Anyone tried kiva.org or microloans?

bonzer

Hi,

Has anyone ever given kiva.org a go or any similar web site? I was thinking of giving it a try. Just interested in any experiences or thoughts.

Kiva is a microloans web site lending money to poor people who wouldn't otherwise have access to financial services, usually for capital to invest in a small business. You choose a specific person to lend money to from online profiles and then they pay you back on a specific repayments schedule. You can club together with many others on the site for the amount the person is looking for, you don't have to lend the full amount. Obviously you don't make a profit and the person could default.

I liked the look of it because it's a hand up rather than hand out type of idea, that it's more personal and more interactive than usual charity giving.

Any thoughts?

Bonzer

GiveItBack

I'm a fan of micofinance, whether Kiva's style, or Grameen. What I like about Kiva is, as you say, you get to choose where the funds go, although what I dislike is that people (donors) seem to tend to forget they've supported someone, so the funds returned can sit waiting to be re-used.

ClaireN75

I'd encourage everyone, who has the means, to support microfinance.

I've been using Kiva for over a year and I personally really like their set up. You can search by region, gender and industry.

You get your share of the loan repayments released immediately so you can reloan it without waiting for the full loan period to be up (obviously only useful if you loan more than $25 at a time, or to more than one person at a time).

I haven't had a default yet (fingers crossed) and they have a pretty good field partners rating system so you can avoid the higher risk loans if you want.

They have a pretty good selection of projects and have started doing videos of some of them so you can really see the person you've lent to.

I don't know Grameen, I'll have to check then out.

Added as an example of the leverage you can get: I've dribbed and drabbed about $300 into Kiva over the last 18 months or so while exchange rates were favourable. That's allowed me to make $775 of loans by reloaning the repayments as they are made back to me. Obviously I'm lucky that I have sufficient income to be able to make such donations, but my Kiva loans give me a lot more pleasure, satisfaction and feeling of contributing to something worthwhile than my monthly standing orders to the more traditional charities I support. Mostly, I suppose, because I chose who I support and can then watch them (hopefully) make a success of their business through updates from the field partners.

scubaangel

Another kiva fan here too, I tend to use whatever paypal dollar balance I have to top up my repaid loans so I can reloan the money as soon as possible, I guess at some point I'll end up pulling my money out when moneys particularly tight but it does give me alot of satisfaction knowing that fairly small amounts of my money can make such a big difference.

bonzer

Oh right, I didn't realise you got the funds back on the repayment schedule. I thought you would have to wait to the end of the full loan term. That's good then, so you can re-lend it as you get it back.

I've had a first go at it and lent to a woman in Ghana who wanted some stock for her stall. All seems straight-forward enough so far.

One lingering concern I had was that there might be a middle man somewhere along the way getting rich off lending out my money. I've been digging into the economics of it and I see the in-country MFIs charge quite high interest rates (the one handling the loan I lent on was charging an average of 26%) which surprised me a bit. I saw Kiva was a non-profit organisation but are the associated MFIs all non-profit's as well? Kiva justify the high interest rates by pointing out that the small transaction sizes are expensive to deal with and the interest rates are significantly less than other money lenders charge in the circumstances. I guess that makes sense but I just want to be confident there's no-one profiteering off the recipients and lenders. I guess as with any charity it's going to be difficult to be 100% sure.

All in all though it seems like a very worthwhile and enjoyable thing to do. I really like the personal nature of it and you see exactly where the money's going. Off now to look for my next loan recipient :T

Thanks for your thoughts everyone.

Bonzer

Jazzy_B

I've been using them for a couple of years.
Last year they changed the system, so that repaid funds were made available for reloaning. You have to reloan in multiples of $25. At Christmas time, I gave gift certificates to a couple of people, but the site would not let me pay $50. It insisted on taking off the amount that had been repaid from a loan.When the outstanding loan is repaid, I can pay it up to make a multiple of $25 to reloan. I would have preferred them to earn interest on the money.
I know this probably doesn't make sense but I know what I mean!

NumboJumbo

I've also been with Kiva for a few years as well and never had a prob. They've always kept me informed on whatever loan I've made, ie when it's disbursed, any updates on the the person who's recived the loan and any interim payments I've received. I believe I'm upto my 25th loan with them now and everything been's tickety-boo.

If you like the idea of micro loans then here's a list of a few more organisations that allow you to loan your money to social/ethical projects where you choose to receive the interest on the loan or not.

http://www.helpfromhome.org/action_goodcauses_miscellaneous.htm

Scroll down to the 'Micro / Ethical Lending' category and click on the 'Learn More' button.