I've made 30 loans now, one for each year of my life.

[flexagon]

New Kiva loans for May:

$100 to Pong Chanthy in Cambodia, toward purchase of a new sewing machine.
$100 to Khotam Bustonov in Tajikistan, for purchase of construction equipment.

I was able to make two loans instead of one this month, because I experienced my first default; a microfinance group called SEED, it turns out, was not passing along 100% of the capital raised through Kiva to its entrepreneurs. Kiva has ended that partnership and announced a default on loans made through SEED, but my SEED-based loan was almost entirely paid back anyway... the field partner was the bad apple, not my entrepreneur. I just rounded up a smidge to give myself an even hundred in Kiva credit as if it had been paid back, and off I went. I'm getting stricter about making loans only to people who are buying equipment or education, rather than the many many people who are just buying goods to sell in a store.

(Join me? You only need $25.)


As a side note, I don't think I've mentioned that Zopa is now up and running in the United States. It offers a way to make loans to those who need them in the good old US of A... and yes, I am conflicted about this. As most of you know, I do the microfinance thing in order to fight poverty, and I've been doing it since before Zopa existed. I find myself torn between making loans to those in the third world, where my money goes a long long way and can make a real difference to people's quality of life, and wanting to put money to work locally. I could be helping wlaffin here in Brighton. There are other borrowers in Massachusetts as well.

Global vs local... what do you think? I was very touched by reading Deep Economy a year or so ago, and it sold me on the idea of acting locally to fund the local eco-finance-web and keep it robust. Still... it's kind of telling that most of the requested American loans on Zopa are for paying off existing, higher-interest loans. These people are trying to do a smart thing, and yet their case isn't all that compelling to me.

Comments

[bluechromis.livejournal.com]

Zopa reminds me of prosper.com

Their cases aren't all that compelling to me either - I mean, credit card debt from xmas shopping? Clearly not a charity case. But the loans do pay interest, as opposed to the kiva loans, so I guess you're balancing out your financial interests with theirs. Helping someone who's gotten themselves into a bind, and making a small amount of money yourself. Kiva seems more meaningful to me though.

That said, I've considered prosper in order to help with some of my credit card debt from last year. If you want to sponsor a local needy party I have an idea. :P :P :P :P

[flexagon]

Zopa and prosper are good ideas... you're right, they basically split the difference between the high interest rates borrowers are usually already paying on their credit cards and the low interest lenders are usually already making in their bank accounts. It's a fine deal for both parties, financially, and if I were sure I wasn't remodeling the kitchen soon, I'd consider a Zopa CD as a temporary home for that money. It just doesn't seem as rewarding... plus, the actual amount of money required to significantly help a person in a first-world country is huge. I don't see the Kiva folks as charity cases either, actually -- they are people with business plans and a customer base, and I respect them. They're small-scale, though, and that makes them easier to help.

Even so... as someone who grew up poor in a first-world country, I hate to think I'm not doing things to help people who are basically like I was. Maybe that's part of my issue with most of the Zopa/Prosper stuff... I never got myself in credit card debt with my Xmas shopping, so I feel rather less sympathy.

That said, if you get a prosper loan, do let me know how it goes. It is interesting. :)