Tuesday, November 07, 2006

Make a Loan and Change a Life

A few weeks ago I was reading my local newspaper, The Tennessean, and saw an article about the most recent Nobel Prize in Economics. I learned that Muhammad Yunus, who got his Ph.D . from Vanderbilt University here in Nashville in 1971 received the Nobel Prize for his work combating poverty through the use of "microcredit" or "microloans".
Yunus’ concept of microcredit – small loans to poor villagers in Bangladesh to help them buy livestock or fund an enterprise, has grown from $27 he loaned out of his own pocket into the Grameen Bank, which has loaned more than $5.7 billion to 6.61 million borrowers. Despite lack of collateral or signed loan documents, 99 percent of the loans have been paid back. The Grameen Bank provides services in more than 71,000 villages in Bangladesh through 2,226 branches.
Just a few days ago I was channel surfing and stumbled upon a Frontline story Uganda: A Little Goes a Long Way which showed how an organization called
Kiva was using the internet to connect people like me with deserving entrepreneurs in far away places. The response to this TV show was overwhelming as their website was swamped and inaccessible for several days. The website finally came back up and I was able to make my first "microloan" Saturday night. I used my credit card to loan $25 to Ariola Sánchez, a retailer in Guayaquil, Ecuador. Kiva pooled my $25 along with loans from 9 others to fully funded her request for a $250 business loan to purchase an inventory for resale.

Kiva is not a religious organization but I could tell that many of the entrepreneurs who benefit from the loans are Christian. One of the items Ariola sells, for examples, is Bibles. I encourage my readers to visit the Kiva website with their credit card handy.

1 comment:

Tim (volunteer with Kiva.org) said...

Hi Phil,

Thanks for your post on Kiva. You have demonstrated to your readers that one does NOT have to be a Nobel Peace Prize winner to take part in healing the world through microfinance. We are humbled by the response to the Frontline documentary; it is a fine example of human compassion. We are so excited about the new social networking functionality on our portal. Micro-loaners can now choose to make their profiles public, allowing others to see their loan portfolio and the status of each loan. Imagine how this strengthens the "business relationship" between loaner and borrower, as the enterprise can now see where the individual loans come from. As well, further dialogue can be created amongst loaners who share the same affinities (such as geography). Thanks again for your support!

Tim (volunteer with Kiva.org)