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

1jim

I hadnt suggested that you (or anyone else for that matter) dont do enough, I stumbled across this thread whilst looking up zopa and saw it discussing microloans and though I would add the people I use. I guess I saw a thread and thought that it might boost awareness for those interested in this, I apologise if you are not and meant no offence

Loughton_Monkey

markharding557 wrote: »

Looks dodgy as a £9 note to me

No. It's Kosher. They changed mine into 3 X £3

vivatifosi

Thanks 1jim, I'll look into that. I got my first payment through from my investment earlier this month so I'm on the way to being paid back, at which point I can lend again.

Don't think of this as charity bendix, its microcredit for people who are normally unable to access credit.

Conrad

vivatifosi wrote: »

, but their profitability is only 2% and it is a charity which ploughs it back anyway

.

Are you sure? I've known some white middle class middle aged females making high incomes and enjoying full sick pay and long maternity breaks that work for charities. I want my money goinmg to people that need it, not white middle class Islington dinner party women.

vivatifosi

Conrad wrote: »

Are you sure? I've known some white middle class middle aged females making high incomes and enjoying full sick pay and long maternity breaks that work for charities. I want my money goinmg to people that need it, not white middle class Islington dinner party women.

For the Kiva partner I've chosen I'm as sure as I can be. The partner is not in the UK, they are in a poor part of the Philippines. They pay some of their people but I don't have a problem with that. I doubt that they've ever heard of Islington, let alone been to a dinner party there.

Finefoot

This looks really interesting. Please keep us updated.

vivatifosi

Finefoot wrote: »

This looks really interesting. Please keep us updated.

Have just received another repayment notice and so far 14% of my loan has been repaid and repayments have been made on time.

Reading further on micro-credit, one of the reasons that the loans are so expensive is that micro-credit is expensive to manage. Another is that the funding partner has to handle the currency fluctuation risk. It's a shame that I can't agree that my funds go into - say - Philippino Pesos and then can be transferred within the Philippines to other potential recipients and I take the currency risk rather than it falling on the partner agency. I want to do this for the long haul and have already transferred my money into dollars anyway, it is one potential way of reducing costs to the borrowers as well as the partner agents.

Norfolk_Jim

Very interesting. I've tended to stick with Opportunity International - another microcredit charity because I think I'd find it hard picking who to support, a bit of a dilemma, but I think many people would feel positively about knowing exactly who they loaned microloans to rather than just trusting in an organisation to do it for you. Suspect theres pro's and cons with both.

rockitup

vivatifosi wrote: »

Have just received another repayment notice and so far 14% of my loan has been repaid and repayments have been made on time.

Reading further on micro-credit, one of the reasons that the loans are so expensive is that micro-credit is expensive to manage. Another is that the funding partner has to handle the currency fluctuation risk. It's a shame that I can't agree that my funds go into - say - Philippino Pesos and then can be transferred within the Philippines to other potential recipients and I take the currency risk rather than it falling on the partner agency. I want to do this for the long haul and have already transferred my money into dollars anyway, it is one potential way of reducing costs to the borrowers as well as the partner agents.

Well done Viva and glad to hear that you are receiving your loan repayments on schedule.

I have been living in the Philippines (it is 98% poor) for 3 years now and microcredit does serve a useful purpose as it keeps people fed, helps pay for education (well sort of), medical bills and even pauper type funerals.

My missus tried lending out similar sums of money (£500 in total) but lost almost all of it as she lent to neighbours from her old community and also some family. These neighbours and family do not pay back after the first payment and they are never chased too much for arrears by some of the smaller microlenders.

Micro finance is normally done on a 5/6 basis, ie borrow 500 pesos (£7) and pay back 600 pesos by way of 2 weekly instalments over an 8 week period. Banks tend to loan at rates of 30% to 40%, mortgages are around 12% and there are many thousands of cars, motorcycles, houses etc on sale lists (but most are wrecked)

It seems to me that because this kiva organisation is arranging the lending, then the borrower does not know you at all and is more likely to pay back the instalments. Even so I would say don't get too heavily involved in this kind of lending, some loans would most likely end up as a form of donation instead. I have made a few of those myself when I first got there LOL

Loughton_Monkey

rockitup wrote: »

I have been living in the Philippines (it is 98% poor) for 3 years now and microcredit does serve a useful purpose as it keeps people fed, helps pay for education (well sort of), medical bills and even pauper type funerals.......

I was heartened by this. A little bit worried, perhaps, about the chances of being repayed if the money is going to the person's funeral. Or what 'return' and investment in food would actually give....

Anyway, I would like to keep my charitable stuff a bit closer to home, and thought that Scotland might be even more than 98% poorer. Some little guy wanting money for a BTL or something... but sadly there are no loans available there yet.

Give it time....