Over the past few weeks, I have become a banker. Well, more precisely, I became a micro-banker. I lent (loaned?) US$25.00 to a lady in Mongolia, which was the final little bit of cash she needed in order to expand her small business, which in turn should help her to improve her financial circumstances. I then loaned (lent?) US$25.00 to a taxi-driver in Tajikistan so that he could purchase sheep and goats (presumably for food and some extra income.)
This was all done through the auspices of Kiva Microfunds, a non-profit organization dedicated to aggregating small loan amounts from many lenders — ordinary individuals like me — into micro-loans. Lenders choose the individual whom they wish to fund, and the money is disbursed at the other end (usually but not exclusively in the developing world) by a local partner, usually a bank. These individuals are entrepreneurs — maybe livestock farmers, or small merchants — who would like to expand their operations. Maybe they’d like to purchase some more chickens to increase their egg production, or a new sewing machine to make their tailor shop more efficient.
Over a set number of months, the borrower repays the cost to the lender, who can then re-lend the money to another entrepreneur. Everybody wins. I especially like the idea of small business people making their communities stronger, with sustainable increases in wealth arising from increased economic strength.
You can read more about Kiva and its projects here. Last week alone, Kiva’s lenders put up more than $1,550,000.00 to some 4138 individual projects — each of these micro-loans totalling an average $375, and each one having the potential to lift a family out of grinding poverty. Who knows where this could end?
Maybe Kiva, and other grass-roots organizations like it, could end poverty. I’m willing to give it a try.