Kiva mini loans – The ultimate charity for DIY investors?

One of my goals this year is to give back to society and not wait until I’m financially independent. In this post I would like to tell you a bit more about my favourite way of doing charity: mini loans via

I actually dream of being able to give back to society in a way that resonates to me. But somehow I do tend to connect that thinking a lot to the moment of reaching financial independence.

My feeling now is that I need all my mind-space and my available cash focused on dividend growth investing so that I will become financially independent as quick as possible.

This prevents me somehow from doing proper charity and hence why I like to share with you an alternative option that Kiva provides. Because this one plays perfectly on the investors mindset. Hence, with little additional mental effort I found a way to contribute to charity in a way that suits me.

So what are Mini loans?

Mini loans are are also known as person-to-person microlending, crowdlending or crowdfunding loans.

It is the practice of lending money to individuals or businesses through (online) services that match lenders with borrowers. 

The whole idea behind mini loans is that they’re generally low in funding needs and quickly accessible by the borrower.

In the case of Kiva we are not just talking about mini loans to regular people or businesses, but rather to the underserved in this world. Kiva is effectively a crowdfunding platform funded by people who don’t mind losing a little of their principal when providing loans. Kiva has reported a 95.8% repayment rate.

You get the point right?

A brief introduction to Kiva

So Kiva is probably the largest crowdfunding platform that I am aware of that is focused on the underserved in the world.

It has a non-profit goal but their Micro Finance (MFI) partners do charge the costs that it makes to the people that take out the loan. However, it leaves it up to the individual lender to decide whether a compensation for the administration costs is provided. The MFI does get the money at 0%, which usually would cost 8 – 12%, hence the supply chain heavily benefits from this.

Having said that, let’s have a brief look at how the organization presents itself 👇


I find this very inspirational and the idea just simply brilliant. 

As an example, I have personally been in a remote part of Africa and I have seen first hand how the people live over there. Access to mini-loans to fund for instance some ingredients to make soap can be life-changing for people. 

It’s not just the entrepreneurial part, but in such cases it also empowers women. It allows them to speak-up for themselves and live an emancipated life

In the case of rural Kenya where I was, women are oftentimes rather valued at the amount of livestock it costs to fund a marriage. I spoke with several men there and it really wasn’t about love and rather about the need for someone to care for them (i.e. cooking, bearing children). 

I truly believe therefore that an organization like Kivia contributes to such a topic as emancipation.

Something which I hold so dearly.

How Kiva works

The video above touched a little bit on it already, but let me explain a bit more. 

The user journey really starts with the borrower. The borrower has the need for a mini-loan and often has limited access to local banking at a reasonable price related to the risk associated with their business. 


  1. The borrower requests a mini-loan at Kiva. 
  2. The loan request goes through a brief underwriting and approval process by one of Kiva’s trusted partners.
  3. If accepted, the loan is posted on kiva and the fundraising starts. This is where the lenders (you and I) can lend money to the requestor in increments of 25 USD
  4. The borrower gets the loan when the fundraising goal has been achieved (i.e. 600 USD)
  5. The borrower starts repaying the loan at a set schedule (i.e. once a month)
  6. You can use the repaid money to participate in other fundraisers as soon as the first repayments get in.

The above is mostly based on the information provided via, but I would like to clarify that there might be a catch to it.

Some criticism

According to this article, partners of Kiva do seem to pre-grand sometimes a loan to a borrower while it still needs to start the fundraiser on Kiva. 

I personally don’t have a problem with this, because in the end it is important that the fundraising and borrowing system works. There are simply many biases in charity that prevent some people from getting a mini-loan. 

As an example, I observed over the years that single mothers tend to be more popular than single fathers on Kiva. Now, while we all might prefer as individuals to opt for the single mother, don’t you think that the single father has equal rights for a mini-loan?

This is the reason why I’m pretty OK with it and although Kiva’s instruction can be perceived misleading at times, I do believe that it’s for the better cause. 

Having said that, I’m a big fan of this platform and I’ve been using it now for more than 5 years. 

Let’s therefore give you a brief step-by-step instruction on how to borrow your well-earned money.

Step-2-step instruction to fund a mini-loan

The first step is to register yourself at ([sign in] >> [create a new Kiva account])

Once signed-in there are multiple call-to-actions that are trying to get you to lend money to one of the borrowers. Especially now during covid-19.

I will show you how it works though by using the main menu item.

  1. Click [Lend] in the top-left menu bar and select an option of your interest. In this example I am choosing [Food].
  1. You will now see a results page with all people that are in a need for a mini-loan. Browse through them and select the one who’d you like to lend your money to. Select the amount of money (i.e. 25 USD) and press [Lend now]
Kiva results page. Picture anonymized
  1. It will add your contribution to the basket. Click [Proceed to Checkout]
  2. Reconfirm the amount of money you would like to lend as part of the fundraising. Also confirm how much you would like to donate. In my case it automatically selects 3.75 USD. You can also set this to zero or choose another amount. I typically donate 10% of the value so I’m changing it to 2.50 USD. In this example I am still having 24.82 USD credit from the money that I got repaid from other borrowers. Hence, I still need to pay an additional 2.68 USD.
Example of microlending
  1. Choose your payment method and fill in the details. I am using my Revolut card to benefit from low currency transaction fees. Click [Checkout] and if all goes well you should have lend money as part of a mini-loan to someone in need. See order confirmation below.
  1. You will now be able to find this contribution back in your portfolio. Click your [profile] and click [portfolio] to find it back.

Nice right?

I have just lend 25 USD to a person that wants to buy more vegetables to boost their business. The fundraising goal was 250 USD and we’re waiting for few others to still chip in.

This should be just a matter of time 👌

Microlending: the ultimate charity for DIY investors?

What do you think? I believe so! 

One of the good-old principles in investing is to protect your principal first.

A 95.8% repayment rate is almost doing that. Personally I had a 100% repayment rate for my portfolio and I have yet to find a borrower that is not able to repay.

At the same time a core philosophy in investment is that businesses make capital investments when they are confident about the future. In such a case they intend to grow their business by improving productive capacity. 

This is exactly what the borrowers from Kiva also do and for that reason they need our “investments”. The difference here is that we are not getting a return on our invested capital compared to what we seek when investing in a dividend growth stock.

This is also where the charity kicks in. Because if we assume that we would usually earn a 7% return in the stock market, then in this case we’re not getting it. This is the opportunity cost regarding our invested money and this is why I call it charity.

So to sum it up, the fact that we are lending money to a borrower is something that I consider an investment.

I love investing and this is why lending money for mini-loans in a charitable manner is to me the ultimate form of charity for Do-It-Yourself investors 💪

Summing it up

Doing charity is not something that we need to wait for until we are financially independent. 

I hope to have shown you an alternative way to do charity which might fit better to us as investors. Especially if you don’t have the time to trade in your hours to physically go out and do charity work. 

Last but not least, I didn’t want to withhold the following interesting facts for you:

  • It’s not just people in Africa that are in a need for a mini-loan. You will also find people from the United States and other familiar countries on there.
  • 1.9 million people provided 1.5 billion in loans. Hence almost an average of 1000 USD per person.
  • 81% of borrowers are woman
  • A Kiva loan is funded every 2 minutes

Yours Truly,

European Dividend Growth Investor

Help me grow!

Your Comment can help someone in an underserved population!

I am writing this blog not just for myself, but also for you 🙏

Having said that, a lot of engagement is happening on Twitter and that’s something which I really appreciate. Personally though I would love to see some more engagement on this blog via the comment section.

So why not combine the best of two worlds?

Hence why I personally commit to spend 1 Euro for every legit comment that I’m receiving on this blog until the end of this year up-to a maximum of 500 Euro 💪.

This is how you can help an person in need and at the same time help me increase the engagement on this blog.

Thank you for your support 🙏

If you don’t like the way the world is

you change it.

You just do it

one step at a time.

Marian Wright Edelman
5 1 vote
Article Rating


I’m not a certified financial planner/advisor nor a certified financial analyst nor an economist nor a CPA nor an accountant nor a lawyer. I’m not a finance professional through formal education. I’m a person who believes and takes pride in a sense of freedom, satisfaction, fulfillment and empowerment that I get from being financially competent and being conscious managing my personal money. The contents on this blog are for informational and entertainment purposes only and does not constitute financial, accounting, or legal advice. I can’t promise that the information shared on my blog is appropriate for you or anyone else. By reading this blog, you agree to hold me harmless from any ramifications, financial or otherwise, that occur to you as a result of acting on information provided on this blog.

Notify of
Most Voted
Newest Oldest
Inline Feedbacks
View all comments