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New Ag & Food Law Community on Kiva

By Jim Chen at al.

I received a wonderful present last Spring - a gift certificate with Kiva. What better present for someone who teaches Agricultural Finance & Credit. In class, we discuss the need for capital in agricultural operations, the legal issues that arise in financing transactions, and the impact of financial stresses on farming operations. Most of the U.S. cases we study involve fairly significant sums of money.

Kiva, a non-profit micro-finance organization offers both a similarity and a difference. The similarity is the need that farmers have for financing for their businesses. The difference is that the loans needed are so small.

Kiva's mission is "to connect people through lending for the sake of alleviating poverty" and works to achieve this goal through a "person-to-person micro-lending website." On the Kiva website, you can browse entrepreneurs' profiles and decide who you would like to lend to. Loans are made through local micro-finance institutions approved by Kiva. The website provides transparent data regarding the institutions, the actual loans, and repayment track records.

During the course of the loan period, you receive periodic updates, and when your loan is repaid, you can relend to someone else.

One of my first loans was to Carmen in Peru. Here is the description that was provided to me.

Carmen is a member of the Banco Comunal Renacer. She is 55 years old, married, and has 6 children. Carmen travels to the region's different fairs to sell fruits and vegetables. She also buys cereals from the fair, which she later sells at the provisions market in the city of Ayacucho. In addition to all this, Carmen also sells wool out of her house. Carmen needs a loan of 2,000 soles, which will be invested in the purchase of wool and cereals. Carmen's dreams are to provide a good education to her children and to improve her business.

Last April, I signed up to offer a small loan; twenty-one others also participated. The total loan that Carmen needed was $675. Soon after she got the loan, she began paying it back. On October 16, Carmen paid back the last installment - $16.66, the loan was fully repaid. It is now available for making a loan to another.

My best wishes to Carmen; my thanks to the entrepreneurs that started Kiva and the organizations that keep it running so well; and my challenge to readers - make a Kiva loan to someone in the farming or food-related business.

I just set up an Ag & Food Law Community on Kiva. Anyone who makes a Kiva loan is welcome to count their loan as part of our community. All lending decisions are your own - it is just a way to show that the agricultural and food law community supports farmers and other food providers world wide. I think you will be pleased.

Full post as published by Agricultural Law on November 01, 2009 (boomark / email).