Kiva couldn't enter India earlier due to strict Reserve Bank Of India regulations, that require loan funds sent to non-government micro-finance institutions to remain in the country for at least 3 years. With lenders around the globe, this, of course, would be a problem.
Kiva has finally figured a way around these rules, by letting its field partners hold on to loan funds for the minimum 3-year term before sending repayments back to the lender. This may discourage some from lending money to Indians, as they won't see their money for three years, but that's a trade-off that the organisation has been forced to make. Kiva, on its part, has promised to recycle the funds to other local borrowers, instead of it lying idle with the partner entities.
Premal Shah, President, Kiva, said, "With more than 32 per cent of India's population falling below the international poverty line and 68 per cent living on less than US$2 a day, the country is in dire need of responsible, affordable sources of capital. India has a complex history with micro-finance, leaving many financial institutions unable or unwilling to serve poor and socially-excluded borrowers. Recognising this need and opportunity, Kiva wanted to give the global lending community a simple, ethical channel to support India's most geographically-isolated, underserved and vulnerable groups.”
Kiva, founded in October 2005 as a non-profit registered in the US, boasts of an impress repayment rate over 98 per cent over the last 6 years and has helped crowd-fund over $340 million in loans for 840,000 borrowers in 63 countries. Kiva was founded on two basic principles - first, people are generous in nature, and, given a chance, will help others. Second, given the right resources, people will lift themselves out of poverty.
Kiva functions on the principle of crowd-sourcing, where anyone in the world can extend a loan to a person in need. You get to choose a borrower - Kiva provides a small profile of each prospective borrower to help you choose - and you get periodic updates about the progress of your loan, including repayments as they become available.