by Margaret Heffernan - Wednesday, 26th September 2007 - 2 comments

Another early memory is her first pair of new shoes – at the age of 15. Born in Jamaica, at 25 she came to the UK, where she qualified as a midwife at King’s College, London.

Yvonne isn’t the kind of person who springs to mind when you think of the investment community. She isn’t a City slicker, she doesn’t have an MBA and she doesn’t hang out with VCs.

Yet she has participated in bringing over 200 new businesses to life.

She’s done this through Kiva. It’s what’s called a peer-to-peer lending site. Kiva.org features businesses throughout the developing world that need funding – and it takes in money from all over the world to provide it. Field partners vet every business plan and then administer the loans and report progress.

As of August 29 this year, Kiva has funded more than 15,000 businesses, with loans totalling in excess of $10m. Ninety-eight per cent of those loans are fully repaid. The average time it takes to fund a loan is 1.24 days – and the average term of a loan is a mere ten months. These are numbers that should stop high street bank managers in their tracks.

What’s particularly exciting about Kiva is that lenders come from everywhere. Because the minimum loan is as little as $25, thousands of individuals have become investors in entrepreneurship.

As Fiona Ramsey, Kiva’s PR director, told me, this has democratised investing. “We have lenders on disability pensions who can’t afford to donate to charities. But they can loan, knowing they’ll get their money back.”

Investors get regular reports, and some of them even travel to the companies they’ve helped to create. Currently, more than one million new investment dollars come into Kiva every month.

“The people on Kiva aren’t asking for handouts,” says Yvonne. “They’re just asking for help to get a step up the ladder. And when they’ve had help, in the future they can be in a position to give help back.”

Kiva isn’t the only peer-to-peer lending site. Zopa.com aggregates individual lenders to make money for it, as though it were a bank, while Prosper.com is more focused on individuals trying to consolidate and pay off debt.

What makes Kiva stand out is that it is focused on building new businesses in the developing world. Its founders understand that business is a powerful and sustainable way to change the world: it creates jobs, encourages communication and develops skills.

The government knows this, too, which is why it keeps looking for ways to raise levels of entrepreneurship in the UK. But too many of these efforts have been unentrepreneurial, preferring documents and think tanks to real, live action.

Why can’t we have a Kiva here for UK businesses?

I’ve visited desperate inner-city communities – in Nottingham, London, Bristol – where the tiniest seed money could start to make a real difference. Venture capitalists couldn’t make enough money out of them and angel investors live in a different part of town.

But what Kiva offers has a dual benefit: it helps to build businesses while helping to engage a far wider community in the world of business. And these communities emerge with a view of commercial life that, for once, isn’t narrow, mean and cynical.

“I’ve been talking to my colleagues at work about each of us contributing a pound a month to Kiva,” Yvonne says. “We’d need 12 people to invest as a group and then we could discuss which businesses to back. A pound a month – that’s like spare change!”

I think most people in the world can relate to business – and the business world would be better off if they did. Yvonne had no experience of business when she started investing. Today, she has a portfolio of more than 200 companies. Professionally, she’s a midwife, but she’s giving birth to a lot more than new babies now.

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