One of our forumites made my day today by following the link in my signature, and signing up to Kiva. So I thought I'd tell some more of you about this amazing way to help the world's poor, just in case anybody else may be interested but not have heard of it.
Kiva facilitates regular people like you and me being able to provide micro-credit. You may have heard of micro-credit, which became well-known when Muhammad Yunus, founder of the Grameen Bank in Bangladesh, won the Nobel Prize in 2006.
Micro-credit is providing very small loans - a few hundred dollars, for example - to help people lift themselves out of poverty. Instead of "giving" charity, you lend money to people to enable them to look after themselves, through small business.
So you may be lending money for:
* a farmer to buy seed and fertiliser, or breeding stock
* a small business owner to buy new stock, or expand their product range
* tools and equipment for manufacturing
etc
You lend in bundles of US$25, which are combined with the US$25 contributions of other Kiva members, and lent out. The loans usually total US$500-2000, and the loan terms are usually between 6 and 18 months. You receive no interest. The borrower makes regular repayments, which include interest, and that interest goes to the administrator (micro-financier, "bank") for administering the loan. This is no profit-making venture for them; the "banks" are generally charitable organisations, and the interest rarely covers the full cost of administering the loans. The banks are rated by Kiva according to their administration (and thus likelihood of the loans they approve being repaid); many of them have a zero default rate. In any case, you spread your funds around in US$25 bundles, so you're unlikely to lose much in any case. When the money's been repaid in total, you can either have it back, or (as I plan to do) re-lend it to somebody else.
You do know exactly who it is that's getting your money, what they're planning to do with it, and how they're going with repayments. If the borrower has access to the internet, you may even get updates from them as to how their business is doing and how your funds have helped. Sometimes the bank will post an update on their behalf.
What I really love about micro-credit is that it provides really tangible help to people in need, whilst preserving their dignity. They're not recipients of charity; like most of us they're using borrowed funds to make a better future for their families.
Kiva facilitates regular people like you and me being able to provide micro-credit. You may have heard of micro-credit, which became well-known when Muhammad Yunus, founder of the Grameen Bank in Bangladesh, won the Nobel Prize in 2006.
Micro-credit is providing very small loans - a few hundred dollars, for example - to help people lift themselves out of poverty. Instead of "giving" charity, you lend money to people to enable them to look after themselves, through small business.
So you may be lending money for:
* a farmer to buy seed and fertiliser, or breeding stock
* a small business owner to buy new stock, or expand their product range
* tools and equipment for manufacturing
etc
You lend in bundles of US$25, which are combined with the US$25 contributions of other Kiva members, and lent out. The loans usually total US$500-2000, and the loan terms are usually between 6 and 18 months. You receive no interest. The borrower makes regular repayments, which include interest, and that interest goes to the administrator (micro-financier, "bank") for administering the loan. This is no profit-making venture for them; the "banks" are generally charitable organisations, and the interest rarely covers the full cost of administering the loans. The banks are rated by Kiva according to their administration (and thus likelihood of the loans they approve being repaid); many of them have a zero default rate. In any case, you spread your funds around in US$25 bundles, so you're unlikely to lose much in any case. When the money's been repaid in total, you can either have it back, or (as I plan to do) re-lend it to somebody else.
You do know exactly who it is that's getting your money, what they're planning to do with it, and how they're going with repayments. If the borrower has access to the internet, you may even get updates from them as to how their business is doing and how your funds have helped. Sometimes the bank will post an update on their behalf.
What I really love about micro-credit is that it provides really tangible help to people in need, whilst preserving their dignity. They're not recipients of charity; like most of us they're using borrowed funds to make a better future for their families.
