“Microcredit is the extension of very small loans (microloans) to the unemployed, to poor entrepreneurs and to others living in poverty who are not considered bankable. These individuals lack collateral, steady employment and a verifiable credit history and therefore cannot meet even the most minimal qualifications to gain access to traditional credit. Microcredit is a part of microfinance, which is the provision of a wider range of financial services to the very poor.”
Personally, I am also a big fan of the book “The World is Flat” by Thomas L. Friedman which in part talks about the concept that if you give people hope and say in their own future then they are much less likely to become militant against what they see as an unfair system (basically). Having started my own business I strongly believe that support budding entrepreneurs is a way to not only improve their lives but their families, their communities, and so on up the food chain.
Other IT people ask me why I spend time doing things like my free online videos, my blog, my Sharepoint site, my free documents, contribute to the local SBS user group, recycled computers at no cost, offer business mentoring and so on? Sure I ask for donations to assist with these but basically the donations so far haven’t even reached double digits (no kidding), so they are basically done off my own back. Why do I do this? Simple, when I first started out in my own I had no one to assist me and I had to basically figure it all out for myself and I can tell you at times it was a REAL struggle. I vowed then, that I would never let that happen to someone else if I could help it, so today I do what I can.
One of my plans with the recycled computers was to eventually send machines overseas to try and help people who really don’t have the opportunities that we today take for granted. Well, that plan proved too expensive once you start working out the costs of getting machines overseas. It did not however dim my concerns for places like Africa where they are just falling further and further behind everyday. If you are like me you feel that you should contribute to things like World Vision but you strangely don’t feel fulfilled by simply donating money that gets dolled out as they see fit. You are also aware of the stories of the abuse of funds that sometime happens in these organisations.
However, while reading a recent article in Fortune magazine, I was alerted to kiva.org, which basically allows you to make contributions and allocate those funds to local entrepreneurs in places like Africa and Asia to expand their businesses. Based on the idea of the microcredit, the funds you provide are loans to these people who repay them over a set time period. The great thing is that you can start with as little as USD $25 and pick someone from a list of people on the web site. Once you have selected someone, others will also contribute until the required amount is reached. During the life of the loan you are provided with updates of the project and the repayments. Once the loan is repaid then you can allocate those funds to another project or withdrawn if you wish.
If you are still cynical I highly recommend you visit the Kiva we site to learn more. I also recommend you read the following article from Stamford University and finally this blog entry from Guy Kawaski (of Apple fame) as further evidence of the merits of what Kiva is trying to achieve. Still doubtful about loaning money to someone in Africa? The repayment rate is greater than 99.67 percent! And the chances are that if a payment isn’t made it isn’t because the person has absconded with the money, typically they have been sick (lack of medicine) or someone in their family has been sick (again, lack of medicine) or there has been a natural or political upheaval (how easy we believe WE are being ripped off when something we would never even think of has happened!). Each potential business you loan to also has a repayment rating to help you make your choice.
The Kiva website has all the details and makes it easy to get started via a credit card payment. You can track all the people you have loaned money to as well as other who are contributing from all over the world. I can’t tell you what a GREAT idea I feel this really is and how technology has made it even easier to get funds to people to grow their business and improve their lives.
I am extremely proud to now say that I am a Kiva supporter and have also convinced my family to provide assistance as well. Now I am asking others out there to look at Kiva and see whether they too could lend a hand. I have been very blessed in my my life and I hope in some small way that with Kiva I can at least help someone else that once I was unable to.