This is a really cool site that I saw a PBS (the only TV channel we have right now) documentary on. It is called kiva.org and it was founded by a guy who used to be with paypal. Anyway they have contacts with micro lending organizations all over the world and they enable you to directly help to finance a small business in a developing country. So for instance if some guy in Azerbaijan wants to build a stand so he can quit selling his vegetables out of the back of his car, except $500.00 is an enormous amount of money for him, you can help him by loaning him the money through kiva.org. They have a 100% payback rate right now. I think paypal even waives the normal fee they charge on transactions when you use it to loan money via kiva. I really think this is a good way to help people and to also develop some relationships with people who may need to hear the Gospel.
One idea Julie had was to ebay some "junk" we have laying around and use the money to lend to some people needing it on kiva. I think that is a great idea, so my Roomba's going the way of the virgin mary shaped cheeze sandwich so it's value can be better put to use helping someone's small business.
Another cool thing is that you can loan as little as $25.00 to someone and really make a difference. They give you the ability to track the progress of the money being raised on a project and also the payback rate of the project. I think this is an excellent way to help people in a way that respects their dignity, one of the big problems in the developing world is simply access to the capital necessary to get their business rolling, and by rolling I mean simply buying goods to sell, or buying the lumber to build a fruit stand, or buying seed to plant a small field, etc, these are all things that are so inexpensive most of us would not even think twice about it, but they are major obstacles to providing for the families of many people out there trying to eek out a living.
5 comments:
I checked to see what the effective annual interest rate would be on the loan and didn't see any published. How the heck are we supposed to turn a profit off of these people without getting interest? It seems to me that if you're going to enter into a high risk loan like lending money to some guy in Nigeria, you should at least expect a high yeilding interest rate.
I have read multiple reports of scams that originate in Nigeria. So many come from that area that a lot of email scams are actually referred to as the "Nigerian Letter."
I do empathize with individuals that would like to start a business and have a hard time securing funds, especially in markets where the standard way of borrowing money is to borrow at extraodinarily high interest rates that are designed to keep people impoverished. I don't, however, think that giving people loans with little or no collateral should be viewed as "socially minded." I think the word they were looking for was "gullible."
I'm sure that in countries like Afghanistan that are, in all actuality, run by drug lords or the asian pacific rim where mafias are known to have a very strong hold, Mafuz and Chin Lee will be free to rise above the system via my $100 that I "loaned" them to buy seeds... or wool... or microprocessors... or 1,000 Dwight Shrute bobbleheads (reference "The Office" on NBC) to be exported around the world.
I have no problem if you want to give these people money to start a business, but it would be pragmatic to look at it as a gift and not a loan because you ain't ever seeing that money again.
By the way, I've got some pretty good business ideas that I've been trying to raise a little capital for... Anybody that wants to give... I mean loan me a couple C-notes just to get me started... Just send your cash directly to senu.ahmed@IamAsucker.com.
The whole point of kiva is that it's not the Nigerian letter, they actually have people out in the world working to enroll legitimate business people into the program.
Of course it's more of a gift than a loan, that is because you are taking on a tremendous amount of risk with the money, risk that the traditional banking systems in these people's countries were unwilling to take.
However, in defense of your synicysm, I have been considering the thought of who these lendee's are actually held accountable to and what collateral they put up for the loan. not because I want to make sure they pay up, I think they should, however if I give over my money, but sign away my rights to forgive the debt I don't know if I want to do that. If my money goes into some pool, and then when this person can't pay it back they get strong armed by some collector and I (being the lender) don't have the option to forgive the debt, then I am not for this, I am going to look into that a little more before I loan.
I would hate to think that my $25.00 loan in the long run caused someone to be harassed by a debt collector just because they didn't know how to run a profitable fruit stand in a country where nobody can afford fruit anyway. it doesn't seem that I am would be doing them any good then.
I grew up in a pretty nice small town in Oklahoma and worked in banking for about 10 years. I've never heard of 100% payback rate. I don't know what these people are doing to get 100% of people to pay back, but I'm going to guess it doesn't fit in with your ideas of spreading Christ's love. I mean let's think about it... Not one person entered into a bad business scheme? Or got sick? I mean even well intentioned people (we won't name names) have entered into some business ventures that didn't pan out. How the heck does the guy that has to go out and borrow $25 to purchase a wooden crate and a bag of fruit have such superior business savvy?
While I do like your idealic ways, mark my words, this will come back and get busted for something crooked. I don't know what or how, but if something seems too good to be true it usually is. I'd actually be more likely to place a loan if the payback was averaging 50%.
You know I've wasted much more money on things that didn't even have a chance for any kind of redemptive or socially beneficial value, so $25 here won't really matter.
BTW don't mention any of that stuff you know about that I've spent money on...I've straightened up my act since then...for the most part ;)
I hate to burst your bubble here, but I think there are only two of us that see this page. I think your secrets are safe!
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