Microlending Through Kiva.org
Microlending really came into its own in 2006. Muhammad Yunus and the Grameen Bank won the Nobel Peace Prize for their efforts to “create social and economic development from below.” The basic idea behind microlending is that if you provide a loan for as low as, say $10-$50, you can provide an impoverished person with the money to start a grocery, barber shop, tailoring service, or any other enterprise, and so promote the well being of both the borrower and his local community. Most of these people and communities have either been ignored by commercial banks or their home countries do not have adequate banking systems. This is not charity. Repayment rates are better than those experienced by a lot of credit card or finance companies. Some banks discovered this and are now starting their own microlending departments.
Now you, too, can become a microlender and, for as little as $25, directly help a specific entrepreneur lift themselves out of poverty. Kiva.org has established relationships with microlenders around the world. Specific business proposals are presented on the website, and you chose exactly the businesses you want to support. Processing is handled through paypal. Kiva is a non-profit organization and your loans won’t earn any interest. Still, this is not charity, and you can watch the success of the endeavors you support unfold through monthly updates.
Thanks for the link to kiva.org! Love the books project, too.
NICHOLAS D. KRISTOF made the same comment in his column in today’s New York Time. “You, Too, Can Be a Banker to the Poor.”
Update from the editor: bend of bay put a little money into kiva loans at the end of 2006, when this post was written. So far not a single payment has been missed. That’s right, zero delinquencies. Repayments will be used to make new loans.
Update from the editor: Our Kiva borrowers have never missed a payment and we continue to make new loans from the same initial pool of cash.
Update from the editor: Any commissions received from amazon.com for sales of items linked to our pages will be used to make new loans.
buy now
In spite of the global economic meltdown, all our kiva borrowers continue to pay on time. As loans are repaid, we re-lend the money to other borrowers.
Still no losses. Not a penny! Commissions from links on our pages are used to make new loans.
Still no losses!
We received a few comments asking how we decide which Kiva borrowers to lend to. First, we rely of Kiva to present only those deemed eligible. While each request is described, we try to eliminate any bias by selecting borrowers with a random number generator. It works like this:
When you select “lend” on Kiva, you are taken to a list of borrowers needing money. At the end of the first page, it tells you the number of pages of listings there are. Today, for example, there were 138. We use a random number generator to select a page. Each page contains 8 listings, and we use a random number to make the final selection. That is all there is to it.
By the way, to generate the numbers we use the program Andrew Culver developed for John Cage. He makes it available as shareware here:
http://www.anarchicharmony.org/People/Culver/CagePrograms.html
We are coming up on 5 years with Kiva – and we still have never lost a penny!