Tuesday, August 11, 2009

Kiva Microloans

I am glad to be back writing again. I have continued to be absent due to a variety of personal problems which seem to be improved now. My family is well as am I at this point.

I want to talk about an interesting organization, Kiva. The 2006 Nobel Peace prize went to Muhmmad Yunus and Grameen Bank from Bangledesh for their pioneering work in developing the concept of micro credit. Muhmmad Yunis is an economist who saw that one way to reduce poverty was by lending small amounts of money to start up businesses in the developing world. What he noted was that often only a little capital is required to help a third world fledging business to succeed. Helping the efforts of those trying to better their situation seemed a better idea than simply charity.

Many small or start up businesses have a hard time raising the initial capital needed. Banks tend to loan money to large borrowers and require collateral as well as a great deal of paperwork. The idea instead is small loans, collateral free which can be provided even to illiterate people. The average loan amount is about $200  U.S. dollars. The repayment rate of Muhmmad's organization has been better than 98%.

In 2005 an American couple Matt Flannery and Jessica Jackson Flannery started the organization Kiva to allow the average person to be a microloan contributor by peer to peer loans through the internet which can connect an individual to microbusinesses in the developing world. It allows anyone to essentially function like the Bill Gate's Foundation with amounts of money that are reasonable for the average person. You are able to loan as little as $25. Kiva has been endorsed by Pesident Clinton and is becoming one of the world's largest microfinance facilitators. Anyone wanting more information can find it at Kiva.org.

Thought for the day

We can make a difference one life at a time.

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