Microfinance and it’s benefits

As a student with hardly, if any, spare change lying about, when people representing charities on the high street ask me to make regular donations to help others in poor countries, I cannot help feel guilty when I tell them I can’t. This is a problem for me because I feel everyone should have access to education, health care and a warm home, and since I cannot afford to go out to developing countries and give local people money they need, charities seem the only way for students like me to help others. Or is it?

Well, as bought to light by John and Hank Green, the organisation Kiva might be a way to directly help people help them selves. Kiva is a micro-finance company. It sets up Field Partners in developing countries and invite local companies or people who need loans to come forward. They then place a photo of the person who needs a loan and why they need  it on the Kiva website. Once on the site, anyone can donate just $25. And the best bit? 98% the people taking the loan pay you back! So, not only have you helped someone improve their business or home, you have been able to do it, for free!

Kiva helps people create opportunities for themselves and others. Before you give money, you are told the time the recipient will pay you back in. This is based on the income of the borrower and at a comfortable pace they can pay you in. sometimes it can take a few months, and others, it can take a couple of years, but, remember, 98% of the time, you are paid back. The great thing is, when we lend this money, not only are we helping the person directly, but we may be helping the community in more ways than we can imagine. For example, with a new flock of Sheep, a farmer may be able to employ someone in their community to help them, creating jobs.

The first question that may come in to mind is why can’t these people go to their local banks? And the answer to that is there may not be a bank to go to or the borrowers cannot afford the high interest rates and possibly loosing everything they own if they do not pay the loan back. The other options are loan sharks in which the price of not paying back money on time can be very severe. Through Kiva and their field partners, people can gain finance for their business at a rate they can afford and safely.

Today I made my first donation to Franco Chiro. He wants to buy chicks and chicken feed to expand his business since most of his income at the moment goes towards paying for his children to go to school. His wife provides basic food and shelter for their family. The money will help him expand his business and employ more people in the community and help ensure his children get an education to the highest level they can. To find Franco, go here.

I will keep you updated as to his repayments and his progress and other donations I may make.

If you can, please help people trying to help themselves, the $25 goes a long way and you get it back!  Go to Kiva and donate here!

I will be doing a vlog on YouTube soon with more information on Kiva so watch this space!

Over and Out!

Nathalie Lotmani

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