Thursday, December 21, 2006 - Microlending is changing the world!

Kiva - loans that change lives
Nearing the corner of Christmas, I feel compelled to talk a little about an organization I truely think is doing something to help others. I am not the only one who shares this idea. Recently this year, the Nobel Committee awarded their Peace Prize to Yunus Grameen for microfinance. Although lending to the poor is not new, including 'microfinance,' Kiva's approach seems ripe with 'Web 2.0'

From their webpage, you can donate in $25 dollar increments to an enterprise of your choosing, thus creating a portfolio. Each profile is rich in learning of the prospective borrower's business, although no detailed business plan is available. What I feel is effective about the way Kiva operates lies in it's torrent-like way to garner money.

On their site you can create a profile which is showcased with others on the entrepreneur's profile page. Also included, once the borrower is fully funded, is a journal in which they update you on their progress and 'prosperous' business. Once they pay the borrowed amount in full, you will be credited back with the original amount of money you invested, which you can withdrawl or reinvest into another business.

What I feel unique about giving this way is that you feel connected to the borrowers although you are thousands of miles away. Kiva presumably spends a lot of time finding the right partner lending institutions to disperse their funds where the loans are low interest from qualified borrowers. Here is their due dilligence on choosing 'Field Partners'

So if you are in the giving mood, have a paypal account or credit/debit card and $25 dollars, you can give a far reaching gift that will have an impact on someone's life, possibly whole families.

A few cautions:
  • Kiva claims 100% repayment so far and say to diversify your loans to more than one organization rather than all into one business.
  • If repayment is not made, it is not tax deductable since it is a loan and you will not get your money back (although you should treat it as a donation)
  • There is no interest gained on this investment

Please do not let these cautions sway your decision to give, if not in something that you believe in!

Empowerment. Sustainability. Hope.

No comments: