The Most Expiring Loan: Part 1

Gamarjoba! (“Hello!” in Georgian)

I’m currently in Tbilisi, Georgia renewing my Azerbaijani visa and traveling a bit around the region. Hence the “gamarjoba” instead of what’s becoming a regular “salamu alaykum”.

During training for the Kiva Fellowship I heard it mentioned numerous times that taxi drivers in Central Asia (but specifically in Azerbaijan) were the least demanded loans on Kiva. Their loans took the longest to get funded and expired most often. I was not surprised. After all, “Transportation”, being at the end of the Sector list on Kiva also competes with attention-grabbers like “Agriculture”, “Food”, “Housing” and “Retail” that precede it. What’s more, Kiva’s lenders prefer loaning to women, a fact supported by the percentage of Kiva loans that have been made to women entrepreneurs, which currently stands at almost 82%. Thus, taxi drivers raising funds on Kiva are at a justifiable disadvantage considering their entirely male demographic. I gave some more thought to this trend and came up with a few possible causes for it.

Kiva Lenders are really passionate about alleviating poverty. It is then understandable why Sectors more essential to a person’s survival are preferred to supporting industries: one cannot survive without food but can carry on without private transportation. Unless one lives in a place without any type of public transportation, and taxis are the only way of getting around, loans to taxi drivers can even appear to encourage a service of luxury.

“Transportation” sector is one of the few on Kiva that is not good-centered. That is understandable as economies in developing countries are generally driven by the production of goods, while in the developed countries services account for a much higher percentage of the GDP. Industrialization certainly defines developed countries but it is the high servitization of products within the developed world that separates it from the world still developing. Therefore loans to taxi drivers might also come off as loans to persons in more developed developing countries.

But why are Central Asian taxi drivers less popular than their South American or African counterparts? The area that comprises the former Soviet Union is relatively more developed than other regions on Kiva. After WWII USSR made it an objective to build up the infrastructure and industrialize as much of the country as possible. A lot was accomplished in 40 years until the communist superpower began crumbling and the Gorbachev-initiated perestroika devastated the region. Countries of the former USSR were left with an infrastructure in collapse, industries discontinued and most of the population struggling to survive.

Since then there has been an economic resurgence in the region, but poverty remains a big problem. However, poverty in Central Asia is not comparable to poverty in Africa. The poor in latter are much poorer than the poor of the former, especially if you compare the average standards of living, the purchasing power parity and the GDP per capita of these regions. As a Kiva Lender it makes sense to me to loan to the entrepreneur who will benefit most from my $25.

Bearing in mind the causes (whether justified or not) of Kiva loans to taxi drivers in Central Asia being in least demand it is important to remember that poverty should not be a popularity contest, but a world-wide effort without undue partiality. To fund a taxi driver in Central Asia click here.

In Part 2 of this blog pose I will provide a bit more detail as to why the supply of “Taxi loans” on Kiva and the demand for them is so mismatched. I will also give some background on taxi drivers in Azerbaijan, their profession, and my experiences with them.

Nakhvamdis da didi madloba! (“Good bye and many thanks!” in Georgian)

Ivan Ledyashov is a Kiva Fellow working with AqroInvest Credit Union and Komak Credit Union in Baku, Azerbaijan. Please helpfund entrepreneurs in Azerbaijan!