It’s not every day that you would associate the title “money lender” with a 16-year-old. But for Saloni Gupta, lending is something more than just helping out. As a 10th grader in The Harker School in San Jose, California this young Indian American heard about the microfinance Web portal, Kiva, from her school’s Global Empowerment and Outreach Club. It changed the way she viewed money. Starting early last year, Gupta’s involvement has been a sustained one, and on July 15, 2010 she made her 100th loan.
“I feel like I have made a tangible impact and have helped alleviate some amount of poverty in the world. Even though I have made 100 loans, I want to encourage 100 others to make 100 loans, creating an avalanche effect,” says Gupta.
Microfinance, which involves making small loans to poor people who can’t get loans from banks, came into focus when the Bangladesh-based Grameen Bank and its founder, Muhammad Yunus, won the Nobel Peace Prize in 2006. He proved that microfinance could change the way development works and that the poor are indeed credit-worthy.
“I was instantly hooked onto the idea,” says Gupta, “and did a lot of research. I looked for a platform where I, as a teenager, could involve myself. I came across various organizations such as the Grameen Bank and finally, Kiva. I was instantly interested in Kiva because of its reach and convenience.”
Kiva, based in San Francisco, California, was set up in 2005 to enable people who want to help those most in need. It combines microfinance with the power of the Internet and allows individuals to lend to entrepreneurs across the globe. As Gupta explains, “Lenders around the world go to Kiva’s Web site, where they choose entrepreneurs to lend to. Kiva works with local microfinance institutions that disperse the loans and collect entrepreneurs’ repayments. The institutions send that money back to Kiva, which then repays the lenders over the course of a few months. Over $150 million of loans have been made through Kiva. More than 375,000 entrepreneurs from over 50 countries have received loans through Kiva.”
Today, as an intern helping to expand the Kiva High School program that reaches out to schools to spread the message of microfinance and establish active chapters, Gupta works hard to encourage others to make a great impact with a small amount of money.
||Fabric memory boards sold by Saloni Gupta through her handicraft business, Cherish. Gupta uses the profits to give loans to women entrepreneurs through Kiva
Born in Bhopal, Madhya Pradesh, Gupta immigrated to the United States with her family in 1995.
As one of Kiva’s youngest members, Gupta lends to women entrepreneurs in developing countries. Occasional birthday gifts and profits from her handicraft business, Cherish, have enabled her to raise capital to lend. Gupta started Cherish in 2009 by making memo boards for friends.
Gupta’s reasons for supporting women are clear. “A woman is not only an anchor for her family, but also for humanity. The combination of women and entrepreneurship can change societies in the developing world in powerful ways. Considering the social, economic and political obstacles disadvantaged women have encountered throughout history, empowering women is necessary now more than ever in a world that is still ravaged by wars and populated by the impoverished,” she asserts.
Choosing microfinance rather than any other voluntary or charity work was a conscious decision. Gupta explains, “Micro lending helps struggling entrepreneurs expand their businesses and promotes sustainability. Donations, done with the best of intentions, only provide relief and improve short-term situations. A microloan to an entrepreneur can often ensure prosperity for life. If you give a woman a fish, you feed her for a day. If you give her a loan, you give her a fishing pole, a stand at a local market, food for her family for life, and a perpetual boost for the nation’s economy.”
Choosing whom to give to is an important decision and Gupta decides with care. “I usually loan to women who ask for less than $1,000 and with short repayment terms so those loans are repaid faster and I can help more entrepreneurs. Since I earn all my money for my Kiva account myself, I reduce the risk of my loans being defaulted by lending to entrepreneurs with MFIs [microfinance institutions] with four- to five-star field ratings to increase the probability of repayment. Sometimes, I am so moved by someone’s story that I disregard a few of those guidelines to help someone who truly impacts me,” she says.
LOANS AND MORE
A hundred people may be “indebted” to her but Gupta says, “The very first loan I made to Janet Akyem in Ghana remains special. She wanted to buy bags of flour for her bakery and supplement her family’s income. She sought to pay her children’s school fees and provide a future for them with an education. Since she was the first entrepreneur I lent to, I was always excited to see her repayment installments and was eager to see that her business was benefiting from my efforts,” Gupta says.
Though Kiva has not started work in India, Gupta hopes that loans to Indians are a “development that will arise on the Kiva Web site in the future. I would be very excited with the opportunity to loan to Indian entrepreneurs.”
Though the impact both lender and borrower make on each other’s life can be significant, no personal friendships are formed. “Kiva Fellows and MFIs communicate with lenders during the repayment process and sometimes do send updates after loans have been repaid,” says Gupta.
Of course, there is always the fear of borrowers defaulting on a loan. “Favoring quantity over quality, I lend smaller amounts to many entrepreneurs rather than committing hundreds of dollars to a certain individual,” she explains.
With school and Kiva, the going can get a bit tough sometimes but Gupta says, “Finding time to pursue a passion is not a chore, but a pleasure. Making memo boards provides a creative outlet and microlending provides gratification. I am learning about entrepreneurship and economics in a real-life, hands-on way, which complements my academic environment.”
Her advice for young people who want to help but don’t know how or doubt if they can make a difference is simple. “First of all, how you make a difference is not nearly as important as realizing you want to make a difference,” she explains. “Once you have determined that you want to help people and commit to it, finding what you want to do is easy.”
Her career at Kiva has taught her some important lessons: “I have realized that a small amount of money can be life altering to millions of people around the world. Receiving feels good. Giving is better. Empowering is indescribable!”