The Internet is really reshaping lending as we know it. I just learned of a fantastic site that allows investors to lend to entrepreneurs from poor countries, where $325 can mean the fulfillment of a life long dream to start a business and hopefully alleviate one’s family from poverty. The site is called Kiva http://www.kiva.org
Kiva works with microfinance organizations in third world countries such as Honduras, Tanzania, Azerbaijan, Samoa, Tajikistan and others. You as an investor can look at the profiles of these entrepreneurs needing financial support — such as Lucia of Tanzania who needs $1,000 to purchase a deep freezer for her fish selling business to Adil of Ajerbaijan who needs $750 to buy a milk cow for her animal breeding business. The stories are varied, the businesses are different , but all are looking for mini-Bill Gates who can give them as low as $25 in loan.
As an investor, you can choose to give as little as the minimum loan investment of $25 or the total amount requested. You can lend them the money through your credit card or Paypal. But you will not be lending the money directly to the investor, but through the microfinance organization that are working with these entrepreneurs in their countries. Have no fear: the money will still be given to the entrepreneur 100%; it’s just that the conduit of funds have to pass through the microfinance organization.
You will be paid back in about 6-18 months. As the investor, you will not be paid any interest to your money, but Kiva and the microfinance organization typically charges the entrepreneur some interest rates (no wonder there are reports that many microfinance organizations are becoming very profitable).
If you are looking for an opportunity to do your part in making the world a better place, consider extending your philantrophy to the entrepreneurs of poor countries. And if you are living in one of these poor areas, check if there are microfinance organizations that can help get your story in Kiva.org so you may be able to tap lenders from around the world.
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