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BANG FOR THE BITE
If 10,000 Biters lend $25 to international entrepreneurs, we'll pool enough money to help stock a beauty salon and a clothing shop, start a party rental service, train women farmers in sustainable agriculture, and build community-run eco-lodges in Madagascar and Nepal.
COCKTAIL FACT
In Canada, loans with a more than 60% annual interest rate are illegal; in the United States, most payday loan companies (think Check 'n Go) charge around 400%.
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home › tip library › Microlending
Ever spotted a friend for a couple cocktails?
The Bite
Like, all the freakin' time. For the cost of those two cocktails at a swanky bar, you can actually provide small loans to people in developing countries, giving them the chance to start their own businesses or get sustainability training. It's called microlending - and like it or not, there's a better chance you'll get the money back from these loans than from your alkie friends.The Benefits
- Helping peeps help themselves. More than one bil people live on less than $1 per day, so even tiny loans can help someone buy farm equipment or pay for a new restaurant license so that eventually they can support themselves without dependence on foreign aid.
- Getting good news. All of these organizations update you on the achievements of the borrowers (many programs let you select the individual project you wanna support).
- Lending with confidence. Some orgs get your money back to you (alternatively, you can just donate), and you can even make a small profit. The default rate is as low as 0.2%, meaning 98.8% of borrowers pay back their loans (more than you can say about Drinky McDrinksalot).
- Eco-commitments. FINCA and GlobalGiving give support to entrepreneurs (such as sustainable farming training) trying to make an eco-difference.
Personally Speaking
Toshio just opened a MicroPlace account, and although he's not planning on getting rich here, at least his tiny investment with the Cambodia Rural Economic Development Initiative is going to a good cause.Wanna Try?
- MicroPlace - eBay's lending site, where you can make a return of up to 3% off your microloan investment.
- FINCA - sets up community banks in small villages in developing countries.
- GlobalGiving - offers a money-back guarantee if you don't like the results, and heads up American projects like helping people affected by Hurricane Katrina.
- Grameen Foundation - the original microlender, it's credited with reducing rural poverty in Bangladesh by 40%.
- Kiva - lets you choose a project; loan $25 or more, and you'll receive updates on how the money's being spent - and the idea is that you'll be repaid.
Jan 24,2008
Sponsor
I have friends in London I desperately want to visit, but with the insane exchange rate I'd need to take out a bigger-than-micro loan to pay for it. On the other hand, when my Brit friends cross the pond to America, they go buckwild. $15 for a cocktail? Cheap as chips. $250 for a jacket? Not at all a rip-off.
For people in the developing world, the exchange rate is even more insane. With the cash you'd spend closing out the pubs on a Saturday night in Leicester, you can start a whole business.
(For the record, London's not even the most expensive city.)
-Toshio...off to count my pennies...
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PHOTO ALBUMS
Posted by: Emily Thornton | January 24, 2008 at 03:29 AM