An Introduction to Micro Loans with Kiva
An Alternative to Charity
"Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime"?
It is supposed to be an ancient Chinese proverb, but if you ask me it is just common sense. Self-sustainability is ultimately the only way to truly end poverty.
Teach a man to fish? I don't even know how to fish!
Neither do I, and even if I did, I don't have anywhere near the necessary resources which would be required to go to a developing region to teach a person to fish. However, thanks to a relatively new invention known as the "internet", there may be an even better way to allocate one's resources toward creating self-sustainability.
Kiva is an organization which facilities the dispersal of micro loans to small businesses in the developing world. Kiva isn't a bank, though. They don't actually finance loans and don't collect interest. Instead, they match people like you and I with businesses in the developing world. When you find one you like, you can lend that entrepreneur money to finance a new business or expand an existing one. A micro loan.
Perhaps the most radical factor which separates Kiva from 'charities', however, is that the entrepreneur repays the loan to you
overtime. If you loan $100, that money will be gradually sent back to
you in installments (and no, you do not make interest). When the money
is repaid, you can then reinvest it in another business, or you can withdraw it to your account.
How is this different than charity? The difference is your money is being used to directly finance a small business which can then support a family and even employ other locals in the area, further stimulating the local economy.
How do I get involved?
It's easy, just follow these steps:
1. SIGN UP at KIVA.ORG.
Kiva requires only relatively basic information, such as your name and email address to complete the sign up process. You will recieve a confirmation email which you will need to complete the registration.
Kiva does no require bank information BUT you will need a PayPal account to fund your loans.
2. SEARCH FOR A SMALL BUSINESS TO LEND TO
Once you are signed up, log in and search for your first entrepreneur to finance! You can sort by region, business sector or gender to narrow down your options. Each listing provides pictures of the people you will be helping as well as a brief profile of their business.
Loan a small business in the developing world the funds to grow their business and stimulate the local econemy! Select how much you wish to loan (you can loan as little as $25 to start with) and click Lend Now. This will direct you to a few confirmation pages, and you will then be sent to PayPal to fund your micro loan.
You've successfully empowered a developing world entrepreneur to take his or her fate into their own hands. Instead of relying on handouts, you've given them the tools to make a better life for themselves!
Every so often you will recieve payments from the entrepreneur until the full loan term is complete. This shows up as a Kiva credit which can then be reinvested in another business or withdrawn to your bank account.
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