Monday, January 26, 2009

Good Lending News

After all the recent bad news financial news and the oft-reported shortage of funds available for lending, I was a bit surprised to come across a situation on Kiva.org that's the exact opposite.

Kiva is a person-to-person microfinance website that connects lenders with entrepreneurs (generally in 3rd world countries). Their mission is to "connect people through lending for the sake of alleviating poverty." Most lenders put in $25, which is consolidated with funds from other lenders to make loans ranging from $25 to $5,000.  

I got a gift certificate to Kiva for Christmas, and when I went over there to find a loan to contribue to, there were only 3 to chose from. There was also a link to the following explanation:
Why are there so few fundraising loans?
Kiva is constantly receiving new loans for funding from our microfinance Field Partners all around the world. Due to press, new features, or outreach efforts, at times we have more lenders visiting Kiva than we have fundraising loans. At these times there may be only a small number of fundraising loans on this page. However, this is always a temporary situation, as our Field Partners post new fundraising loans on an hourly basis. So, if there are only a few fundraising loans available, please check back soon! Kiva's volunteers are working hard to translate new loan requests as fast as possible, and our Field Partners are always excited to see loans funded so quickly!
Looks like the supply is more than adequate to the demand. Nice! 

In fact, as I poked around the site, a new loan request popped up, while other requests got filled - completely! In fact, as I surveyed the list, each time I clicked on a loan that said "75% raised" or "50% raised," I'd get to the actual loan page only to find it was 100% raised already... in just minutes. Man, if you find a loan that looks interesting, you've got to jump on it right away, or it'll be fulfilled before you have a chance to contribute.

 Kiva made loans to over 3,000 entrepreneurs this week alone. I'm convinced person-to-person microfinance works (for example, the default rate is a remarkably low 2.6%). It's distributist. It's FISTy (that's Fast, Inexpensive, Simple & Tiny for those who don't know). It's a beautiful thing. I'm still looking for a loan to contribut to, but I'll keep everyone posted here as things develop.

Anyone out there have a story about microfinance, either with Kiva or any of the other similar organizations?

1 comment:

Kim said...

Last night's NBC News did a Making a Difference story about micro loans from an organization called Pro Mujer (For Women) in Bolivia.
Check out the story here: http://www.msnbc.msn.com/id/3032619/#28843001