Why micro loans; Why small business; and Why poverty

Eric Rindal – KF16 – La Paz, Bolivia

Another day, another dollar lost as a volunteer. The first part of my second Fellowship has gone by tremendously fast. I only have two more months left of what will be my seven months as a Kiva Fellow. No longer do I feel like a volunteer, this is now my way of life. At this juncture, after leaving Sierra Leone and entering Bolivia, I ask three questions: Why micro loans; Why small business; and Why poverty.

As a Fellow these questions encapsulate most of what I think about. In short, I want to know why things are the way they are. Always surrounded by questions of how to cultivate economic development, I am finding few answers but am still encouraged. Rather, I see a conglomerate of ideas that help make sense of volunteering within economic development.

Some answers are clear: when people are treated equally and offered an opportunity to help themselves financially, they truly have a greater chance of bettering their life. In this case, equality is seen in access to financial capital. My Kiva Coordinator at IMPRO in Bolivia noted that roughly 60% of their clients did not qualify to receive funding from regular banks. Part of Kiva’s mission and most microfinance institutions’ missions is to knock down the barriers for access to funds. A Kiva borrower I interviewed, Nelly, said, “If I don’t have any money [to start a business with my loan], then I don’t have a business.”

In few words, that answers “Why microcredit?” These small loans really do get people started and on a path toward personal economic growth.

So, why small business? Really, they offer the greatest flexibility and are kindled by ingenuity. In an economy with high unemployment and few formal sector jobs, an entrepreneurial mind thrives. With a single micro loan I have seen productivity and sales increase dramatically when a puzzle-maker purchased a skill saw, when a store owner purchased a freezer to sell cold drinks, or when a woman purchased a cow for milk.

There is great potential to grow a small business, and micro loans are a significant catalyst for this growth.

Now, I hesitantly and naturally ask, “Why poverty?” What I have seen, is that a lack of opportunity, in nearly every sense of the word, truly plagues many people living in the developing (and developed) world. These opportunities can be exemplified by decent education, healthcare, nutrition, and an involved government, which are scarce in many areas of the world. I believe the presence of these forces can distinctly contribute to a person’s growth or to their stagnation. Their absence can ultimately be a shackle to poverty. If opportunities in each of those areas are offered to a population, they have the capacity to provide stability and a foundation for growth.

What role we play in the lives of those around the world can alter the way things are. The small role I play as a Fellow in getting a loan up on Kiva is barely noticeable… but crucial. Kiva offers opportunities for anyone to be part of this microcosm of getting borrowers started and to empower him or her. The role of a Fellow differs from a loan officer at a MFI or even, you, the Kiva lender. If we start with equality, continue with opportunity, and foster ingenuity, we have an occasion to participate in redefining the answer to why things are the way they are.

Eric Rindal is a Kiva Fellow based in La Paz, Bolivia working with Emprender and IMPRO. It would be awesome if you lent to Bolivian borrowers or joined the Emprender Lending Team. Eric previously volunteered in Sierra Leone as a KF15, and worked with BRAC, ARD, and SMT. It would be awesome if you also checked out Kiva borrowers in Sierra Leone