Wednesday, January 15, 2014

Nellie and Nikki Researching on Service Learning Day 1

Want to Join Our Team on Kiva?

To join our team and assist entrepreneurs around the world click on the link below:

Wesley and Aryan Researching on Service Learning Day 1

Outline for Service Learning Day 2

On our first service learning day we focused on research. Therefore, on our second service learning day we plan to focus on touching up and creating a final presentation for the businesses we plan to present to. In the meantime we are in the process of trying to find businesses that will allow us to present the concept of Kiva to them. In order to be successful during our presentation in front of businesses we are planning, for our second service learning day, to have a few mock presentations in front of teachers such as Mr. Anderson and any others who will be able to watch us present and give us any critiques regarding our presentation technique. Also, in order to perfect our presentation even further, we plan to get in contact members of previous Kiva Service Learning groups that would be able to provide us with any extra first hand advice.

More About Us

Our Service Learning group for Kiva consists of four members, in order to be efficient we have divided all the tasks required to be successful among ourselves.

Nikki Parmar: My job is to research the story of Kiva, how it was started, why it was developed and learn more about the individual people who started Kiva.
Wesley Jiang: My job is to research the process of how to make a loan. This includes how to set up an account on Kiva, join groups on Kiva, and overall be able to navigate around
Nellie Hamadani: My job is to research the majority of the terms regarding the concept of microfinance/microloans. Also, I am in charge of knowing how to explain how the field agents involved with Kiva work, how the loans are processed.
Aryan Assar: My job is to research how Kiva works overall, why it is important, how it has made an impact, and what it provides for people in developing countries.

Day 1 - Research and Learning More About Kiva

Today was our first day of Service Learning Day!

We started by familiarizing ourselves with everything regarding Kiva. We focused on learning about what microfinance is, the history of modern microfinance, microfinance institutions, and the microfinance impact and outcomes. We used this information to answer the question "Why don't banks serve poor people?" Then we researched costs, interest rates, and  sustainability.

First off, microfinance is the supply of loans, savings, and other basic financial services. Kiva is using this concept of microfinance/microloans in order to help struggling entrepreneurs all around the world. Kiva is able to provide the money for these loans by small loans made on their website, In order to contribute to a loan anyone can create an online account on the Kiva website and with the easy click of a button and credit card information, someone can make a loan. Loans start at as low as $25 and the loans are paid back with 0% interest. The reason Kiva is able to make a difference is because these loans are able to help entrepreneurs in developing economies who are unable to support their ideas or businesses with a financial backing. Kiva is simply a way to connect people in developed economies to assist those who are in need of financial support easily. Without the assistance of Kiva's members thousands of entrepreneurs around the world would not be able to hold the power to create opportunity for themselves. The great part about Kiva is that 100% of every dollar you lend on Kiva goes directly towards funding loans; Kiva does not take a portion of the profits.

Some statistics about Kiva:

Since Kiva was founded in 2005:

1,038,876 kiva lenders
$516,238,900 in loans 
99.00% repayment rate

Kiva works with:

237 field partners 
450 volunteers around the world
73 different countries 

Why don't banks serve poor people?
Formal financial institutions were not designed to help those who don't already have financial assets - they were designed to help those who do. So what do poor people do? Credit is available from informal commercial and non-commerical money-lenders but usually at a very high cost to borrowers. Some banks do provide savings services. Banks provide savings services such as savings services are available through a variety of informal relationships like savings clubs, rotating savings and credit associations, and mutual insurance societies that have a tendency to be erratic and insecure." However, the majority of formal banks do not provide microfinance products because microfinance is an expensive enterprise - one can make a lot more money on a large loan than a small loan, and you won't make much money holding savings accounts with very little funds in them. Banks can make more money if they only provide financial services to those who already have money.