Micro-loans and the Micro-Financeer
As I am feeling particularly cynical today about public finances, I thought I would balance the bitterness by writing about one way I keep myself feeling connected to the world and attempt to leave it a little bit better than I found it.
We can’t all be Bill Gates. Most of us don’t have mind-boggling resources available to build hospital wings or university research institutes. However, in the last year or so I have become convinced of the value of micro-loans and this is a kind of philanthropy that is available to anyone with a credit card, a paypal account and 25.00 USD.
There are a variety of micro-loan outfits, but the one that caught my eye on a friend’s facebook page last December is Kiva Loans. (Thanks again for inspiring me, J.) Once you have set up an account for yourself (the most complicated part of the process IMHO) you get to browse for your first ‘borrower’. In practice, in order to streamline the process these businesses have already been approved and received their loans from a local loan provider. Kiva lenders are merely joining in to a group loan to cover the amount. However, the opportunity to choose the small business owner who will receive your loan gives the whole process a wonderfully human feel. Will it be an Armenian cattle herder? A Ugandan grocery store owner? A Mongolian bottle recycler? Based on some available data on repayment and delinquency for the local provider, the type of business, the gender of the recipient and their location you get to decide. When enough folks have signed on to a particular loan it closes and the business of business carries on. In conjunction with other organizations that finance community building the individual micro-loan can improve the living conditions of individuals, contribute to local economies and give the micro-financeer a slightly less cynical moment.
Month by month your portion of their larger loan gets paid back and updates from the field appear in your “portfolio”. It’s satisfying to see the dollars come back and equally satisfying to turn them over again into a new loan. Who will it be this time? Perhaps some worthy individual trying to get a project started in Detroit, Michigan.
Detroit is the first city in the new Kiva City program, which works with credit unions and other financial institutions to faciliate loans and empower communities and civic leaders to get the word out.
Originally posted July 29, 2011