Friday, November 27, 2009

Microfinance

One of the innovative ways in which the internet is being put to use to help poor people around the globe is what might be called internet microfinance.

The way it works in a nutshell is this: You go to the website of an organization doing microfinance (providing small loans to the working poor) and view pictures and summaries of entrepreneurs from third world countries who need loans (usually a couple hundred dollars or less) to get a business going or to get over a rough spot, etc.

One such organization that works to provide loans to such people is a group called Kiva. Kiva has field partners in countries around the globe who dispense loans to small businessmen and women. You and others make a contribution to the loan (usually $25.00 or more) which, in aggregate, gives the field partner the capital he needs to secure the loan. When the loan is repaid you get your money back and can use it to fund other loans.

If you're looking for a good way to help people but feel that handouts are often counterproductive this is an excellent way to give people who are working hard a hand up. Check out the Kiva site to get a better idea of what they do.

RLC