A Worthy Cause

I'll freely admit that, 10+ years into regular Internet use, I'm pretty jaded by people telling me about this new site or that great idea. I'm also, you can understand, rather tired of all the scams that are out there. (No, dude from Nigeria, I am not going to send you the money you need to cover legal fees so you can collect the prize in some lottery you won.)

So when I first saw the website of an organization called Kiva, you can understand why I might have been a bit skeptical. It looked it might've been a great way to part gullible people from their money. Reading a bit more about what Kiva does, though, I was intrigued. Kiva is a nonprofit organization in a field called "microfinance." They're partnered with a number of field partners, local organizations in various nations around the world, and these organizations extend small interest-free loans to individual entrepreneurs who need (but can't obtain through traditional methods) money to start or expand their businesses. "Small" here really does mean small - the average size of a loan extended by a Kiva partner is $544.26 - compare that to the amount you need to start a business in the U.S.! The borrowers are typically owners of businesses like farms or small stores or restaurants.

Still seems like something that could be a scam, I suppose, but if you look at their Press page, there'd have to be a lot of major media outlets (the BBC, the New York Times, NPR, Time Magazine, Business Week... how often do you see an organization that's endorsed by the Wall Street Journal and the Village Voice?) in on it. As far as repayment goes, looking at one of the field partners, Prisma MicroFinance, as an example, of 436 active loans, none of them are over a month past due, and of 258 ended loans, none of them were not repaid in full. Overall, across all of their partners, 7% of active loans (571 of 8,138) are a month or more past due, but not a single ended loan went into default or failed to be repaid in full.

As I was reading through this, I was thinking about how much money I spent - much of it borrowed - to pay for law school, and how easy it was for me to borrow that money. The question that arose in my mind, then, was, "why should it be that, just because the people Kiva lends to are in less industrialized countries, they shouldn't be able to do the same?" Especially when the amounts seem so small in comparison. And really, there's no reason they shouldn't be able to do the same.

You may have guessed where this was leading: I signed up. I'm happy to say that, through Kiva and Prisma MicroFinance, I'm one of sixteen lenders who's helping Judith Mendoza of Managua, Nicaragua, remodel and expand her restaurant and buy new cooking utensils.

Anyway, give it a look; maybe you, too, can have this warm, fuzzy feeling inside.