A LITTLE GOES A LONG WAY
Lakeridge students tackle world poverty by making loans through Kiva, a non-profit co-founded by alumni Matt Flannery
Knock, knock, knock. Dogs bark, then silence.
Lakeridge High School students Max Heninger and Jason Cook stood before a stranger's door on a recent school day and waited for a sign of life behind it.
They straightened their posture, shifted the bags on their backs and took a breath to calm their nerves.
With a product to sell, they were on a mission - but as the papers in their hands indicated, this was not your typical school fundraiser.
And on that day, they weren't just teenagers. They were a part of a new generation of philanthropists.
Finally, after visits to several empty houses, residents began to emerge; one on her way to pick up her son, another dressed in his bathrobe.
Heninger and Cook explained that they're members of the Lakeridge Model United Nations Club and that they're selling $20 coupon books to pay for micro-loans to help small business owners in developing countries. The loans, they explained, are meant to empower their borrowers to lift themselves out of poverty. And because they're repaid over time, the loans can be distributed again and again to help an infinite number of people.
'We'll also take donations big or small,' Heninger added with a charming smile.
Some residents bought the books; others politely declined. By the end of their three-hour trek, the 120-member club returned to Lakeridge with about $400.
The students plan to raise $2,000 during the coming weeks, then turn around and hand the money to Kiva, a non-profit based in San Francisco that helps distribute the micro-loans.
With that much money to lend, the potential to help others seems endless.
For Marcia Reyes, a retailer in Ecuador, it could mean a more diverse array of products. For Djeyhun Abushov, an auto repairman in Azerbaijan, it could mean tools to repair radiators.
'The project is to get (students) thinking in a broader perspective and turning their eyes to the needs of the world,' said Ryan Rosenau, Model U.N. Club advisor.
More and more lenders are jumping on board Kiva, which connects them through 'field partners' to entrepreneurs in 37 countries.
The minimum loan that can be made is $25, while some loans have exceeded $200,000. According to Kiva, the average loan size is about $100. To date, about $14.4 million worth of loans have been made through 142,743 lenders.
What started out as a hobby for founder Matt Flannery - a 1996 Lakeridge graduate - and his wife, Jessica Flannery - a Pennsylvania native - has turned into more than they ever predicted. Kiva is a huge hit: the Flannerys have recently appeared on The Oprah Winfrey Show, CNN, BBC, The Today Show and in major magazines and newspapers from around the world. President Bill Clinton even wrote about Kiva in his latest book, 'Giving: How Each of Us Can Change the World.'
'It's amazing, overwhelming,' Matt said. 'I keep realizing it's something much bigger than myself.'
Three years ago, Matt and Jessica Flannery were newlyweds in Africa meeting people who were able to sleep on mattresses instead of dirt floors, afford sugar for their daily tea and buy fresh fish for family dinners. The Flannerys soon realized that their concept of life in poverty wasn't accurate. They kept running into business-savvy residents who generated enough profit to create an impact on their standard of living. They wondered: How do we connect business owners in Africa with start-up capital?
'We wanted to help people enter the financial world because most of the world is left out of the global economy,' Matt explained. 'It would be like living in Lake Oswego and not having a credit card, savings account, insurance or a place to keep your money. Most of the world doesn't have that.'
So, without much start-up capital themselves, the Flannerys began meeting with microfinance, economy and Internet experts. They combined Matt's experience working as a computer programmer for TiVo with Jessica's experience working in the non-profit sector.
In 2005, seven businessesmen from Uganda were posted on the Flannery's new Web site, Kiva.org, for a combined loan of $3,500. Six months later, the loans were repaid and Kiva was up and running.
The site, a crucial element of Kiva's success, facilitates instant, one-to-one connections that were previously prohibitively expensive.
The individuals featured on Kiva.org are real people who need a loan and are waiting for socially minded individuals to lend them money. Lenders can choose whom they wish to help, see the person's face, get to know them on a personal basis and watch their loan go to work.
'Technology has removed a lot of the barriers between people,' Matt said. 'Some people spent many years giving money to charity and watching it go into a black hole. It was disempowering, like the need was endless and your money wouldn't make an impact.'
Here's how it works: Loaners can choose a business to 'sponsor' through Kiva.org. Kiva's micro finance field partners around the world choose borrowers, many of whom are women living in rural areas.
Loans as little as $25 can be made with a credit card through the PayPal system. The loans are distributed through the field partners. Throughout the course of the loan (6 to 12 months), lenders receive updates from the sponsored business owner.
When the loan is repaid (Kiva's repayment rate is about 99.75 percent), the lender can choose to withdraw the funds or re-loan to a new business.
Two-thirds of the time, the loan leaves the business owner in a better place and a better level of development than when they started, Matt said.
'Our money goes 10 times further in Africa,' Matt said. 'So imagine what someone could buy for $250.'
Today, Kiva employs 20 people, including Matt's friend, 1996 Lakeridge graduate Chelsa Bocci. The Flannerys spend most of their time traveling to events and conferences to spread the word about Kiva.
'We learned on the fly,' Matt said. 'We learned as we went and we made some mistakes.'
Times certainly have changed.
'I haven't had to do a lot of selling,' Matt said. 'The interest is growing faster and faster than we imagined.'
Matt, a Stanford University graduate, was happy to hear about the Lakeridge effort. He was a little humored by it, too.
'At Lakeridge I was sort of a screw-off, a prankster, a geek,' he said. 'It's funny to have started something that's accepted there.'
The Flannerys are preparing to take a much-needed vacation to catch up with friends and family. When they get back to their office, they plan to boost their borrower base as support for their cause - even in Lake Oswego - continues to gain momentum. Kiva expects to facilitate $100 million in loans by the end of 2008.
'The job combines a lot of things I care about: technological innovation, connecting people, alleviating poverty,' Matt said. 'It's been fulfilling, but it's also kind of stressful.'