KIVA - The poor man's charity to the poor man
I know that there have been videos posted about KIVA in the past, but I thought I'd blog this charity just to re-promote it and encourage us to use it.
It is a very easy charity to donate to in that even someone who isn't making much money can do it. You don't actually GIVE away your money. You LEND it to people who need it at rates that are far below those available to them outside of this sort of program. It works by enlisting a vast network of small lending organizations that work on a consept of charity and a mission of growth of economies in impoverished areas.
They let you decide who--who EXACTLY--to lend your money to based on the descriptions they give of the entrapaneurs and their goals. If you only want to give to those producing food, or if you want to give to those producing clothing or shelter, you can choose. They update those loans by providing journals or even videos chronicalling the result of your investments.
They aren't normal investments. You will make no profit. In some cases, individuals or groups of them will not be able to repay them. Still, you offer an offering of growth to not only an individual person, but also a region who may desperately need a service that this individual can offer better with your loan.
The loans are unfortunately NOT zero interest and in some cases can seem rather high in interest, but in all cases that I've seen, the interest is lower than can be received otherwise.
I love this program in that, at the moment, I've not got much to offer, but I can offer something to people who need it while I have it and they don't.
There are lenders that are religious and there are lenders that are not. This is not the focus of the program. The focus is developing the undeveloped world and enabling people to do what they need to do in order to acheive this goal.
Perhaps Videosift could even start a "team" of lenders. It would show the community's will to acheive this goal and the community's willingness to practice what it so frequently preaches in comments and posts.
Anyway, visit the KIVA.org site and check it out for yourself. All the information is there. Decide for yourself whether your money is better invested to gain wealth in your economy or to encourage the growth of another that needs it desperately.
I actually first heard of this from an ad, but then found Bill Clinton fervently advertising for it in an interview with Greta van Susteren on a youtube video. I thought it was a great idea and have since found no qualms with it in performance, drive, intention, or delivery.
Check it out.
4 Comments
dgandhiI've got about $1000 in kiva that I keep churning back in. I attribute all my loans to the, currently dominant, Atheist/etc team, largely because I think it's great to have something to point to when people ask "Where are all the atheist charities?".
rottenseedI've been reading about KIVA...it looks like a way for banks in third world countries to get fat without having to fund their own loans or take any risks. I've read about the interest rates being as high as 50%. I know it's usually small amounts of money, but over long enough periods of time, it equates to high dollars. That, to me, sounds stupid. Maybe somebody can explain it to me in a way that justifies it.
dgandhi>> ^rottenseed:it looks like a way for banks in third world countries to get fat without having to fund their own loans or take any risks.
I've been neck deep in this debate, and the way I look at it is this:
Kiva does subsidize Micro Finance Institutions (MFI), which are basically banks.
Kiva does require that MFIs they fund offer significantly better rates that locally available.
Many of the places where MFIs operate have a loan-shark credit system where > 100% interest per month is common.
The MFIs do run the risk of losing money on inflation, since the loans must be paid back in US dollars, and the only legal reason not to repay kiva is that the recipient did not repay the loan from the MFI.
Kiva Audits the books of MFIs it uses to make sure they are legit.
The rates, when all fees are considered, look absurd to someone accustomed to a world where a major loan is rarely less than $100k at a time. But consider if you want a home loan you will likely pay more than $1000 in fees, if you only want to borrow $1500 you can see how this can be a problem.
Since the MFIs have legal reporting requirements which cost money to meet, the fees must be paid, the 50% rates you hear are fully inclusive of the fees. The accumulable interest is rarely over 20% APR, and then only in places where monthly loan-shark interest is in the 200% range. Remember most of the places where MFIs operate have high inflation, charging 15% APR with 15% annual inflation, is, in effect interest free money.
The MFIs provide an important service, we help them capitalize and grow, so they can do more of it. They are legal entities with staff and documentation costs, these costs are legitimate, and we do help them get paid.
Subsidizing MFIs may be the most efficient way to alleviate world wide poverty. I know it seems impure, but pure solutions rarely work. Please don't let the perfect be the enemy of the good.
rottenseed^Well I just finished my double major in economics and business so that I could understand anything you just said. From the 2% of that I understand, it makes sense.
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