Thursday, August 7, 2008

Kiva Loan - Repaid!

At the beginning of last month I wrote about Kiva and being a lender for that non profit organization. This week I have gotten two fantastic emails about my two loans at Kiva.

The first was that one of my loans was completely repaid. I chose to lend $25 dollars towards a loan taken out by Grace Cramson in Cape Coast, Gahana. Here is information about her business from the journal on her loan page:

Grace Cramson runs a very beautiful restaurant. Its views look up into the surrounding hills covered in palm trees and vegetation. Grace used her loan to increase her product line as well as stock up on beverages. Demand at her restaurant has slightly fallen off, but she plans to change this by installing speakers to play music to attract potential customers walking the street. Customers have been suggesting this to her for quite some time, but now she plans to take their advice. Between this loan and the next loan, she plans to take; she hopes to be able to save enough money so she can buy the restaurant outright. She currently rents the land, but her dream has always been to own it herself.
Now that the money has been repaid, I have several choices. I could re-lend these funds to a new entrepreneur, withdraw them into a PayPal account or I could donate them to Kiva's operational expenses. Even though I am struggling to make my ends meet, when read the bios of the people seeking loans, it is an instant reminder that my life is pretty darn good. Though it would be easy for me to withdrawal the money and add it to my monthly totals, I plan instead on finding another loan to help fund.

The second notice was that Sopheap Chea, who took out a $1,000 loan to expand her scarf weaving business in Cambodia, made a $50 payment on her loan, bringing the amount she has repaid up to $300. Her loan has a repayment term of 20 months, to be paid monthly. Here is a bit from the website:

Today we drove out to the Kean Svay district of Kandal province, a rural area approximately thirty minutes outside of Phnom Penh, to meet with Sopheap and hear how her business was doing since she received her Kiva loan. Even though business has been very slow, Sopheap continues to work hard weaving kromas, or traditional Khmer scarves, and has managed to consistently repay her Kiva loan on time.

Sopheap needed a Kiva loan several months ago because she and her husband had just spent a large amount of money renovating their house. Sopheap’s aging mother lives with them and the couple wanted to build a toilet for her, as the other one was too far away and a strain on her very weak knees. After this was completed they had little left over to purchase new threads for the couple to weave. They were very appreciative of their Kiva loan, which allowed them to continue their business as usual.

With her Kiva loan Sopheap had planned to expand her business weaving kroma by using the capital to purchase new thread and invest in a fourth loom, hoping to increase her production. She was able to purchase both of these as hoped but has in the past month or so seen a decline in the demand for kroma. Sopheap works through a middleman, selling her finished products to him to resell in markets and other villages. The beginning of the nation-wide legislative lection season a few months ago saw a spike in demand for kromas, as various parties purchase them and give them to potential voters in exchange for their support. However, the waning of the election season has brought with it a decline in the demand for kroma, and the middleman with whom Sopheap works has significantly decreased the number of Sopheap’s kromas he is willing to buy.

Sopheap is worried about the coming months and hopes that business picks up again. However, she recognizes she might need to move into a more lucrative industry and is already considering alternative businesses, such as preparing and selling food to sell to workers at a nearby garment factory, if she feels that she can no longer support her family through weaving. Regardless of the line of work she chooses, she hopes to make enough money to continue sending her children to school so they can someday pursue university educations.

I hope her business turns around!

Related Links and Articles:

- Why I am a Lender at Kiva
- Forbes Magazine: When Small Loans Make a Big Difference
- Wall Street Journal: Microlending for Microbankers

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