You may have noticed an ad for Kiva occasionally running in the left sidebar or below posts on pages of this site. What the heck is Kiva?

Kiva is a non-profit that helps manage loans between entrepreneurs in developing countries and lenders in places like the United States. Lenders, like me, review profiles of entrepreneurs on the Kiva site, to find someone we’d like to lend money to. Loans generally run around $1000 (goes a lot further in Paraguay than the USA) and pay zero interest. Yep, that’s right: Zero interest.

Kiva has partnered with groups on the ground in developing countries to find appropriate entrepreneurs to lend to.

It turns out that this actually works, and it works VERY well:

The Six Lessons of Kiva

The results are awesome: more than 123,000 people have loaned more than $12.4 million to 18,000 entrepreneurs. In fact, there so many lenders that there’s are individual limits so that everyone can make a loan. The process involves reading a short profile about each entrepreneur and then deciding which to fund. From beginning to end, you can make a loan in under five minutes if you’re a slow typist. Lenders do not earn interest though the micro-finance organizations that helped Kiva find the entrepreneur does. Entrepreneurs pay 99.67 percent of the loans.

So you have a 99.67% chance of getting the money you lent back. And if you somehow didn’t, it would still end up in the economy of a developing country.

If you don’t want to take my word or Guy Kawasaki’s word for it, how about Bill Clinton or . . . wait for it . . . Oprah? Yes, this is legit.

How does Kiva make money? First, they don’t need to make much, since they have around 250 volunteers working for them. Second, when donating, you’re asked to make a $2.50 additional donation to support Kiva. That’s an efficient non-profit.

I’m one of 12 people who’s money was pooled to fulfill Antonio’s (Caacupe, Paraguay) loan request for $1025 for his auto repair business:

Antonio

And one of 26 people who’s money was pooled to fulfill Pablo’s (Guayaquil, Ecuador) loan request for $975 to improve his furniture making busienss:

Pablo

If you find yourself in a holiday giving mood, how about trying some holiday lending?