Friday, October 30, 2009

Kiva - Loans that change lives

Over the past year or so, several atheist blogs I read (but mainly the Friendly Atheist) have mentioned a microfinance site where you can loan money to specific low income entrepreneurs throughout the world as a way to fight poverty. A couple of months ago, I wandered over to take a look.

It sounded like a good idea, so I joined the Atheists, Agnostics, Skeptics, Freethinkers, Secular Humanists and the Non-Religious (AASFSHNR) team but didn't make a loan for a while. Via a lot of blog promotion, the AASFSHNR has become the number one lending team on Kiva, but I felt I had to research more about it before I actually gave Kiva any money.

The way it works is you loan to an individual or group somewhere in the world and the loan gets paid back over a specific period (like any loan, of course). Then you have the option of either loaning the money again, donating it to Kiva to cover operating expenses, or withdrawing it. Although Kiva does not charge interest, the loan goes through a field partner in the borrower's country, and they do charge the borrower interest. The loans you make are interest free, so this is not a way to make money, and in fact, there is a chance you will lose it if the borrower fails to repay. Researching what might be going on (e.g., political or economic problems) in the part of the globe to which you're sending your money, and the microfinance field partner is probably a good idea. Over $99,700,000 has been loaned worldwide through Kiva so far.

Then, Bobby Henderson, founder of the Church of the Flying Spaghetti Monster, made a plea on the AASFSHNR message board because the FSM team was getting close to the $100,000 mark (note that, although the AASFSHNR name is rather long, and in fact might possibly be the longest team name on Kiva, it does NOT include Pastafarians). I went over and checked, and found that the FSM team is the number two lender in the religious organizations category! It seemed as though I was being tapped on the shoulder by His noodly appendage (or maybe I just had an itch. I don't know), so I, of course, had to make a couple of loans (Ok, if you click that link, you'll notice 11 so far). I figure that I can afford a few dollars better than most of the people on this planet. I've already been able to re-lend a substantial amount of the money I've loaned, so my "investment" is fairly minimal.

On October 7, the AASFSHNR team became the first group to loan over a million dollars (the number two team is still over $300,000 away). Here is a press release regarding the event. We are currently over $1,100,000.

Twenty-five dollars is the minimum you can loan, but you can re-loan it as often as you like. That $25 can turn into $50, $75 or much more. Go and loan now. Join any of my teams, or a competing team (we like the competition! It means more loans!). There are plenty of them: GLBT, Team Obama, Animal Lovers, and even Beer Goggles Never Lie...much. Or you can start your own team. It doesn't matter what team, or even if you aren't on one - for a minimal amount of money, you can help change lives. This may not be an investment for you, but it is an investment in the world and our future.
Paraphrasing LeVar Burton, you don't just have to take my word for it:

'Revolutionising how donors and lenders in the US are connecting with small entrepreneurs in developing countries.' (actually, there are lenders from all over the world)
-- BBC

'If you've got 25 bucks, a PC and a PayPal account, you've now got the wherewithal to be an international financier.'
-- CNN Money

'Smaller investors can make loans of as little as $25 to specific individual entrepreneurs through a service launched last fall by'
-- The Wall Street Journal

'An inexpensive feel-good investment opportunity...All loaned funds go directly to the applicants, and most loans are repaid in full.'
-- Entrepreneur Magazine