Kiva.org: A Stroke of Brilliance

So I logged into MySpace yesterday and was greeted with banners telling me about a new MySpace section about making a difference in the world and all of that. This being related to my purpose in life, I clicked on it to see if it was all talk or if there was anything real to it.

To my surprise, there was.

Amidst the fluff and vague optimism was a link to Kiva.org. This website is using a truly unique idea to help people out of poverty in poor countries. It involves people with money giving money to people without money. But it's a far cry from the generic donate-money-to-some-charity-and hope-it-gets-to-an-African-kid-and-not-the-CEO-of-the-charity stuff that usually stops me from running to charities with even some of the little money that I have.

At Kiva.org, you lend money to an entrepreneur in another country (translation: somebody trying to start a business but having no money to meet the start-up costs), and after they get their business going, they pay you back. Kiva hooks up with your PayPal account (used safely by millions of eBayers to take care of the transaction)

Sound like a scam? Far from it.

I googled "Kiva.org" to see what people were saying about it. You know, see if it was for real and if it really worked. Well, that took me to the Wikipedia page for Kiva.org (yeah, there's a page for everything), which told me that

1) this thing is being supported and encouraged by PayPal (duh), MySpace (where I found it), YouTube, Google, and Microsoft. With these gigantic corporations involved, it doesn't sound like a sneaky scam for your money.

2) Depending on which part of the Wikipedia article you read, these loans are being repayed, a few months or a year later, at a rate of 100% or 99%.

"In a little over a year, Kiva has rapidly grown to become the most trafficked site in microfinance with +35,000 Internet lenders generating +$3 million in loans to thousands of entrepreneurs in +25 developing countries – all with a +99% on time repayment rate thus far. Kiva is staffed and governed by experienced consumer Internet and microfinance leaders."

Just go to Kiva.org and look at the home page. These aren't random guys from poor countries asking for some money with a vague idea of starting a business with it. They're asking for specific amounts to meet specific needs to get a specific business going in a specific location. You can donate in multiplies of $25 to meet a percentage of their need. Kiva takes care of the rest. A few months later, their business is going, and you get your money back. You can then reinvest or keep it.

So, what do you have to lose? Nothing. Unless you just happen to invest in the less than 1% whose business fails. And even that seems more productive than donating to a random charity, where you have no idea where the money goes or what good it does.

I'm definitely going to pick somebody and lend some money. You should, too. Especially if you have a job. If you have more than a couple hundred dollars sitting in the bank, taking out $50 of it has no real effect on your life. And then, a year later, when you get it back, it'll feel like free money, and you'll know (not just hope) that you helped somebody out by getting a business going in a poor country.

This is an excellent idea and I offer it my full support.

Edmond the Hun