Loan a little to people and make a difference (in Off-topic)


AdminQBVerifex [Serenity In Chaos] October 24 2009 5:25 AM EDT

You might have heard of Microfinance before, but not like this. This is taking microfinance to the next logical step with social networking. Basically, this site: http://www.kiva.org/ lets you send money to entrepreneurs all around the world. It's cool because you basically are lending money to someone in a typically poorer country to help them build up their business.

The amount you can lend is anywhere from $25 to the full amount of the loan they are asking for. In some cases they are only asking for something like $250, and so $25 goes a long ways towards that goal. I thought I'd share this as you guys are usually pretty awesome about stuff like this and also, if enough people were interested in this, we could even start a "group" on there just for CB. :)

Demigod October 24 2009 10:09 AM EDT

I looked at Kiva and other international microlenders like it before. It was probably a year and a half ago, but I remember that it wasn't quite as perfect as it sounded. Of course, not all of the problems relate specifically to Kiva, and a number of their counterparts have already collapsed, but I do remember problems like:

Massive default rate. Banks attempt to keep defaults under 3%, but microlenders can't judge credit as well.

The self-sufficient companies had high interest rates.

The low-interest companies were not self-sufficient, but rather they required donations to stay active.

And I believe the current Kiva model has been tweaked to run better. If I'm correct, you don't lend to families at all. Instead, a lender will go ahead and front the loan in hopes of citizens lending money back to them. It's a better model, but Kiva and others still have to put up pictures and stories of the recipients to maintain marketing.

That being said, it's a wonderful cause, and I'd much rather get bombarded with their marketing than Feed the Children's.
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