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!