I first heard about microcredit when Bangladeshi economist Muhammad Yunus won the 2006 Nobel Peace Prize this past year. I was captivated by his story and quickly read his book "Banker to the Poor." His concept to help alleviate world poverty is elegantly simple yet radically effective. Many suffering in poverty could work their way out of their horrible conditions with the help of a tiny loan...a loan that allows them to start a business or enhance an already existing business. The problem arises when they seek loans from their local third world bank or money lender which charge exhorbitant lending rates.Microcredit allows an enterprising person to borrow a sum that is almost insignificant by first world standards with little or no percentage rates. They work with local NGO's to make sure worthy candidates are screened and enabled to pay the loan back in a timely manner. PBS and the New York Times a few months ago featured one of these microlending operations on Frontline: World. KIVA (meaning 'unity' in Swahili) allows people to loan as little as $25 to a recipient in a third world nation. Kiva also allows lenders to keep up with their loan recipient's progress. So far 100% of the loans have been repaid. Slate.com recommends Kiva as one of the best microlenders to use.
I made my first loan today to a middle aged woman in Mexico who is trying to support her family through the sale of ceramics. You can check out her story at http://www.kiva.org/lender/david5133. Even if I don't get my money back ($25) I'll just consider it a donation.
I went with someone in Mexico because people in Texas are always debating immigration. I believe in helping people where they are rather than just complaining about people moving here. If we can empower our neighbors they won't have to make the difficult decision to leave home in the first place. When she repays the loan...I'll reinvest in another loan. Besides, it's money I received for my birthday. This is a much more fulfilling way to spend my money. And it's not just a donation. Its money that's helping empower someone to help themselves lift themselves out of poverty and in turn make a positive difference in their community.
Check out www.kiva.org. They're safe and reputable and they're doing a wonderful thing. It doesn't take much to be an international micro-financier with great organizations like Kiva facilitating the process.
