I want to invest in others. Being able to give money to those that need it is great. There is only one obstacle that is stopping me from this goal – I’m not rich. My luck! Not having enough money stops me from investing in others!
Kiva (kiva.org) allows me to accomplish this goal. It gives me the opportunity to be a partial investor in a business or businesses. In their own words,
“Kiva lets you connect with and loan money to unique small businesses in the developing world. By choosing a business on Kiva.org, you can “sponsor a business” and help the world’s working poor make great strides towards economic independence. Throughout the course of the loan (usually 6-12 months), you can receive email journal updates from the business you’ve sponsored. As loans are repaid, you get your loan money back.”
Let’s look at a make believe example.
Carla lives in Brazil. She makes blankets and want to start a business selling them. She needs $500 to buy a space and buy shelving for her store.
Kiva allows you to loan Carla money in increments of $25.00 You can loan her $25, $50, $100, and so on. Others can also loan her money.
Carla pays her loan back to Kiva who in return pays you. There is no interest. This is not a traditional investment where you make money on the loan.
I think this is a great idea. However, action talks and bullshit walks! It is easy for me to write about this organization, but why not put my money where my mouth is! I made two fifty dollar loans.
I made my first loan to an electrician in Paraguay. I chose this business because I wanted my first loan to go to a person from either Central or South America; I teach many students from Central and South America. I’ve become close to the people from these continents. Here’s Martin’s story.
“Martin is 45 years old, and married to Bernarda Roja. The couple have three children: the oldest is 20 years old and is a university student, their other son is 16 and is studying at middle-school. Their youngest daughter is 11 and is still in primary school.
In his youth he worked in the Yacyreta hydro-electric plant, where he was able to accumulate capital through saving his money through much personal sacrifice and then establish his own workshop for car electrics. Now he has 20 years experience in the business. His wife cares for a store that operates from their own home which also generates extra income for the family.
One part of the loan will be used to buy spare parts related to his business, which can be obtained for a better price if bought in bulk, and the other part of the loan will be used to purchase merchandise for the grocery-store. In this way, they will increase the family’s income and consequently its members quality of life.”
My second fifty dollar loan went to a lady in Nigeria. Healthcare is a vital issue. Here is Mrs. Comfort Eseneh story.
“Mrs. Comfort Eseneh is a 58 year old woman, who has a chemist shop (pharmacy) for the care of people in her community. She is married with seven (7) children, and lives in Benin City, Nigeria. She hopes to get the loan amount of $400 for business improvement, i.e., buying more drugs for sale. She has been in this business for 2 years.”
Kiva has an excellent repayment record. They do thier due diligence. Here’s some more info from their site.
- What We Do (www.kiva.org/app.php?page=about)
- How Kiva Works (www.kiva.org/app.php?page=about&action=how)
- Risk and Due Diligence (www.kiva.org/app.php?page=about&action=risk__overview)
This can be a great school project and a way to teach students about giving. Teachers can incorporate geography, social studies, and other topics related to the country where the business person lives.
You make your payment with a credit card or through your PayPal account. At the checkout, Kiva will ask if you want to make a 10% donation based on your loan to them. Kiva takes no money from the loan. All of my $100 is split between Martin and Mrs. Comfort Eseneh. I donated 10% to Kiva ($10.00 based on my loan).