Kiva

Check out Kiva. It’s an organization that provides small (300-500 dollar) loans to poor individuals in Uganda for the purpose of improving the individual’s business. Kiva allows individuals to lend money in $25 increments, to be repaid later, without interest.

Perhaps the most amazing part is that none of the loans have defaulted, yet. Journals are kept about the progress of each business, so that the effect of the loan can be seen by the lender and the general public. I’m spreading the word about them because they seem to have a really good idea for improving the life amongst the poor in a way that does not encourage dependancy on charity. This isn’t me asking you to lend money using this system. Do whatever you want. I just think it’s an excellent idea, and I’d love for you to at least tell other people about it. Generate some buzz!

  1. I caught most of a PBS show on “microloans” a couple days ago which delt with roughly the same topic. Many of these were as small as a few US dollars, and the part of the show that I remember delt with distributing them in India. As I remember, though, they were charging interest but a very small amount, and then the interest went into increasing the capital the (nonprofit) groups had to distribute. They were talking about repayment rates of above 95%.

    An initial motiviation for one of the groups the show was focusing on was that it is a common practice for suppliers of raw materials to make a “loan” to craftspeople who produced goods using those materials. However, to repay the “loan” they had to sell the finished goods back to the person supplying the raw material, for a drastically lower rate than they’d be able to get elsewhere. In one particular case, literally $0.25 was enough to get this individual out of that trap.

    I wish I remembered more details, but it was on at 2AM and I was only half paying attention because I didn’t think it was going to be interesting. By the time I reazlied it was, I had missed a good bit of it.

  2. There have been a lot of good articles in the CS Monitor on microloans (Unfortunately, most of them are now in the archive and cost $$). You can probably read up on them in other news archives as well. I think it’s awesome.

  3. I’m amazed that it takes so little to do so much. I wish Kiva was accepting money right now. I guess if they lower their application process too much, the would have less successes…

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