Micro-lending is becoming an ideal method for short-term investments that allow people the opportunity to help other people. Micro-lending allows individuals to make loans for as little as $25 using Kiva. It is actually quite interesting to review the loan proposal that are presented through the website Kiva. For those who believe in giving a hand up rather than a handout, Kiva provides a socially responsible investment outlet. While not everyone has the wherewithal to be able to make these micro-loans, the ability to invest as little as $25 allows more people the opportunity for a good investment.
What is Kiva?
A review of the Kiva website, states that they were founded on the belief that most of us have a generous nature. They also believe, that given the opportunity those living in poor countries, are more than willing to do something to help themselves. Using a simple structure, Kiva has a program in place that allows a project manager, Kiva, and a lender to make a decision regarding the validity of a loan. through November, Kiva has been responsible for facilitating more than $100 million in loans.
Social responsibility
The August 30, 2009 issue of the New York Times highlighted the winning ways of making these loans. this issue told the story of “Maria”, who needed $175 to purchase a food cart to allow her to make a living to support her two children. People just like you and I, can make loans as small as $25 and help people just like Maria avoid welfare, poverty, and the misery that goes along with it.
Many of us are looking for ways to help people improve their way of life. To do this we often donate to charities. Not that we shouldn’t be giving to charity, but charity is just that – it’s a handout. Micro financing allows you to invest your charitable dollars into projects, receive those dollars back, and reinvest them into the next project. It brings a whole new meaning to the concept of pay it forward.
Loans and repayment
When you first make a loan through Kiva, what you’ll find is a full write up about the person, an assessment of the risk, and a description of what business they are trying to start. In addition, you will be able to see who else has invested in the same project. It is actually rather surprising that the default rate on loans is so small. With the number of loans that have been made, only .14% have gone into default.
After you make an investment, your loan shows up in your “portfolio”. Your portfolio will be where you follow the progress of your loan. In general, loans are for time periods of under 24 months. As payments are made, they will also show up in your portfolio. You have the option of withdrawing the funds once your loan is repaid, or you may elect to reinvest.
One of the aspects that makes Kiva such a socially responsible investment, is the percentage of loans made to women entrepreneurs. A very high percentage of loans, approximately 82.42% (according to Kiva’s website) have been made to women entrepreneurs. This alone allows you to make a socially responsible investment using Kiva. If you have not considered these types of loans, visit the Kiva website and learn more.