Sixteen Honest Women

I thought it was time for a quick update on how things are going with my micro finance experiments with KIVA. Kiva is an organisation that negotiates small loans to individuals in the third world. (More on KIVA Here)

This post concerns a loan I made ($25.00) to a Paraguayan business being run by sixteen women. It has just come to term.

The Paraguayan New Horizons group. Loan repaid in full

About 120 of us built the loan so the total loan amount was $2750.00.  The loan was for this group to purchase stock so they could be self supporting, running their own catering business.  While the interest on the loan is consumed by the micro-finance bank as their fee for the arrangement, I still got back the money I lent out. On time and to the penny.

If I want, I can now withdraw the money, or I can re-lend it out. Probably the latter - for now

Needless to say, standard greedy banking practice would not have entertained such a paltry loan. Especially to a group of women in a third world country. They would much rather lend a few million quid to some corrupt elite so they can buy a few nice new Limo's or rocket launchers, and then default.

So, in the Third World, honest but poor people repay their loans. Unlike many of their ruling elites.

Sound familiar?

Meanwhile here, every major charity consumes all of you money. Your money disappears into a black hole.

Has it done any good? - the guilt ridden propaganda says so.

Or has it just lined the pockets of the Great and the Good?

You tell me.

At least with Kiva you have the opportunity of getting your money back - and seeing who it is lent out to. OK you take a small risk that the loan may go bad. But Hey! That's life.

Say you committed to "give" £15.00 a month to some standard charity to do some anonymous "good" work. Over 20 years that is £3600. Gone

If you lend it out through Kiva after 20 years that money will still be there. Owned by you. It can still be re-lent out or if you or your family need it, then it can be withdrawn. In the mean time it has been helping poor but honest folk in need of a break.

Remember charity should always begin at home. You and your kids come first. So being able to get the money back if needed is a real boon. But this is a really good way of doing a lot of good for common ordinary folk without much risk to your own personal assets.

It is also really satisfying to see you money being used for tangible social gain by real people. That is the beauty of Kiva.

The alternative is the guilty "donation". The medieval style indulgence to compensate for the crime of being born in a developed country.

Maybe your  donation will do some good. Or maybe it will disappear into the coffers of a Mercedes dealership or some Swiss bank account.

At least with Kiva you get a chance of seeing where your money goes.

From now on, when it comes to charity, I'm giving loans, not casting money to the wind like some Victorian Oligarque.

No more guilt trips. No more palm greasing. And certainly no more 500 Series Mercedes for the Great and Good.

From now on, It is Kiva for me.


21st Century Pillock said...

I have recently started using Kiva, and I have to say I do like the idea of helping someone with a fairly good idea that the person you intended (or someone like them) is going to get the most out of it.

The problem with taking such a dim view of the more traditional charities as being used by the elites to fill their pockets, is that it doesn't help those who aren't in a position to become entrepreneurs.

Call it guilt but I still throw some money to a charity each month, because you never know someone useful might get it.

BilloTheWisp said...

I take your point and I suppose I have been somewhat OTT with my blanket criticism of all traditional charities. I doubt whether I will actually stop completely donating to traditional charities (especially for an emergency). But I do believe that Kiva does offer a better and more honourable way (form both parties) and also offers greater financial leverage that goes directly to those who both need it AND will make a difference. Too much aid, whether governmental or NGO gets squandered on bureaucracy, graft or corruption.
Anway nice to hear from a felow Kiva fan!