly, Kiva makes donors feel good. Donors become educated, and are more involved with the issues plaguing various third world countries. And on this point I think most microfinance critics actually are in agreement – Kiva isn’t all bad.
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