I had an email from a former boss I used to work with, inviting me to join an organisation which offers micro-credit loans to people in developing nations. Rather than the usual idea of using big banks, all the funds come from individuals – which rather caught my eye.
I opened an account – which was very easy (and commitment free) to do – and then you can have a browse around looking for people seeking funding for their business.
The sorts of loans can be for anything from buying a refrigerator so a food shop can sell cold drinks to buying animals so that a farmer can expand his herd.
Important to note – these are actual loans, not donations – and they are repaid over time. The loans are interest free to the borrower, so this is not a way for me to make any money – but if I have a spare $50 lying around earning a crumb in interest from my bank – I think I can get a much better “moral return” on my spare cash by lending it to someone who needs it.
Made my first loan this evening after spending time looking around – quite a small amount, but it really made me feel good about something. Conveniently, I was able to use surplus cash in my PayPal account.
Throughout the course of the loan (usually 6-12 months), I can receive email journal updates from the business I’ve sponsored. As loans are repaid, I get my money back.
The default rate – that being people who do not repay their loan on time is a tiny 0.22%, so the risk to me is almost insignificant (probably equivalent to losing a pint of beer a month)
Incidentally, “Kiva” is a Swahili word which means “unity” or “agreement”.
Hope to see you on there!