The other night I caught two interesting episodes of "Frontline." The first, about soldiers fighting insurgents in Afghanistan, was pretty disheartening. But the second episode was unexpectedly uplifting.
It's about a nonprofit organization called Kiva. Kiva does "microfinancing" -- lending to small businesses, very small businesses, in developing countries. Kiva works with partners in countries around the world, like Kenya, Ukraine and Haiti, to find entrepreneurs in need of loans. When I say these are small businesses, I do mean small: individuals mostly, trying to carve out a better life for themselves by working hard to create a business and making it turn some sort of profit. One of the entrepreneurs featured on Frontline started her own peanut-butter-making business and her loan, a relatively small amount by business standards, helped her expand and sell more peanut butter. The loan amounts range from as small as $100 to a few thousand.
The really fascinating part is how Kiva has harnessed the unique power of the internet to bring individuals together. Anybody can go to the Kiva website and use a credit card or Paypal to make a loan to one of these entrepreneurs. You don't need connections to some kind of banking industry, or a large portfolio to invest in these hard-working folks; just a credit card or Paypal account and a desire to help. You don't have to fund the whole amount of the loan; you can contribute, say, $25, and a bunch of other people can do the same thing to reach the total amount needed. You can even communicate with your borrower and get updates from them on how their business is doing. And they can get to communicate directly with the person who is helping them out. The brilliance of this is astonishing. Allowing people to directly connect with one another, to see how their money is making a direct difference in helping someone become financially self-sufficient, takes advantage of the best qualities the internet has to offer.
Now, most of you who read this blog are knitters. One of the cool things about the website is how it lets you sift through the profiles of entrepreneurs to find someone you feel a connection to. How about Beatrice, who runs a knitting and spinning shop in Nairobi? Or Rita, who is supporting five kids and makes knitted sweaters to sell to schools? She wants to finance an industrial knitting machine so she can ramp up her production. Love your local yarn shop? Take a look at Veselina's, in a market in Bulgaria.
The more hard-headed among you may be interested to know that as of now, no one has defaulted on any of the loans and no one is behind in their payments. You don't earn interest on your loan, so you don't accrue any income that is taxable.
I'm not trying to be pushy. People have to decide for themselves whether and how they like to help others. But Kiva is a cool organization -- innovative, creative and well thought-out. I'm throwing it out there for those of you who've never heard of it. Right now, response to the Frontline episode was so overwhelming that all of their current entrepreneurs are funded, but the website promises more profiles seeking loans soon.