Fighting Poverty with Micro Loans

[mrx]

I heard about Kiva.org about a year ago. Basically, it provides zero or low interest loans to individuals in second and third world countries through local banks, charites, etc..

If an individual needs $500, the sum is made from small loans by many people. Thus, the risk is very low. Being a bit skeptical but interested I made five loans of $25 each. I'm happy to say that two of the loans have been paid in full and the other two have made every payment on time with only $34 still owed.

This website is worth a look. It's a great way to help people help themselves.

Kiva - Loans that change lives

From the Kiva website,

You choose who to lend to - whether a baker in Afghanistan, a goat herder in Uganda, a farmer in Peru, a restaurateur in Cambodia, or a tailor in Iraq - and as they repay their loan, you get your money back. It’s a powerful and sustainable way to empower someone right now to lift themselves out of poverty.

[crackah]

whats the interest rate like?

[mrx]

Like Zero or Low.. based on the country, institutions etc.. There may be someone making money along the way but it's not very much. Kiva ask for a small donation to cover overhead but it's optional. I gladly pay the overhead because it cost money to make this work. There was a CNN reporter who donated and then went to Afghanistan to see how his money was spent. The borrower expanded his bakery and employed three more people. Here is a similar story from MSNBC, Changing the world one loan at a time - TODAY: People - MSNBC.com

[jasaunders]

Kiva doesn't actually lend the money out directly, they use microlending programs based in the various third-world countries to actually administer and collect the loans. Kiva justs acts as an intermediary to get people to donate.

[mrx]

Kiva raises $2m / month with a 2% default rate.