We all face many challenges in operating a small business, especially in today’s economy. (I’m really looking forward to the day when I no longer have to use that phrase!)  And few shops are so flush with capital that they always have enough money on hand for expenses and inventory.  So you may think it odd that I am going to suggest that you help finance someone else’s store — but I hope you’ll be willing to consider doing just that.

What may appear to be a very small amount of money to us as American businesses owners may be considered a significant loan in a third world country. There are many organizations, including Finca and CARE that make what are called “micro loans” to help small businesses.  One of the best known organizations in this field is Kiva, based in San Francisco.  In the past 5 years, Kiva has facilitated almost $150 million in loans to small businesses, many of them women retailers, in over 50 countries.

Since the average loan from Kiva is under $400, it is clear that it doesn’t take much to make a difference in the success of these small business owners.   And an astounding 98% of the loans are paid back in full.

Take Ronabee Nomat as an example.  She sells fish, shrimp, and crab from her own stall at the Dalipe market in San Jose, the capital of Antique Province in the Philippines.  She applied for a Kiva loan to buy more inventory for her business. When Ronabee started selling fish, she was a street vendor; hard work and perseverance won her a place in the town’s largest public market. In 2009 she received a loan of $525 from Kiva, and one year later she had repaid it in full. 

One of the things I like best about Kiva is that when you contribute to the organization, you are literally loaning out the funds — and at the moment there are over worthwhile 1,100 projects to consider. Not only do you get to select what country and business you are supporting, but you get regular reports of repayment.  And when the loan you’ve supported is repaid, you get to loan it out again.   Our family has made loans to shops in Senegal, Nicaragua and Azerbaijan using the same $25.

That’s right: the suggested loan amount to support a Kiva project is $25.  Take a look at your store’s budget, I’m sure you’ll be able to find that much money somewhere.  (If not — and if you’re looking for a loan yourself —  you might be interested to know that Sam’s Club has just announced that it will be making loans to its small business members, targeting minorities, women and veterans for loans of $5,000 to $25,00.) If you can afford the $25, think of how satisfying it will be to know that it’s being used by a sister retailer in some other part of the world to grow her business, just as you work hard to grow yours.

Happy Retailing,

Carol “Orange” Schroeder