Kiva

Last week's New Yorker had an article about the
current Nobel Peace Prize recipient who is considered
by some to be the father of microfinancing.

If you aren't familiar with it, microfinancing or
microcredit is basically loaning small amounts of
money to poor people in order for them to have capital
to invest in business ventures or business
development. Loans are usually under $1000, given to
people in third world communities, and used for buying
things like food and soap to resell to locals.
Sometimes loans are used for building business or
buying carts to be used as storefronts.

The New Yorker article gives a good overview of the
problems facing these microfinance institutions. Some
institutions rely on charity. Others feel that the
future of microfinance cannot depend on the good will
of people because good will isn't strong enough to
change the economic structure of third world countries
that need more than a temporary fix. These latter
institutions tend to charge extremely high interest
rates on microfinance loans in order to make the
business profitable and self-sustaining. Despite
these high interest rates, many people are still
taking advantage of these loans, paying them back and
being successful in their business goals.

Frontline World on PBS featured an internet company,
www.kiva.org.
Kiva is an online company that has partnered up with
various microfinance institutions in different
countries to provide a database of people looking for
loans. Kiva doesn't seem to take a stand on the issue
of the future of microfinancing, but instead focuses
on making it easier for people like you and me to get
involved with loaning out money and being in direct
contact with the people who take out the loans.

Please check it out and see what you think.
I lent out a total of $100 to 4 different people in
Mexico and Honduras.
I think it's a great opportunity and am telling
everyone I know.

One thing you should know if you are interested, Kiva
uses paypal for all transactions. I already had a
paypal account, so it was easy for me to get things
going. There's no fee for paypal, although linking up
your bank and credit card accounts to paypal takes a
bit of time. Paypal doesn't charge Kiva any
transaction fees. I'm sure partially for good PR,
partially (perhaps) for good will, and partially
because one of the staff of Kiva used to work for
paypal.

In any case, if you have any questions, let me know.