Sunday, September 21, 2008

Check It Out: Kiva

I added a link in the sidebar to kiva.org, a sort of microfinance aggregator/interface that puts small lending organizations in developing countries in contact with the people who have a bit of money to lend. Lots of you have probably heard of it before, and it's pretty cool. So far I've lent to a clothing vendor in Ghana and a small farmer in Peru. You don't get a tax receipt apart from the recommended 10% donation to Kiva's own operations (obviously, since you are getting the money back once the loan is repaid). But I think the idea of pumping a little capital into the economy of a country, while keeping it out of the potentially corrupt hands of the domestic governments, is much more valuable than a tax break on a straight donation. Loaning like this lets people exercise the agency to help themselves, which will probably have better long-term results for communities than aid alone.
So there you go. A brief weekend update: this weekend is kind of sucking hardcore. At about noon on Friday, I got a cold, and so now I am thoroughly disgusting and all of my fun plans for coffee and parties and such have been scuppered. My respiratory system is such a piece of junk sometimes. Friggin' Achilles lung.

3 comments:

Unknown said...

Interesting site Jess. Do you know if you make interest when you invest and if so at what rate? I can't seem to find it on the site but I haven't looked very long. Also, you should come over some time to see our new apartment. We've been slowly moving in but the previous tenants were brutal to the place as they were hippies with cats and apparently no litter box.

Jessica said...

Hi!

That's the other disadvantage - there's no interest, so there's kind of an opportunity cost thing. You get your money back and you can reinvest it in other Kiva projects or pull it out, but you don't earn interest and you don't get a tax receipt on anything but the direct donation to Kiva (10% of your total is the recommended amount).

I will indeed have to come check out the new place! I'm sure the de-cattification operations are going swimmingly.

Unknown said...

Indeed,
I think what is more interesting - if you look at the FAQs - is that they charge a "high interest" rate to the people who do the borrowing because it is "high risk". So if Kiva is charging interest, why don't we get paid interest? Check it out:
http://www.kiva.org/about/microfinance#6._Why_are_microcredit_interest_rates