Kiva - Empowering Individuals and Groups to be International Financiers

In high school (early 1990s for me), I remember rich and famous people like Bill Gates and Ophrah visiting poor people around the world.  They made donations, gave speeches, started foundations and were hailed as making a difference.  However, there seemed to be a large gulf between “them” (rich, famous people) and “us” (regular people like me).

I thought, maybe in 20 or 30 years, I will be relatively wealthy and successful and make a difference in the future.  It was a vague dream like writing a novel or climbing Mt. Everest — yes it really could happen, but it is extremely unlikely.

Then something amazing happened.  The internet exploded and transformational organizations like Kiva.org enabled regular people like me to become international financiers and helping needy micro-entrepreneurs all over the world.  In my first batches of Kiva loans, I made loans to entrepreneurs in 5 different continents (no Australia yet; Antarctica may be tough :).  The businesses have included farming, a beauty parlor, grocery store, and construction.  Unsurprisingly, 100% of my loans were paid back.  Though these are small businesses and not revolutionary, they serve real community needs and provide a better quality of life for the family - better nutrition, housing as well as education for the children.  Grameen Foundation has conducted some research to capture these quality of life improvements with its “Progress Out of Poverty” metrics.

By using an innovative internet model and strategic partnering with effectively run local MFIs, Kiva.org has empowered ordinary individuals like you and me (and now ordinary communities - schools, businesses and even blog communities to become powerful internationial philanthropists who are giving impoverished people a hand out and not a hand out.

If you love Kiva.org, I encourage you to spread the word and to be “happy microfinancing” as the blogger Gavin put it.

Finally, please check out my Facebook application Cool Duels where you can both help the environment AND earn real money to donate to Kiva.org or your favorite cause.

Site of the Week: Adelante Foundation - Honduras Microfinance

Adelante Foundation features a series of stories on their microfinance programs in Honduras on their relatively new blog. Meet members of the staff, volunteers and the local clients who are harnessing their microloans to build new businesses.  You can read about preparations for Dia del Niño, or Children’s Day on September 10.

 Check out their blog.     

Get the Adelante Foundation’s Weblog widget and many other great free widgets at Widgetbox!

Kiva Communities

Kiva now offers another exciting way to become part of the microfinance community.  You can team up with friends, classmates or co-workers to form a community group that can pool money together for a loan.

A class of students can gain insight into microfinance and the challenges of the developing world by making a loan to someone thousands of miles away.

A company can gain esprit de corps by working together for a social goal of helping others with a “hand up” rather than a “hand out”.

Each micro-entrepreneur is connected to Kiva through a local field partner.  These field partners have local expertise and ongoing relations with the micro-entrepreneurs.

Whether you have been an individual contributor to Kiva or haven’t joined yet, consider becoming part of a Kiva community.

Site of the Week: See More at SeMo - Seattle Microfinance

Seattle is more than a pioneer in coffee and software - it is also a vibrant hub in the world of microfinace.

The Seattle Microfinance Blog  covers local microfinance events, microfinance job postings like Kiva Fellows, and international news such as Mercy Corps efforts to arrange micro-mentors for aspiring entrepreneurs in the developing world.

It was encouraging to see creative events such as an Olympics party that was a fundraiser for Wokai, a Chinese microfinance organization.

Has your local organization hosted any successful fundraisers or events recently?  Please leave a comment so that we can share your success and try to duplicate in our part of the global village.

Football Season and Microfinance

What does football have to do with microfinance? A “cheap” ticket for an NFL game can easily cost $80 or more. That same $80 would be the typical loan amount for a micro-entrepreneur starting her small business. While a small craft or livestock business may not be as glamorous as a professional sports game, the additional income can be a winning touchdown for children to pay fees to attend school.

So if you are a football fan, please buy or sell your tickets from our StubHub link to benefit microfinance. Perhaps, watch one game from home and donate the money to a great non-profit like Grameen Foundation. Thank you and good luck to your favorite team!

Microfinance - 5 ways to spread the word

1) Tell your friends - (in a casual way, not preachy)

2) Include your blog or a link to a microfinance organization like Grameen Foundation or Kiva in your email signature.

3) Send an e-card on special occasions, like the Grameen Foundation ecard for Mother’s Day.

4) Make a Kiva.org loan to honor or remember a friend or family member.

5) Write about microfinance on your blog

Kiva.org - My MicroEntrepreneurs Paid Off the Loan… No Surprise

My portfolio of micro-entrepreneurs came through again. I had two entrepreneurs just repay my loan. I’ll need to look for some other people to loan to on Kiva.org.

It is one thing to read about 97% or 99% payback rates in articles. It is another thing to witness firsthand that 100% of your borrowers have paid back every single payment, week after week after week. Personally experiencing repayment makes you feel part of the “success” as that person’s business must be doing well to repay the loan. And now, you have money to loan the next person.

Microfinance has a supportive culture where borrowers encourage each other to overcome sickness and setbacks. This mutual support and positive “peer pressure” achieves very high payback rates.

As Nobel Prize Winner, Muhammad Yunus, noted, there is a sub-prime crisis in the US, but micro-entrepreneurs are faithfully making their repayments at about 99%. That default rate of about 1% or less, contrasts sharply with the US mortgage default rates of 2.7% for prime, 5%+ for alt-A and 16%+ for sub-prime.

Pledge Your Tax Rebate

Alex Counts of Grameen Foundation has an interesting challenge: consider pledging all or part of your Tax Rebate.

Do you think your family is struggling? How about a family in Africa, Latin America or Asia, where they are struggling to make ends meet on just $1 or $2 a day. Higher fuel and food prices are hitting the American family hard. While for us, that may mean one less movie and downsizing to basic cable, for a family in poverty in the developing world it may be not enough food for all of the family.

So even if it is 10%, consider donating $30 or $60 to Grameen Foundation. You can use the donation badge in the upper left, or go directly to Grameen Foundation and click Donate Now.

If your budget is tight, considering making your online purchases (for things that you need anyway - buying birthday gifts for family members, etc.) to help me earn commissions, which I pledge to donate to Grameen Foundation.

Promote Microfinance on Facebook

Become a fan of Grameen Foundation, Kiva.org and other great microfinance non-profits on Facebook.

Social networking can be a great way to share your passion about microfinance with your friends.

To become a fan of Grameen Foundation, click here

There are less than 100 fans - there should be thousands. Please join today.
And keep the discussion going with the forums on the Grameen Foundation Facebook page.

Progress Out of Poverty

Grameen Foundation has done some breakthrough research to help understand how well microfinance does to actually lift people out of poverty. Determining how many people are in poverty is difficult because the cost of living [food, shelter, clothing, health care] varies by country and countries measure poverty differently. Grameen Foundation has studied several countries so far and will expand their statistics.

For more details, see the official Progress Out of Poverty website.