Spreading the Wealth

I live a good life. In fact, even when I’ve struggled to pay rent and other expenses, I have always had the luxury of running water, heating/cooling, and electricity. Food has never been scarce, nor has it ever been difficult to purchase products for my household or physical needs. I’ve had access to credit which made achieving some goals possible, such as buying a car and getting an education. I am so very blessed.

Meanwhile, here are some facts and figures to provide perspective. Half the world — nearly three billion people — live on less than two dollars a day; 20% of the population in the developed nations, consume 86% of the world’s goods. The poorer the country, the more likely it is that debt repayments are being extracted directly from people who neither contracted the loans nor received any of the money. Approximately 790 million people in the developing world are still chronically undernourished, almost two-thirds of whom reside in Asia and the Pacific. A mere 12 percent of the world’s population uses 85 percent of its water, and these 12 percent do not live in the Third World. The richest 50 million people in Europe and North America have the same income as 2.7 billion poor people. “The slice of the cake taken by 1% is the same size as that handed to the poorest 57%.” (Info from Global Issues.)

Instead of feeling guilty, I decided to do something constructive. Have you ever heard of microlending? It’s a means of assisting other people across the world by lending some of your money to them. It’s not a donation or charity. The loan is repaid. One of the organizations that facilitate the process is Kiva. From their website:

Kiva lets you connect with and loan money to unique small businesses in the developing world. By choosing a business on Kiva.org, you can “sponsor a business” and help the world’s working poor make great strides towards economic independence. Throughout the course of the loan (usually 6-12 months), you can receive email journal updates from the business you’ve sponsored. As loans are repaid, you get your loan money back.

Kiva partners with existing microfinance institutions. In doing so, we gain access to outstanding entrepreneurs from impoverished communities world-wide. Our partners are experts in choosing qualified borrowers. That said, they are usually short on funds. Through Kiva.org, our partners upload their borrower profiles directly to the site so you can lend to them.

You just visit the site and look at the businesses needing loans. You can loan as little as $25 (a night at the movies, a week of Venti lattes). You will then receive email updates on how the business is doing. Once the loan is repaid, you can withdraw the money from Kiva or lend it again. Kiva has experienced a 100% repayment rate on all businesses with completed loans. Over the past three decades, more than 100 million of the world’s poor have demonstrated a greater than 95% repayment rate in micro-loans. Yes, there is a risk you might not get your money back. But it’s not a huge amount of money to begin with. The loans are interest-free, so you don’t make money. Since these are not donations, they are not tax-deductible. Yet Kiva takes no cut of the loan either; you can donate money to help them and it’s tax deductible.

So as of yesterday I’ve financed four businesses, two of which have been fully funded. Here are the two in my portfoloio still in need of funding. You can see more businesses here. Join in and enjoy the feeling of changing lives for the better.

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3 Comments on “Spreading the Wealth”

  1. leah Says:

    oh, this is great kathryn! thank you for pointing it out. i participated in something similar last year and i love the idea behind it. xoxox

  2. gerry rosser Says:

    Sounds like a neat idea.
    I think that much of the money loaned to “countries” goes into the pockets and Swiss/Cayman bank accounts of corrupt officials, but enforcement/collection goes onto the backs of the people. I think institutions which loan to “countries” should have to look for repayment to the officials they deal with. If that means less loans, well, who cares, are the loans doing anything for the ordinary people anyway?

  3. Liora Says:

    Neat idea. Wish I had money to lend. Maybe someday when I’m done borrowing myself…