Kiva & Microlending

OK, I just had to share this, some time ago, on a whim after reading an online article about micro-lending, I loaned $25 along with 6 other online people thru Kiva to a lady in Tanzania raising chickens to support her family.  Here was my original post on that.  The principle being that people in wealthier countries can afford to make small loans that mean much to citizens of poorer developing countries – $25 in Mitchell, SD might feed my family at a fast food restaurant, but $25 can help people in other countries build up a small private business and lead them to financial independence

(But first do yourself a favor and check out their website – KIVA  – it really is a unique concept and a community experience)

So KIVA allows people around the work to collectively and form into a Lending Teams to loan small amounts to poor entrepreneurs around the world – in my case, my first experience was joining with 6 other people around the world (Norway. Washington State, Indianapolis, Oklahoma, etc) to loan a total of $175 to this lady starting a small poultry operation

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So after making the loan way back in Mar 2009, she made the first few repayments but after only getting back $4 or $5 repaid back to our accounts, she went into default – I didn’t really think anything about it – I mean, it was just an experiment for me to see what the experience would be like……but then June of this year, the loan was finally repaid in full – long after I figured the loan would never be repaid, which now means my original loan amount is back in my KIVA account ready for me to loan to someone else if I wish – many people apparently forget these are loans and not donations and forget the real power of this concept which is the same original amount can be loaned many times over helping other people….so excitedly, I got to re-loan my original $25 KIVA balance and chose a woman from Peru this time who is the sole financial supporter of 3 children trying to sell hardware items and she applied for a loan to expand her wares – once an additional $200 in loans from other KIVA members joins in, the loan will be disbursed to her.

One of the real interesting things  about KIVA are the Journals posted by the Field Partners who are in these various countries and tell the stories of some of these entrepreneurs – I mentioned in a posting a few weeks ago what a profound book “The Boy Who Harnessed the Wind” was – well these people who pull themselves up out of poverty and make a living for their families with the meagerest of starting capital really impress me – and make me wonder what I would do in their situation.

So yeah, its been a neat experience and eye-opening – as an organization, they really try to filter out legitimate loan requests and the default rate is extremely low especially when you consider the very low living standards in some of these countries

Here are some other stats from their website – and I think its something I may get my children involved in – charitable giving is best when its anonymous however, KIVA is a great learning experience and literally puts a human face on how much even a small donation can mean to someone and I think that is a valuable lesson for me and my kids.

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And reading the stories of these people striving to make a better live for themselves and their children just reinforces how lucky we are to have been born in a country which valued and fought for personal freedoms, capitalism as well as a country blessed with natural resources and a democratic republic.  As Warren Buffett puts it  – we just happen to have won the Ovarian Lottery”.  $25 is such a small sum of money – its mindboggling how much that means to people in other countries

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About bradosterloo

.NET Software Developer working for Innovative Systems, LLC in Mitchell, SD
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