Microfinancing

[tapit]

Hey everyone- I read an article in the NYT last week about microfinancing as a way to help the world. The idea is so great it won a Nobel Prize, but until I read the article I didn't realize that an ordinary person with little cash like myself could participate. Here's the scoop. A lot of people in underdeveloped countries would like to start their own little businesses but can't get cash to begin from banks. The moneylenders charge outrageous rates of interest. Sometimes just a few hundred dollars will get them started or expand so they can be self-reliant and can hire others as well. Here's where organizations like kiva.org come in. People can sign up to lend businesses as little as $25 and be part of their success. All of the recipients are vetted by microfinancing sponsors and you get to pick who you sponsor. When all of the amounts for that person are gathered, the loan is disbursed and they can begin using the money. When they repay the loan, you can either get the money back or plough it into someone else's business. I became a lender to a tailor in Ghana and am terribly excited! Why loan instead of give? I think it may help the new businesses with self-respect and to build a credit record they may need in the future.

[Spinoza]

Just a bump because I found Kiva a very exciting project.

[wen]

i'm onboard with this all the way. yay! my partner's client bought a water buffalo for someone...the client's brother requested that he do so in lieu of giving him (the brother) a holiday present. another cool thing to do (although there are some water buffalo programs that just put the money into a general fund--this one actually delivered a buffalo). the person receiving the gift has to give something back. this guy had some chickens and so gave a chick, which will be passed on to another needy family. wen

[tapit]

Just got the word from kiva.org that the tailor in Ghana paid back his loan and I can hardly wait to plow my part of the payoff into another project. In the meantime, there was a flowershop owner in Baghdad who got his entire loan subscribed to in a matter of hours! Whoever thought of that great way to make life in a war zone a little easier? And he's paying back his loan right on schedule! Again, I highly recommend this way to be part of the larger world in a very personal way.

[lkindr]

Wow! Great organization. It appears to be just over 2 years old and the map shows that it works in a few areas of the world so far. I hope it can expand rapidly and improve its procedures to be much more effective. I'm not clear on how it accepts loans, but I'd like to be able to just send a personal check, since I don't mess with credit cards etc.

[marymary]

What I find puzzling is that microfinancing does not seem to be attractive domestically. I see no reason why these programs could not be useful here. After all, if we can use a tax "rebate" to stimulate the economy, why can there not be mini-loans for entrepreneurs? Some years ago the Small Business Administration had a very small loan program, but it was a subject of great contention, as the small unsecured loans required little documentation and thus were perceived as a great opportunity for fraud. I do not disagree with this. However, if one were to open up a program specifically aimed at micro-financing, steps could be taken to minimize the risk of fraud. The risk of loss cannot be minimized, given the nature of the loans. Nevertheless, for the loans that pay off, the payoffs are extraordinary. My favorite social entrepreneurship project involves a gift to African women that enabled them to create products that allow them to be self-sustaining. More can be found here: http://usinfo.state.gov/af/Archive/2006 ... 03306.html BTW, I have no affiliation with this organization at all except that its principal founder is an alumnae of my undergraduate school.

[happykat]

I've just joined and given my loan:)

[sallypz]

I have read somewhere in the past year(can't remember the source) that micro-finance is coming to the US also. From what I read microfinance is often targeted specifically at women wanting to start a small business. I think it would be a great way to help start to turn around the economy. Kiva (original meaning a religous structure used by the pueblo indians) is a great organization. I hope more organizations like kiva start up too. It's a great way to give back to the world. People helping people. sallypz (MoxieMe)

[FallenAngel]

I just gave out three $25 loans through Kiva. Thanks for bringing it up.