Please note this site has financial relationships with American Express and this post may contain affiliate links. Read my Advertiser Disclosure policy here to learn more about my partners.
Sound too good to be true? It’s real, and I can’t believe I didn’t get involved in this sooner. Well, I guess I can believe it. You know, full-time job, toddler, husband, bossy dog, running the blog, laundry, blah, blah, etc…. Regardless, now that I have finally gotten involved, I wanted to share the info in the hopes that some of you will want to “empower people around the world $25 at a time” and earn some really easy miles and points in the meantime.
What I am talking about is an organization called Kiva. Kiva has been around since 2005, has over 689,000 lenders, has given out $284 million dollars in loans in 61 countries, and has a repayment rate of 98.88% on those loans. Kiva works with microfinance institutions on five continents to provide loans to people without access to traditional banking systems. One hundred percent of the loans are sent to these microfinance institutions, which Kiva calls “field partners”, who administer the loans in the field. While tons of stuff goes on behind the scenes to verify that the borrowers, field partners, etc… are all legitimate and are following the Kiva protocols and procedures, the process for those who want to make the loans (us) is super simple.
1. Join Kiva. This is free and took me about a minute.
2. Join a lending team. This is not required, but it makes the process so much more fun. Both Milepoint and Flyertalk have Kiva lending teams. I am one of the newest members of the Milepoint team. The members of that team call themselves “enablers”, but I think they just provide fantastic support and encouragement for one another, and the Kiva mission. In fact, there is even a Milepoint Kiva DO happening in San Fransisco March 9-11th. Save the world, earn miles, learn about Kiva directly from Kiva staff, be hosted by Virgin American at SFO, and have fun with your friends. What could be better?
Being a part of a team simply means that your individual loans also count toward that team’s totals. You still choose who to lend to, and repayments still come back to you.
3. Make a loan (or 50). This is both the fun part, and the hard part. You get to look through seemingly countless bios of people from around the world who are seeking loans to grow their grocery store, get better feed for their livestock, buy more fabric for their garment making business, etc… You also get to see a picture of that person and read exactly what they want to use the loan for. You see their geographic location, repayment schedule, their “field partner risk rating”, and more. You can choose to lend from $25 – $500 toward an individual loan, in increments of $25.
4. Get updates on your loan(s). Throughout the life of the loan you will get progress updates from Kiva in the form of emails. You can also go back to the website and get updates directly.
5. Get paid back. This part is certainly not guaranteed, and Kiva does a good job of outlining some of the reasons why repayment may not happen, but according to their statistics, 98.88% of the money lent since 2005 has been repaid. So, your chances are pretty good. This is one of the reasons it is helpful to loan smaller amounts to a larger number of borrowers who are located in different parts of the world – you diversify your “risk”.
6. Repeat. Go back to Step 3 and repeat the process with your repaid funds. If you want to maximize the miles and points you earn on your credit cards, make sure that you “cash out” the money that you get repaid from the loans via PayPal, and then lend that money back to Kiva. If you leave it in your Kiva account and re-loan the money that way, you are missing out on earning additional points from using your rewards credit cards. Of course, you can also choose to “cash out” and leave the funds in your own bank account as well. There are no penalties or PayPal fees collected for “cashing out”, so to use a term from The Frequent Miler, this could almost be a “Perpetual Points Machine”. 😉
If you want a little more info on how Kiva works, this short video is simple to understand and informative. meVAPscrGsI
The vast majority of us that collect miles and points are in the enviable position to have “first-world problems” like: my upgrade didn’t clear, a reward seat isn’t available on the flight I want, seat 1A is already taken, they didn’t serve me a pre-departure beverage, I had to gate-check my bag because the overhead bins were full, I sat next to a crying baby, etc… While those situations can certainly be annoying, most of us in the miles and points game are living pretty comfortable lives. That means we have the opportunity to help bring others up. With my own background being in social work, I am a big advocate of the “teach a man/woman to fish” approach toward helping others.
For my first Kiva loan, I lent to a woman in Peru who raises small farm animals to sell at a local market. She wanted a $375 loan in order to purchase a better feed for her animals so that they would be larger, and thus fetch a higher selling price when they are sold at the market. Assuming she is successful in her venture, she could potentially bring in more money for her family by selling larger animals at the market. This wasn’t a handout so that she can have something given to her in the short run, it was an investment in her and her business. Everyone is a winner in that scenario, and I am happy to be a very small part of that venture. It also went toward helping me meet the minimum spending requirements on my new credit card.
I have never had to be in the position of not obtaining high quality food for both my family and my pets (closest thing I have to livestock!). I have never had to be a single mother who has a job raising animals (which I am sure is very hard work). I sit at a computer making a middle-class salary that probably results in more income in one year than many around the world will have in their lifetime. So, my opinion is “who am I to not loan $25 to help make a difference in someone’s life?” I certainly don’t have tons of cash lying around, but I have $25. In a week or two, I’ll probably have another $25, and next month, probably another $25. You get the idea. Of course, there is the added benefit of racking up miles and points through credit card spending by making these loans. You have a really good shot at getting most of that money back when the loans are repaid, but the miles earned are yours to keep!
Whatever your reason for lending is, I highly recommend you go check out Kiva and see if you might want to get involved. You will find me “rooting you on” over with the Milepoint Lending Team. In their one year of existence, they have already loaned over 1.5 million dollars! They were the fastest team in Kiva history to loan both $1M and $1.5M, beating the second closest team by months. Basically, they rock!
To get a couple of you started on your lending journey, I am donating a $25 Kiva gift card, and Randy Peterson (one of the founders of Milepoint, and basically the Godfather of Miles and Points) will also donate a $25 Kiva gift card. The Kiva gift cards will be given to two people who comment on this post about anything related to Kiva. Could be a question, a comment, a story, or whatever. I will select the two gift card winners at random. Current Kiva members are also welcome to enter!
Update: There is now a third $25 gift card prize thanks to Frequent Flyer Collector! So, there will now be three winners who get some extra help on their lending journey with Kiva. You can also enter to win a $25 Kiva gift card from MichaelW Travels or The Frequent Miler.
Entries are accepted until 11:59PM Central on Sunday 2/12/12. Look for the winners to be announced on Monday!