Kiva: Microloans Made Easy
I think I've been living in the Seattle area long enough now that the general liberal vibe is starting to rub off on me. Not only that, it's rubbing off in a high-tech sort of way. I just made an online microloan of $25 to a man in Ecuador named Kléber Villafuerte through a site call kiva.org.
Mr. Villafuerte runs a small business selling fabric and making clothes and is looking for a $700 loan to buy fabric, thread, scissors, a mannequin, and similar supplies. Kiva lets you lend small amounts like $25 to entrepreneurs like these via a local microfinance organization--Mifex in Mr. Villafuerte's case. As a lender, I'll make no interest on the loan and could lose my money altogether if he defaults, but Kiva so far has a 100% repayment rate and microfinance in general has something like a 97% repayment rate, so the low risk of a little amount of money is worth it, if you consider helping a poor entrepreneur get on his feet a good social investment.
A few months ago, I saw a program on PBS about microlending and wondered how I could get involved with something like that. I just saw a post on I Will Teach You To Be Rich about Premal Shah, one of the founders of Kiva. It can't get much easier to get involved than to go to a website, pick a business to fund, and make a payment through Pay Pal.
I should be repaid over the next 12 months. I hope the $25 dollars will do much more in Ecuador than it would in my bank account.