05 April, 2008

Do it yourself microlending

Several Christmases ago, my brother gave me a very interesting gift: an account on Kiva, a microfinance website. Kiva is "the world's first person-to-person micro-lending website, empowering individuals to lend directly to unique entrepreneurs in the developing world." So I have $25 of credit on the site, which I choose to lend to Manuel Roman Arevalo Lopez, a small business owner in Mexico, and which he agrees to pay back over 6 months or less. At which point, I can re-lend to whomever strikes my fancy.

Personally, I think this is a pretty cool service, and exactly the type of thing that the internet can excel at: pairing lenders and clients too small to be participants in the normal banking system. I have lent a couple times, and have always been repaid. I recommend the site, whether you invest $25 (like me) or $200 -- it is an excellent way to both promote international wealth distribution with market-friendly, pro-growth mechanisms.


higgy said...

I went to an Indian/vegetarian-cuisine buffet on Penn's campus 2 weeks ago that was a benefit for KIVA. It was put on by the Penn Hindi and Jain student group, and they served us delicious southern and northern Indian food while providing lectures on micro-financing. It was an excellent (and delicious) experience, and I'm glad to see support for such organizations.

spencer said...

Someone I knew in college worked with Kiva to implement a randomly-assigned microlending program in Kenya. Here is a blog she wrote while an intern for Kiva:


Cassady said...

That's so weird! I got involved with this a while back. My soon-to-be brother-in-law is a big econ/business guy in grad school at Kellogg and told me about it.

I've loaned a couple hundred over the past months to some pretty interesting people. Rather rewarding, you might say.