Sunday, January 04, 2009

Microfinancing



To give pleasure to a single heart by a single act is better than a thousand heads bowing in prayer.
Mohandas Gandhi


This is the reason I support Kiva. I get a tremendous sense of satisfaction that a small amount of money here, enables someone at the other end of the globe to start a business. Its creates a personal connection and when the money is repaid over time, I can take it back again or lend it out again. It amazes me what people on the other side of the world can do with a small donation and at the same time, it gives me an understanding that no matter how small our contribution here, it really has the potential to make a big difference to them. What the recipients can teach us however, is that their businesses are local, often they trade in circumstances hard for us to imagine and they are surrounded by community. Some of these businesses may not make a difference on a global scale as yet, but they enable us to reconnect with some aspect of ourselves that has been lost in last generations.

Here during the credit crunch our banks are having difficulty raising capital to loan to business and individuals. The difference with Kiva loans is that the recipients face a similar deal : the other options are that they get a loan from loan sharks that charge them over the odds just to survive and make a living. Ethically that is wrong. The other difference is that most people work very hard at their businesses, have realistic ambitions and repay their loans on time. That is something to be admired, in a business climate in the West that is often the opposite.

As an investment I feel that I will get a better value return on a loan to a Kiva recipient because it stimulates an economy at the other end of the globe, it gives me a personal connection and empathy. It also provides a feel good factor. I do not get the same from putting the $ 25 equivalent into my savings account. The interest paid by the loan compounds to enable me to loan more to more people.

2 comments:

timx said...

I have known of, and admired, this system for some time. It is a continuing source of frustration for me that being on a fixed low income as an OAP, with no savings and a perpetual overdraft, I am not in a position to help! It is clear to me that we in this country will increasingly need to learn from this type of small localised business, and if we don't learn these lessons we will find long term survival much more difficult. Those businesses will find it much easier than we will to cope with the problems arising from Peak Oil, which, some experts say, has already happened!

dancingonabladeofgrass said...

I have just come across your lovely blog and am just looking at the KIVA website ... what a wonderful idea ... it makes SO much sense!

Sandie