People don’t trust big business anymore, and this is why microlending is gaining popularity all over the world.

As part of our research into how microlending works, the Campus Echo took part in the process.

In four steps, we were able to help a man in Kenya expand his carpentry supplies business.

We did this through a non-profit micro-lending organization called Kiva.

In the mid-1990s, large non-profit organizations were scrutinized for their unsavory financial practices — using public donations and government funds for personal gain and benefit.

The Red Cross, the Smithsonian Institute and the Nature Conservancy were among the non-profits denounced for mismanaging donor funds. Clearly there was a need for an organization that allowed money lenders to track their money and make sure it helped someone who needed it.

That’s where micro-lenders like Kiva came in.

Kiva connects people with the resources to help with people in need. “Kiva” is a Swahili word meaning “agreement” or “unity.”

That was what founder and CEO Matt Flannery saw as the organization’s mission.

“We provide the world's first and only online micro-lending opportunity,” said Flannery.

“Kiva is all about connecting people.”

Kiva’s website (www.kiva.org) reports that it has facilitated more than $12 million in loans from 127,000 lenders.

Micro-lending is a process through which small-business entrepreneurs are loaned small amounts of money, then pay the loan back to the lender over an agreed-upon period of time.

“What’s so great about Kiva is that your money, if you choose, can be recycled to help someone else,” Fiona Ramsey, said Kiva’s public relations director.

Campus Echo staffers perused Kiva’s website and decided to loan their money to Jeremiah Miruka, a 30-year-old family man. After Miruka graduated from high school, he opened a homefront grocery store. Once business picked up, his wife took over as manager.

Miruka now runs a hardware store supplying materials for local carpenters, using the money he receives from the family grocery store. With these businesses he supports his wife and three children, aged 9, 6, and 3.

Thirty-five Campus Echo staffers pulled together $75 to loan Miruka toward his business expansion.

After collecting the money, they put it on a staffer’s credit card and sent it directly to the entrepreneur using PayPal.

Miruka will use the Kiva loan to buy products in bulk and to supply wood, paint, veneer, velvet, cushion materials and nails to local carpenters.

Periodically, we check our Kiva lender page and can monitor Miruka’s payments and the progress of his business.

Kiva’s website reports that .3 percent of Kiva’s loans default. It notes, however, that “past repayment performance does not guarantee future results.”

Lenders assume three levels of risk. Country, or macro-level risk, might include economic, political or natural factors within the lendee’s home country.

A lender also could be subject to such “field partner,” or local loan administrator, risks as bankrupty, fraud or poor business operations.

An individual entrepreneur could default due to crop failure, health issues, or faulty business decisions.

“KIVA, as a young organization, is doing everything it can to minimize all risks, but cannot completely eliminate them,” Flannery said.