Microfinancing and Kiva

A loan of $2,950 helps Shamigul to buy three head of cattle and feed to start a new business.

Anyone who has ever watched the nightly news or read a newspaper can tell you that there are major issues across the world, from hunger to poverty to gender discrimination. At this point, I could go into detail about one of these things and tell you all about the great extent of it and how awful it is. However, you can find that rant in any number of other places – just Google your topic. Instead of confirming problems, I would rather present solutions.

There are any number of ways to help out with world issues, from donating to CAMFED to contributing to Doctors Without Borders. While these organizations are worthy and proven pursuits, I would like to offer a possibly better solution: microfinance.  Microfinance is a method of lending money to borrowers – usually to purchase raw materials or equipment for a trade – who then pay you back after selling their merchandise/service. These loans can be made to anyone, meaning that you decide what person/cause you want your money to be towards. This opens up microfinance to any and all world issues. However, the best part is that you get your money back in the end, so you can re-donate it or take it back, therefore losing no money and allowing someone else in the world to fight poverty at the same time.

One of the most effective microfinance organizations is called Kiva. They have a 99.00% repay rate, and have lent $490,202,200 to date. Also, you can donate as little as $25, meaning that you can make a difference with much less money in this way than with other ways. You get to pick who you lend money to, you can see a picture of him or her, how much money they’re borrowing, what they’re using it for, and you receive updates on how much has been repaid. This brings a personal aspect to the process of helping end world issues, and allows you to see the direct results of your money. This is unlike donating to some other places, where it seems like you’re throwing money into a black hole, never to be seen again. This makes Kiva not only financially stable and trusted, but also satisfying and safe.

by Jed Gist

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