“Why loans?”
We get this question, and variations of it, quite a lot.
“Why would I loan to someone instead of just giving them the money?” “Aren’t loans kind of predatory?” "Why crowdfunding?"
So I wanted to take a moment to explain it all. From why we use loans, to why loans are more sustainable than one-time donations, and the due diligence process we use to ensure that Kiva loans are not predatory. Get ready for some stats, some interesting facts, and some stories from borrowers themselves.
Let’s go!
Why does Kiva use loans instead of donations?
Because opportunity shouldn’t be a privilege for some, but a right for all.
Did student loans help you get a degree? Did a mortgage help you buy a house? Have you ever had to use a credit card to help fund your expenses between paychecks? Most of us use credit in some form all throughout our lives, without realizing how important it is to be able to do so.
And as an entrepreneur, if you needed to buy a delivery truck for your business, you wouldn’t ask for donations; you’d apply for a loan. But billions of people around the world are denied these options, not because they lack ideas or drive, but because traditional banks won’t lend to them.
Kiva was built to fill this gap, to bridge this divide, and to make it easy for everyday people to fund the people and ideas they believe in.
We use loans instead of donations because we believe in partnership, not charity. A loan says, “I believe in you.” It’s a vote of confidence that affirms someone’s ability to lead, grow, and repay. On their own terms.
It’s sustainable. It’s scalable. It works.
Loans create agency, not dependency. They give people control and dignity. Instead of waiting for help, people are able to build the future they envision, with the trust and flexibility to do it their way. Lending isn’t one-sided. It’s a relationship built on trust. Kiva connects people, not as donors and recipients, but as partners in progress. A loan is more than a gift; it’s an investment. It’s not one party coming in to save the other, but individuals working together, investing in a shared future.
Donations often focus on what someone lacks. A loan focuses on their potential. It puts the power to act in people’s own hands, on their own terms.
While donations can provide temporary relief, they don’t always help long-term. Kiva partners with microfinance institutions (MFIs) in communities all over the world. These MFIs fill an important role in global equity; not only do they disburse loans, but they also offer financial literacy, business support, classes, and other add-on services — all built to provide people with the resources they need for future success.
Your loan isn’t a handout or a transaction. It’s a vote for equity. Because people repay their loans, your $25 can spark change again and again, circulating through communities and across borders. Repaid loans help people establish or improve credit, even in places where formal credit systems are limited or nonexistent. Loans open doors to future financing, business growth, and economic inclusion. And as well as building credit, loans build confidence. People often return to Kiva as their businesses grow and their options expand, creating more and more opportunities for themselves, their families, and their communities.
Aren’t loans kind of predatory?
While some loans certainly can be predatory (we’ve all seen the “check into cash” ads or heard stories about payday lending), Kiva takes a very different approach.
First of all, we’re not in the business of making money off of the loans we provide. Our employees and operations are 100% funded by grants and donations (thank you 💚). And while you may see some loans with interest or fees on our platform, those are regulated by the financial systems of those countries, none of which Kiva takes from or has any authority in granting or relieving. Kiva is proud to follow the Cerise+SPTF universal client protection standards. We only partner with organizations that have reasonable interest rates for their markets and industry standards. Kiva ensures that partners fund loan products that are affordable for clients and have a high social impact. Behind every Kiva loan is careful oversight to ensure your money reaches the people and causes you care about. Due diligence at Kiva is a promise — to the borrowers building a better future and to the lenders who support them.
Long before a loan shows up on Kiva.org, it not only goes through a thorough application process, but we vet our partners before we work with them. Spanning 70+ countries, Kiva’s Lending Partners include verified microfinance institutions, social enterprises, schools, and nonprofits serving low-income communities. Each partner is thoroughly screened to ensure alignment with Kiva’s mission, financial integrity, and responsible lending. And for our U.S. direct loans, Kiva conducts a series of internal checks to help ensure each direct loan borrower is eligible, credible, and aligned with Kiva’s mission. This includes verifying identity, reviewing financial history, screening against government watchlists, a peer fundraising period, and assessing both business viability and potential social impact.
Loans can be transformative
The most important part of our work is ensuring that Kiva loans have a positive impact on someone’s life. 60 Decibels, an independent social impact measurement company, surveyed over 36,000 microfinance customers in 45 countries, including over 14,500 borrowers of 55 Kiva Lending Partners. They surveyed things like better quality of life, improved sense of agency, and increased ability to handle the unexpected.
89% said their quality of life improved
87% said their income improved
70% said their ability to withstand emergency expenses has improved
81% reported an increase in confidence
67% reported an increase in savings
84% reported an increase in their ability to manage their finances
73% reported that loan repayments “are not a problem”
These results were what we expected, but it’s still a thrill to see them in numbers and to hear directly from borrowers. Together with 60 Decibels, we’ll continuously measure the outcomes, so that we are always working towards what is best for the people we serve.
Why crowdfunding?
Because change shouldn’t be gatekept by billionaires.
Too often, the power to fund solutions is held by the few and the wealthy. Kiva changes that by putting it in the hands of the many.
We believe access to capital shouldn’t depend on your credit score, connections, or country of birth. That’s why we invest in people, especially those systematically excluded from traditional finance: women, refugees, people of color, immigrants, and LGBTQIA+ entrepreneurs. Through crowdfunding, anyone from a broke college student to a Fortune 500 executive can unite to fund bold ideas and resilient leaders, creating lasting change from the ground up.
Kiva’s crowdfunding doesn’t stop at one story. While platforms like GoFundMe focus on donations and Kickstarter supports product launches, Kiva does something different: We use crowdfunded loans to create long-term impact, fueling women entrepreneurs, refugee-owned businesses, and climate-resilient farms around the world. While other crowdfunding platforms help fund moments, Kiva is funding movements.
Over the past 20 years, we’ve witnessed the power of collective action firsthand. Over 2 million people have joined together to fund over 5 million others working to make our world a better place.
We see this demonstrated in the five people who supported the first Kiva borrower, Elizabeth, back in 2005, and in the 1,685 people who funded social enterprise MPower, whose loan will provide 10,000 people with reliable solar energy. It’s not the lending that makes Kiva special — it’s the community coming together to support one another and drive systemic change.
Now you know how loans do more than move money — they unlock dignity, choice, and opportunity for people. And when those loans are powered by millions of people coming together through crowdfunding, the impact multiplies far beyond what any single donation could achieve.
This is how we build a future that’s fairer, more inclusive, and driven by people, not systems. Join us today, and let’s prove that lasting change isn’t something we wait for —it’s something we build together — $25 at a time.
