Kiva

Any reader of the AutoSlash blog recognizes that everyone on our team is a frequent traveler. We're exceptionally fortunate and know how our lives have improved by the experiences we have around the world. We are much improved as individuals due to our interactions globally, and we're well aware that being middle-class in the United States affords us opportunities that the majority of the world's population could never experience; our savings and purchasing power vastly outweighs the financial capability of most others around the globe. In addition, most others around the globe have to figure out how to make a living based on local resources or needs; aside from government, there tend to be few large employers in non-industrial nations.

Starting -- or improving -- businesses in these countries often requires capital that's hard for the small entrepreneur to find. In our travels, we face many mundane choices, such as where we will stay or which rental car we will choose (highly discounted via AutoSlash, of course). Whether we're on the road or at home, there's one question that is not as pressing: "How am I going to make a living today?" In much of the world, individuals make decisions on a daily basis in order to promote and protect their livelihoods. My own experiences watching small entrepreneurs create businesses while traveling got me hooked on Kiva.org, where lenders can help provide capital to entrepreneurs around the world, making a difference with loans as small as $25. The principle is of microfinance and microcredit, reaching individuals without access to banking systems

I’ve known about microfinance for decades as my college microeconomics professor was the first bookkeeper at Nobel Peace Prize winner Muhammad Yunus’ Grameen Bank. Why did Dr. Yunus win the Nobel Peace Prize instead of the Prize in Economic Sciences? He had recognized many years ago that providing access to capital – opportunities for the disadvantaged – decreased conflicts and wars. Once a creative, hard-working person has access to capital, that individual knows how to make a difference in his or her own life. And the second reason Dr. Yunus won the Nobel Peace Prize? Microfinance and microcredit actually work. The overall repayment rate through Kiva is currently 97.1%, although the repayment rate on the loans I've selected is much higher. And the Kiva organization never works with governments, only with the field partners who interact directly with the entrepreneurs.

Curious how Kiva works? Here are a flow-chart and Q&A section.

Kiva Lender Field Trip

Are you a person who talks with small business owners on your travels? I am. It's part of how I see the world based upon my academic training. There's a realization that there's no "one size fits all" approach to business. If there was only one way to rent cars, there would be no AutoSlash! Yet every time I travel, I watch how people move and interact as they conduct business on a daily basis. One of my favorite examples was on Easter Island, where all goods and services are transported from a cargo ship to shore by small boats weaving through rocks instead of building a pier. Then I realized that the boats were dozens of jobs in a small community that would disappear if there were a pier. Entrepreneurs rationally conduct business in a way that provides income for their families, even when the reason is originally hard to see.

I was selected to participate in the first ever Kiva Lender Field Trip in early 2017, visiting multiple entrepreneurs who had been assisted by the organization. Our first visits included entrepreneurs who were moving out of substandard housing made of scrap metal, despite incomes ranging from the USD equivalent of 4-17 dollars per day. Our final visits were with farmers who were collecting biogas and fertilizer from animal manure, in many cases eliminating the cost of gas in the home and the cost of fertilizer for fields and avoiding pollution from run-off. The access to comparatively small amounts of capital completely helped these entrepreneurs improve and reshape their lives in profound ways.    

On the farms we visited, the improvements made were solely driven by the entrepreneurs. These farmers knew what works and what doesn't work and were especially attuned to the environment -- if their soil or water is harmed, so is their livelihood. They also faced government policies that supported only the largest farms; the vast majority of farmers had no support from the government (only inspections and fines). Unlike residents in the most developed nations, there are few major employers around -- if not working for the government or one of the few factories, the population tends to all be self-employed. The business district isn't filled with large employers but instead, shops and farms run by individuals and small groups, making a living due to creativity and resourcefulness. And it's incredibly enriching to see how individuals from another culture solve problems; our visiting team wondered why recapturing gas and fertilizer was a worry in one region but not in others.

There's an old maxim: 

Give a person a fish and the person eats for a day.

Teach a person to fish and the person eats for a lifetime.

We're pretty sure everyone has heard that expression. There’s just one more part to consider.

What if all the person needs is a net?

The world's greatly improved when people who know what to do can afford the tools to do so! The minimum Kiva loan of $25? In the region we visited, $25 was a weekly wage for many individuals -- those housing entrepreneurs we visited made between $4 and $17 per day. The most striking component of the visit was the reception we received at each stop. All of the entrepreneurs were exceptionally kind and welcoming, without knowing who we were. Once the mission of Kiva was explained, the entrepreneurs were shocked that so many people throughout the world would contribute $25 or more to help improve that entrepreneur's life just by reading a short description. There was more shock at how far we had travelled to meet with them – one member of our visiting group flew from Asia -- and that we were committed to making the world better by supporting entrepreneurs who simply needed capital to implement their vision. 

We recognize every day how fortunate we are when we get to travel, and hope that AutoSlash users similarly find ways to help others, whether in the local community or halfway around the world.

Traveling Abroad with Classic Cars

The entrepreneurs creatively solving problems in business also applies to transportation needs and every AutoSlash story needs a car connection. A businessperson making a few dollars per day abroad may provide a living for their family but cannot purchase a new car; in fact, most of the entrepreneurs we visited didn't own a car. The last family we visited had a fully-sufficient farm with crops, animals, and fuel/fertilizer created from manure. As we sat down for dinner, I noticed a car in the corner of the courtyard.

A 1974 Ford Galaxie 500, and not only was the car still operational, it was the family's only car! Keeping that car operational for more than four decades is an engineering feat by the grandfather of the family and reminded me of many long evenings in the 1980's trying to keep Fords of the same vintage running with my own grandfather. My spoken Spanish suddenly improved when I started to talk to the family about their vehicle!

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