Anyone fancy a $25 chance to help a poor entrepreneur?

vivatifosi

I've been watching a social enterprise called Kiva.org for a while. Having read Pasture's posts earlier about how hard it is for entrepreneurs to get going without the facilities, I wondered if anyone fancied joining me in lending $25 (it isn't a gift) to someone in the developing world to help grow their business.

This could be a different type of economic thread, talking about the types of people we had chosen to help and why. Also further down the line, talking about whether we have got out money back and whether we would reinvest it.

Here's kiva's website if anyone is interested:

http://www.kiva.org/

If anyone does have a go at this, please read first how Kiva works as it is important to understand so as not to lead to any misconceptions. In particular people may wish to read the "issues" section of the Wikipedia entry at http://en.wikipedia.org/wiki/Kiva_%28organization%29 as well as noting that Kiva will charge an admin fee. I'm not trying to put anyone off, rather making sure that I haven't said anything misleading.

For my first loan I've gone for a female Philippino shopkeeper. I chose her because she's low risk (she's made loans before) and I was taken by her story.

Kiva has been featured on MSE threads before and I found out about it originally from an Alvin Hall documentary so I'm pretty sure its legit. Also, this isn't about charity, its a calculated risk at lending to someone poorer than us.

Maybe some of you are already Kiva lenders. If so, how have you found it so far?

PasturesNew

Send all UR MUNEH 2 MI


I'll take a look.

For those who are exchange-rate challenged, it's £15.95.

PasturesNew

I think I'd rather give the money to a known individual, rather than lend. Would we be lending money that are at high rates, leading over-optimistic people to over-reach themselves? That's my worry.

I'd hate to sit here, tucking into a Dominos, not bothered about seeing the $25 ever again, while somebody was on the other side of the world considering suicide as they were mugged/robbed of what they had and don't know how to make the payments

moggylover

vivatifosi wrote: »

I've been watching a social enterprise called Kiva.org for a while. Having read Pasture's posts earlier about how hard it is for entrepreneurs to get going without the facilities, I wondered if anyone fancied joining me in lending $25 (it isn't a gift) to someone in the developing world to help grow their business.

This could be a different type of economic thread, talking about the types of people we had chosen to help and why. Also further down the line, talking about whether we have got out money back and whether we would reinvest it.

Here's kiva's website if anyone is interested:

http://www.kiva.org/

If anyone does have a go at this, please read first how Kiva works as it is important to understand so as not to lead to any misconceptions. In particular people may wish to read the "issues" section of the Wikipedia entry at http://en.wikipedia.org/wiki/Kiva_%28organization%29 as well as noting that Kiva will charge an admin fee. I'm not trying to put anyone off, rather making sure that I haven't said anything misleading.

For my first loan I've gone for a female Philippino shopkeeper. I chose her because she's low risk (she's made loans before) and I was taken by her story.

Kiva has been featured on MSE threads before and I found out about it originally from an Alvin Hall documentary so I'm pretty sure its legit. Also, this isn't about charity, its a calculated risk at lending to someone poorer than us.

Maybe some of you are already Kiva lenders. If so, how have you found it so far?

Actually, if £15.95 was going to make a big difference to someones life then I'd be really happy to just give it if I knew for definite that they were going to get it and it wasn't a scam:)

tomterm8

So, you lend them money... but don't get more money back? But if their business fails, you won't even get your money back?

Hmph.

I personally like to keep my charity, well, charity and my business profit making.

Wheezy_2

From viva's Wiki link :

According to its web site, Kiva quotes interest rates as the "self reported average rate charged by the Field Partner to the entrepreneur."As of January 7, 2010 35.21% is the Average Interest Rate and Fees Borrowers Pay (Portfolio Yield) to All Kiva Field Partners.

:eek:

There's rates up to 80% on there...
Are you not more supporting the field partners this way than the actual borrower?

vivatifosi

You can choose the degree of risk you take tomterm. I've deliberately picked a low risk option, both in terms of the person who has made previous loans and paid them back on time, as well as the local organisation on the ground having a solid reputation.

It isn't a scam though and they do get the money.

I've been looking into this organisation since I first heard of them last November and its taken me a long time to make a loan, so I understand the skepticism.

lostinrates

PasturesNew wrote: »

I think I'd rather give the money to a known individual, rather than lend. Would we be lending money that are at high rates, leading over-optimistic people to over-reach themselves? That's my worry.

I'd hate to sit here, tucking into a Dominos, not bothered about seeing the $25 ever again, while somebody was on the other side of the world considering suicide as they were mugged/robbed of what they had and don't know how to make the payments

I'm torn.

I wouldn't want someone to kill themselves for my £15 either, but I would like it to be a motivating force for them.

Viva, I hadn't heard about this....interesting.

LilacPixie

i'll have a read once kids in bed

vivatifosi

Wheezy wrote: »

From viva's Wiki link :


:eek:

There's rates up to 80% on there...
Are you not more supporting the field partners this way than the actual borrower?

You need to choose carefully wheezy. But the reality is microcredit is expensive to administer. The partner I've chosen to fund does indeed charge around the average, but their profitability is only 2% and it is a charity which ploughs it back anyway.

Wheezy_2

vivatifosi wrote: »

You need to choose carefully wheezy. But the reality is microcredit is expensive to administer. The partner I've chosen to fund does indeed charge around the average, but their profitability is only 2% and it is a charity which ploughs it back anyway.

Thanks Viva, makes sense.
Sorry, didn't really want to put a damper on things. I hadn't heard from them before but will surely explore it a bit more.