|Georgina Virginia Navarro Ruiz with the groceries Kiva loans helped her to buy|
April is the Month of Microfinancing, so this seems like a good time to talk about something that I think is a really great initiative. You might remember the Oxfam adverts that said, “Give a man a fish and he will feed himself and his family for a day, but give a man a net and teach him to fish and he will feed himself and his family for a lifetime.” The basic premise of that phrase is that low-income individuals are capable of lifting themselves out of poverty if they are given the basic tools to do so. This is also the principal philosophy behind microfinancing.
Microfinancing is a way of extending credit to those who don’t have the kind of collateral needed for a bank loan. It has been shown to be particularly beneficial to women living in poverty as they usually have no access to financial aid. It’s commonly said that empowering women through education or access to a steady income empowers an entire community; women such as Anisa Tarboosh who is now a prominent member of her community, in part thanks to microfinancing.
There are several initiatives that can allow individuals to become microlenders, but the one I have personal experience with is Kiva.org. Kiva is essentially a way of giving to charity... but then you can get your money back. Donations are a minimum of $25 (which may seem like a lot, but remember, you’re almost certainly going to get your money back!). When you log onto the site you can then choose your borrower. Each borrower has a profile and profile picture, explaining who they are and what they need a loan for. This personal side to giving really appeals to me – since being on the site, I have donated money to Agustina so she can buy furniture for her pub and to Georgina so she can buy basic groceries for her general store, both in Peru.
Kiva provides you with statistical breakdowns of your loans by gender, country and sector which is actually really interesting as you can see which sectors you invest most in, and whether you have a gender bias – I favour women working in the food industry in Peru, it seems.
As the borrower repays the loan, Kiva email you with updates on their progress as well as informing you how much of your money has been repaid. Once the whole amount has been repaid you can choose to give again or withdraw your money. I’ve been a member of the site for about four years now and for my initial $25 investment I have actually donated $225! Not a bad investment and certainly more money than I would normally be able to donate to charity.
Kiva itself recognises that whilst microfinancing can play a significant role in alleviating poverty, it is not always the most appropriate method. However, it is definitely a useful tool and, to be honest, I LOVE being a microlender. It’s a way of giving to charity – potentially a significant amount over time – but without spending money! Win-win all round.
You can go here to watch a cute video that further explains Kiva’s work, or go here to sign up to the site itself.
Girl Museum Inc.