Become a Microlender?

Kiva is one of my new charities. [Global Giving], Give Meaning, and Oxfam are the others. Except Kiva is not a charity, not really. It’s a way each of us can loan a small amount – $25 – and the amounts are pooled into a microloan to someone trying to pull themselves out of poverty or improve their situation by entrepreneurship. A lot of these businesses are already solid, growing concerns, that just need an influx of funds. You can’t run a convenience store, if you don’t have money to expand your product line. In some of these countries, it’s all about just being able to get the initial stock. Most loans are paid back, you get your money, and you can take it away again or reloan. It’s a great system.

Coupled with direct charitable giving (e.g. the method of Global Giving and Give Meaning) and indirect charitable giving (e.g. Oxfam), Kiva can be part of a portfolio of benevolent activity. The interest rates the lending partners (to cover the cost to process and collect on the loan) charge, vary from country to country. Some are crazy high, and I won’t lend through those – I have a personal limit I’ve set on interest, although one should expect high interest on these loans – the risk to the lending partner is high, and these rates are far less than the local loan sharks some businesses are forced to turn to. But I still have a limit. I figure if credit card companies in the US are charging 30% on some balances, I can expect to see that in some of these countries. I’ve seen it as low as 6% and 12% though, and those make me happier – I jump on them when I see them.

Update 12/20/2008: Advanta now has a [Kiva mastercard]. I love it. As I use it, I earn rewards that I can use with Kiva.

Update 5/11/2009: Advanta is closing down their credit card business. So there goes the Kiva Mastercard. A casualty of the war that brought down the banks that brought down the real estate industry, etc.

Update 12/24/2009: We’re still going strong with Kiva, and are still great fans. Same with Global Giving. I like Give Meaning and Oxfam too, but my Oxfam giving has slacked off, not for any good reason. The orphanage I was supporting through Give Meaning reached their goal, eventually re-listed, I gave again, and they reached that goal too. Other than that particular orphanage, I prefer using Global Giving, just because I can use Paypal as a payment method – though, honestly, I tend to use credit cards now for the airline miles. I’m not giving as much as I’m supposed to, though. It’s a combination of some huge expenses right now and being incredibly busy. But it’s no excuse. So I’ll be thinking about it again in time for Christmass.

Experiment: Ongoing Success!

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