Wednesday, April 14, 2010

Be a loaner. Recycle your money (re-post)


Kiva - loans that change lives

KIVA.org
By: Brad Arsenault

Perhaps our most favorite charity to work with isn’t really a charity at all in the traditional sense of the term. Kiva.org is a microcredit lending agency that works closely with “microcredit partners” around the globe to identify and assess small entrepreneurs in need. Generally loan requests average a few thousands US dollars and quite simply the money collectively comes from you and I.

Kiva’s mission is to connect people through lending for the sake of alleviating poverty. Kiva is the world’s first person-to-person micro-lending website, empowering individuals to lend to unique entrepreneurs around the globe.

Through the brilliance of the Internet, Kiva.org allows users to set up an account and connect funds via your PayPal account or credit card to loan money to businesses in need. These are zero interest loans that have terms of 1-2 years. And guess what? As it has been stated in the past by Nobel Prize winner, Muhammad Yunus, Grameen Bank, Founder, “the poor always pay.” The chances of you not getting your money back are slim at roughly 1%. Therefore, 99% of your loan money, which is generally a minimum of $25USD, is pretty much guaranteed to come back.

Of the several loans we’ve made through Kiva.org over the past 2+ years there has been only one business that has defaulted and even then, Kiva worked closely with its lending partner to get back a good portion of the funds. Thus, of our $25 loan, we still got back about 75% of it.

You can make an incredible difference with as little as $25. AND THE MOST AMAZING PART - Once the money has been paid back, it’s your choice to re-loan it or withdraw it. Imagine the thrill, and satisfaction of knowing that a few hundred dollars of yours is helping lift people out poverty around the globe over and over again.

A good friend once said to me that charities should not be about “hand-outs” rather “a hand-up.”
As the old adage goes,
 “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.”

Brad Arsenault is a cofounder of Shaw Treatment, Inc. a Canadian body care products company and social enterprise.

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