Ester is the poster child for how microfinance can grow small businesses. A mother of three and owner of a small farm in central Kenya, she raises dairy cows, grows vegetables and makes cement water pipes with a handful of employees. Many of her businesses were funded by loans from people she has never met, through a Web site called Kiva.org.
Kiva is a nonprofit based in San Francisco that allows individual lenders from all over the world to make zero-percent interest loans of as little as $25 to micro-entrepreneurs in the developing world. In return, lenders are repaid on a monthly basis, and receive at least one journal update on how their contribution has impacted the loan recipient. To date, the Kiva community has raised more than $75 million in funds from 500,000 unique lenders with only about a 2 percent default rate.