In a poor Kenyan neighborhood, Samuel Muregi Wanjiku can buy more maize meal for his retailing operation today, thanks to a senior-class project at Wheaton Academy in Wheaton, Ill.

During the 2009 spring semester, a student leadership group organized a "Badminton for Kenya" tournament and other fundraisers. They netted over $14,000 for loans to Wanjiku and dozens of other African entrepreneurs.

The Christian school donated the funds through OptINnow, a micro-lending site started last year by Opportunity International (OI). The Christian non-profit specializes in small loans (average for first-time borrowers: $181) to business owners in 28 nations.

OptINnow's existence demonstrates the "Kiva effect"—the impact created by, the four-year-old, Internet-based lender.

Kiva, established in 2005, has democratized microfinance with credit-card-fueled donations of $25 to $200. The San Francisco-based organization popularized the concept of peer-to-peer loans by posting stories of entrepreneurs, a high-tech version of child sponsorship first used by Save the Children.

Founded by Jessica Jackley and Matt Flannery, Kiva took off after a 2007 endorsement from former President Bill Clinton on Oprah. By the end of 2009, Kiva expects to have loaned a total of $110 million through field partners in 49 countries.

Though Kiva is not a Christian-based organization, Flannery said his faith and childhood experiences of service had a major impact on his desire to start the project. Flannery and Jackley met at the 2000 National Prayer Breakfast and coordinated their first loans through a pastor in Uganda. (Jackley now sits on OI's board of directors.)

Not only did Kiva stimulate OptINnow but also a site recently launched by World Vision. A month after its September 9 debut, had raised $10,000 with no promotion, said Tim Sawer, executive director of channel recruitment.

"Most microfinance [previously] took place on the macro level," Sawer said. "What [Kiva] did with connecting people with entrepreneurs was amazing."

Opportunity International marketing vice president Ruth-Anne Renaud said Kiva "has served as a springboard for increasing awareness and engagement."

OI, which has a loan portfolio of $800 million, hasn't released any figures for OptINnow's first year of fundraising.

Kiva, with a loan portfolio of $24 million, uses a number of ministries as partners. World Relief's Cambodian arm raised nearly $3.5 million over 41 months through the site, said Gareth Evans, director of economic development. That represents nearly eight percent of World Relief's $45 million in outstanding loans.

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"They're definitely not a threat," Evans said. "This is one of the most exciting ways we can engage with the church and bring in funds for microfinance. It complements our work."

Hope International president Peter Greer compares Kiva to Expedia and Travelocity. Just as the popular travel sites book seats for airlines, Kiva helps direct funds to microfinance institutions, he said.

"They're the connector, not the implementer," said Greer, whose book on microfinance (The Poor Will Be Glad, Zondervan) released in November. "They've introduced a wide audience to microfinance and raised funds that we receive for no percent interest and repay as the loans become due."

Kiva has attracted attention outside the religious community, too. Its corporate supporters include such names as Google and YouTube, while affinity groups range from atheists to gays to Masons. In mid-October, the atheist "team" became the first to pass the $1 million mark in loan funding.

"We weren't seeking different lending teams," said Kiva public relations director Fiona Ramsey. "We have a very open platform where people feel welcome to participate."

Kiva's influence extends beyond microfinance. Compassion International program director Bill Keen said one of Kiva's advancements is linking like-minded groups via social networking sites. Compassion, known for child sponsorships in 25 countries, is testing that principle with a site that will enable child sponsors to form similar networks. In addition, the ministry may start posting stories of projects its 5,000-plus church partners are involved in.

"It would be for specific activities, such as a church that needs a playground or a water well," Keen said. "We'll make that visible and there can be a grant given toward that."

However, he added that direct linkages can have a down side, such as opening the door to requests from the recipient for additional loans or other aid.

Kiva also received criticism recently from David Roodman, a fellow with the Center for Global Development, for its common practice of funding loans before investors send any money. That isn't unusual, though; Opportunity International does the same thing.

Russell Mask, a microenterprise researcher at Georgia's Covenant College, said institutions lose the confidence of existing borrowers if they wait on outside funds to arrive. And failure to process loans speedily will result in defaults, he said.

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Mask, who once worked in microfinance in East Africa, said Kiva has established systems of accountability, ratings, and assessment for its loan partners that could affect Christian microfinance groups. And its site enables Christians to determine partners' faith background as they make investment decisions.

"Most people that are Kiva lenders won't look at that," said Mask, "but I guarantee you I do, and people who know finance do."

Related Elsewhere:

Kiva co-founder and CEO Matt Flannery this week wrote a blog post attempting to correct "incorrect assumptions and some misunderstandings" about the organization.

Previous Christianity Today articles on microfinance & money and business include:

Microfinance, Now More Micro | Hit by the credit crunch, lenders anticipate fewer loans to the poor. (December 7, 2008)
From Hand Out to Hand Up | Three Arkansas entrepreneurs are helping build Rwanda's largest bank for the poorest of the poor. (November 1, 2007)
Small Loans, Big Goals | Nobel Prize boosts growing microfinance ventures. (November 20, 2006)

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