Frequently Asked Questions


What is Microfinance?

Made popular by 2006 Nobel Peace Prize Winner Dr. Muhammad Yunus of Bangladesh, microfinance is a method of alleviating global poverty through the funding of small loans to struggling entrepreneurs in impoverished countries at little or no interest. Loans are paid out to borrowers who are not able to get loans through other resources such as banks for various reasons. These loans are paid back gradually, usually in parts, according the borrower's repayment schedule. The recipients of these loans use the funds to continue or expand their business that will lead to an economically independent lifestyle in which they can effectively support themselves and their families.


The Global Microfinance Foundation believes that microfinance is an effective way to support struggling entrepreneurs around the world and promote sustainable economic practices. Microloans do not encourage external economic dependency the way direct donations can because loans are only given to those who have established business and repayment plans guiding them to achieving their goals. In addition, because the funds used to make a microloan are eventually returned, donations can be put to work repeatedly.


How do the donated funds get into the hands of the borrower?

Once funds are donated to the Global Microfinance Foundation, they are then transferred to Kiva, another microfinance foundation, in the form of  "Kiva Credit". Kiva is simply the medium that opens the Global Microfinance Foundation to the market of those who need a microloan. The usage and movement of our funds through Kiva are completely in the control of the Global Microfinance Foundation at all times. Once we find a loan that we would like to fulfill, Kiva sends our money to one of their field partners. Kiva field partners are employees of Kiva and are the "messengers" between the recipient of the loan and the donor. The field partner will bring the recipient of the loan the funds that the Global Microfinance Foundation donated to him or her and will also periodically check in on the recipient of the loan. Once the recipient's business has become self sustaining, in the manner specified in the repayment outline that each loan applicant provides, the field partner will collect the funds and return them to the Global Microfinance Foundation in the form of Kiva credit. Once the funds are returned, the Global Microfinance Foundation has the option of either keeping the money in form of Kiva credit and using it to fund another loan, or withdrawing the funds and having them returned to our bank account.