Monday, April 23, 2007


I've decided to enter the world of microfinancing by signing up with Kiva. I really like the concept of providing seed money to someone who posses the desire and drive to better their lives, but lacks the financial ability to start their own business.

Picture a mother of three working endless hours sewing beads on a dress for a global conglomerate in a third world country. She makes so little income that she struggles to feed her family. Then ask yourself, "If she had her own material and equipment, could she raise her standard of living and provide a better opportunity for her children?" She may not have any way to get a loan as she has little collateral to offer or a bank's refusal to loan to women, or she is illiterate and cannot complete the required paperwork. We know she posses the skill to do the job, doesn't she then deserve a chance to succeed?

Enter the world of micro-financing. I can loan an underprivileged individual that has a true desire to improve their lives some money to purchase that sewing machine, tools for auto repair, a refrigerator to store their produce. They get the seed capital, the responsibility of re-payment, and a vote of confidence that they can improve their situation. Studies have shown that small loans, with set terms have an extremely high repayment. (In Kiva's case 100% repayment, but the Micro-finance industry as a whole has a repayment rate of 97%)

Kiva handles the paypal collection of money for me, I can fund in increments of $25 my Kiva account. Then I can browse or search the Kiva listing of individuals that are seeking the loans. Once distributed to the recipient, Kiva provides updates on the status of the business the individual is using the loan for. I get re-payed once the loan term has completed.

I don't make any interest on the transaction, and its not considered a donation so there is no tax break, as slight as that may be anyway. I just feel good that I'm trying to do something.

You check out my lender page if these types of things interest you.

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