Tuesday, June 12, 2007

Make A Loan, Change A Life

I just made a loan to a cattle farmer in Azerbaijan. All it took me was a few clicks. For Nadir Asadov, this will help him buy another cow for his breeding stock. I used a neat website called Kiva. I'd heard about Kiva a while ago, and it's stuck in the back of my mind for a while. My godson is graduating 8th grade tomorrow, and it occurred to me that a Kiva gift certificate would be a nice way to get him interested in philanthropy. Kiva takes the concept of microcredit (as popularized by Muhammad Yunus of Grameen Bank, who won the Nobel Peace Prize for it last year), and uses the Internet to enable microlenders. The concept of microcredit is that there are a great many people in the developing world for whom a modest loan (say between $500 and $1500) could enable them to start or expand a small business, making a huge difference in their lives. Normal banks wouldn't touch such loans, but Yunus found that such loans can have a very high repayment rate. So he created the Grameen Bank that focused on making microloans to women in Bangladesh.

Kiva elaborated on this concept to harness Internet microlenders. For as little as $25, you can go onto Kiva's website, survey budding entrepeneurs all over the world, and pick one to make a loan to. Kiva bundles your loan with other microlenders, until your chosen borrower has met his target. You then get periodic progress reports on how your borrower's business is doing, and eventually your money gets paid back. At the end, you can take your money back, or you can loan it to someone else.

You too can become a microlender, and can help out a produce seller in Ghana or a storekeeper in Ecuador. Check it out!

Monday, June 11, 2007

Earth Bananas

I like to have a banana most mornings with my breakfast, and I also generally like to buy local or at least organic when I can. For bananas, local is out, since we're not really the right climate for it. (While some people here do have backyard banana trees, nobody grows enough of them to turn up at the farmer's market.) And at Whole Foods, the organic bananas on offer never looked that great, so I resigned to regular old Chiquita bananas from Gelson's. That is, until a few months ago, when I noticed a new display of "Earth bananas" at Whole Foods. The display explained that these Earth bananas were the product of a venture called "Earth University" in Costa Rica that was all about researching organic, environmentally-friendly farming. Not only had Earth University succeeded in growing bananas organically (which is more difficult than most other fruits due to the climate), but they had pioneered new techniques for improving their water efficiency and making more use of their by-products. And not only do these bananas look just as good as the regular Chiquitas, they actually taste better. I had never thought about much difference in the taste of bananas until I tasted these. They are noticeably richer and fuller in banana flavor. And verging on too good to be true, these bananas cost the same or less than the others. They do ripen (and thus perish) a bit faster than the regular bananas. But then real food is like that.

Sunday, June 10, 2007

Score One For Credit Unions

In today's LA Times, a consumer watch article warns that using ATMs abroad may incur nasty surprise fees, sometimes more than $5 per transaction. They write: "A sampling of banks in the Los Angeles area found that each had its own fee structure for foreign ATM withdrawals. Bank of America charges $5, plus 1% of the withdrawal. City National Bank charges $1.50, plus 3%. Wells Fargo charges a flat fee of $5. Washington Mutual charges 1%, with no flat fees."

The article neglected to point out that there are better alternatives than the big banks, such as credit unions. In our travels to Spain, Scotland, and England in the past year, we made many ATM withdrawals in those countries, and were not assessed any fees at all by our credit union. On top of that, we got a consistently better exchange rate on the ATM withdrawals than we paid on our credit card transactions. (In Spain last month, a euro averaged about $1.35 from ATMs, but $1.40 on my MasterCard.)

I continue to wonder why anybody keeps their checking accounts at the fee-heavy big banks when there are much more thrifty alternatives. We keep our checking account at the Western Federal Credit Union, where we have no monthly fee, free online bill-paying, and plenty of other services. Here at home, I have access to the Co-Op Network of ATMs fee free, which includes most credit unions, and is never far away.