Kiva: Making the World a Better Place $25 at a Time | brokeGIRLrich
Microfinancing is fascinating to me.
People helping people? Yes!
In the personal finance sphere, we talk about peer to peer lending all the time and concentrate on the fact that it can have some incredible returns… if you’re willing to take the risks.
Sites like Lending Club take higher risk borrowers, everyday folks like you and me, and let you make loans to them. You risk defaulting, but the interest rates are higher than your average bank loan and increase as the risk level of the borrower increases.
While this is all pretty interesting to me, my first look at microfinancing was way different.
Have you ever heard of Kiva?
The do-gooder seminarian who spent years seriously considering living in a hut in a third world country to help people loves Kiva.
Kiva does not make you any money.
Rather, Kiva just helps people.
When you invest in a company through Kiva, you’re funding a third world enterprise. You are actually teaching people how to fish instead of just giving them dinner.
You look through and select a borrower. The borrowers explain their business plans and what they will use their money for. Sometimes it’s as simple as a $50 loan to buy a bike so they can ride to the community market and bring back supplies to sell in their village– and they will pay you back $5 a month for a 10 months because that $50 from you can completely change the borrower’s life.
For example:
A loan of $275 helps Janes to buy a wheelbarrow for carrying her produce from the farm to market.
A loan of $500 helps Bladimir Alejandro buy chickens.
To sweeten the deal, you don’t even have to invest $500 in Bladimir or $275 in Janes, you can invest in $25 increments to help them meet their goals.
Once your loan is paid in full, you can help someone else. Or cash out. Or throw some more money into the pot and help two people! Or ten!
I think it’s important to take a step back and remember how insanely rich all of us are. You can have such a negative net worth and be drowning in debt and the odds are that your actual living conditions trump the vast majority of the world.
Stephanie over at The Broke and Beautiful Life occasionally writes about privilege, which is a topic that really resonates with me, because you can’t help where you’re born – it’s not like I got to vote on whether I was going to a hut in on some South Pacific island or my solidly middle class New Jersey home – but you are in control od what you’re given and the privileges we have, even if you’re among the poorest Americans, utterly dwarf so many areas of the world.
To me, that privilege comes with a responsibility to help others.
And I love how easy Kiva makes it to do that.
It’s a much smarter way of ‘giving.’ I love Kiva and Heifer International for that matter.
Jason @ Phroogal recently posted…The Money Diet – a New Way to Lose Weight
I’ve never heard of Heifer International. Does it involve cows ;o) ?
It does! They give farm animals and supplies and training to people in impoverished areas (at one point including Arkansas here in the US) with the contingency that they pass the gift on. For example, when a goat has a kid you have to give it to someone in your community. They are awesome.
I’ve given through Kiva via promotions (once Jason’s!) But I think next time I give I’ll be doing it through them with my own money.
Femme Frugality recently posted…6 Reasons Writing for Blogs is the Ultimate Side Hustle for Moms
Sounds like a great way of helping others. I need to check our Kiva.
Brian recently posted…Week End Round Up #89
We are in the middle of a huge move and transition, so money is tight, but at the end of that long tunnel, I’m going to give full-time freelancing a go (eek). When I actually start earning money, Kiva is one of those places that I’d like to put some of my money. I really want to give back and help other women become entrepreneurs in their own communities!
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It is incredible how many women they feature!
I’d never heard of Kiva before and have just checked out the link you provided about Jane’s wheelbarrow loan. I’ve been considering peer to peer lending as a way of getting started with investing (only a small amount for now) and something like this would be really great. I’d love to help make a real difference to someone’s life.
Hayley @ Disease Called Debt recently posted…Financially Savvy Saturdays #98
I love how tangible your help becomes through their site. Lots of times you give to a charity and have no idea what they’re really doing with your money – it’s probably buying pens for their office – but with Kiva you know exactly who you’re helping.
Wow this sounds great, I’d never heard of Kiva before but I definitely will be checking it out.
Liz recently posted…Financially Savvy Saturdays #98
I love Kiva, almost as much as I love Heifer International! My friends are all in international nonprofit work, so I know a tonnnn about this topic. Kiva and HI seem like very legitimate orgs that help others and not make them dependent on foreign aid. For me, helping people get themselves out of desperate situations is the most important thing, which is why I prefer these organizations. From what my friends say, the people who receive aid from Kiva or HI really appreciate being able to have control over their own money and futures. It allows them to put money back into their businesses, help ailing family members, or send kids to school. That type of freedom is empowering 🙂
Melissa @ Sunburnt Saver recently posted…12 Things I’ve Learned + A Giveaway!
I agree – I think it’s always so much better to be able to give people the tools to help themselves rather than just provide them with handouts.
I too like the idea of Kiva, I just make sure to read all the details; in some cases it looks like someone is getting rich on those loans.