Microcredit: You Too Can Be A Banker by R.Siva
Anyone can lend a hand via Web. Supporters say loans transform lives of poor by Daniel Dale
Showing posts with label Kiva. Show all posts
Showing posts with label Kiva. Show all posts
Friday, April 20, 2007
Friday, April 06, 2007
Time Magazine article on Microcredit
General article with the usual quotes on Microcredit, what it can do and where critics say it has failed. The example with which the story starts and ends is more interesting.
When Melecio Penafiel wanted to expand his tailoring shop in Guayaquil, Ecuador, last May, he didn't go to the bank or ask his relatives for help. His seed money arrived via the Internet. Using the website Kiva.org a Bay Area software engineer named Nathan Folkert lent Penafiel the $500 he needed to buy two new sewing machines, fabrics and thread for higher-quality suits. Folkert has never met Penafiel but says making the loan "felt like I was giving him a shot at the American Dream."
...
Penafiel was able to pay back his Kiva.org loan five months later, and had a little left over to cover his six kids' school fees. It isn't quite the American Dream, but it's a start.
Monday, August 28, 2006
Person-to-Person micro-lending
I chanced upon a brilliant model implemented at Kiva through a news article in Voice of America.
While organizations are being set up to provide microlending across the world, Kiva has a unique model.
It brings individual lenders and micro-lending organizations together. Kiva's partner microcredit organizations upload profiles of people who are looking for loan in their markets. Individuals anywhere in the world can then decide whether they want to fund any of these folks. You can transfer the money via Paypal and hence is instantaneous. The lending can be as low as $25, going upto $2,000.
The microcredit intermediary takes this money and lends the same to the end users, and charge an interest. Kiva does not charge any interest and I suppose the Internet lender also may not get any interest, but will get his principal back, and will also get an update of what the business is doing.
There is, of course, the risk of not getting your money back, but Kiva says its payback rate is 100%. Kiva's partner microcredit organizations have an average payback rate of over 96%. In the worse case scenario, you would have still helped poor folks across the world possible growth opportunities. Compared to giving your money to charity, this is a far better method.
We need a model similar to this in India!
While organizations are being set up to provide microlending across the world, Kiva has a unique model.
It brings individual lenders and micro-lending organizations together. Kiva's partner microcredit organizations upload profiles of people who are looking for loan in their markets. Individuals anywhere in the world can then decide whether they want to fund any of these folks. You can transfer the money via Paypal and hence is instantaneous. The lending can be as low as $25, going upto $2,000.
The microcredit intermediary takes this money and lends the same to the end users, and charge an interest. Kiva does not charge any interest and I suppose the Internet lender also may not get any interest, but will get his principal back, and will also get an update of what the business is doing.
There is, of course, the risk of not getting your money back, but Kiva says its payback rate is 100%. Kiva's partner microcredit organizations have an average payback rate of over 96%. In the worse case scenario, you would have still helped poor folks across the world possible growth opportunities. Compared to giving your money to charity, this is a far better method.
We need a model similar to this in India!
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