Some of my readers may have heard about Muhammed Yunus, winner of the 2006 Nobel Peace Prize. An economics professor, Yunnas won for being the founder of the Grameen Bank. Why is this bank so great? What their bank provides is microfinancing. What is microfinancing? It is simply loaning money to people who wouldn't be able to qualify for loans from a regular bank. The money is usually loaned in small amounts from individual donors. These small loans are consolodated by banks like the Grameen Bank and then given to the people who need the money.Why do this? The reason for doing this is to help those who have not been given the opportunities that we in the Western world have been given. The money goes to people who have a plan or a business and need some money to get it off the ground. The expectation is that the money is paid back. Some organizations that lend money this way have had a 100% repayment rate (according to one agency the worldwide repayment rate for these types of loans is 97%).
One of the organizations which has a 100% repayment rate is Kiva.org. According to their homepage they have over 43,000 people loaning over $4 million. I am one of those people and 50 of those dollars. Kiva is a really easy way to participate in microfinancing. They loan to many different areas of the world and you can choose who you loan to. You can loan as little as $25 and you get updates on your loan as it gets repaid. With Kiva, you don't get any interest, but they do charge interest so that they can pay their operating costs. You get your money back and can reloan it or withdraw it as you please.
Though it seems very much like a charity, it is not. It is a way of giving a helping hand to someone who needs it. You are not giving anyone money, you are loaning them money so they can work for themselves. It is not surprising that this idea led to a Nobel Prize.
I urge you to read up on this and if you have money to spare, you could loan some of it to someone who needs it.
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