They seem to come in waves – those inconvenient phone calls that often plague dinner time. At least three times a year, there are clusters of calls requesting donations to charities. Typically, the causes are worthwhile – from research into childhood diseases and camps for underprivileged kids to supporting impoverished communities.
If you would rather choose a specific cause and bypass intermediary organizations, there are some options. For example, Kiva offers a structure for supporting entrepreneurs in many countries. It is a person-to-person micro-lending system. By lending small sums of money, you can help individual people establish a viable business.
The first step is to browse individual entrepreneurs featured on the website. Once a recipient is chosen, a donation can be sent by Paypal or credit card. At this point, you have become a lender. Kiva coordinates the money transfer, passing loans to local microfinance organizations. These partners then deliver funds to the individual recipient.
Along with a loan, some microfinance groups also offer training and other advice to entrepreneurs. The idea is to get each small business working and viable. Once the entrepreneur is in operation, the loan is repaid over time. Kiva also coordinates information about repayment and any other updates. The money is transferred back to each lender. Once the money has been returned, lenders can decide to make another loan, donate to Kiva, or reclaim the money.
Kiva only features people with genuine needs. Like some child sponsorship programs, you see the actual person who will receive the funding. Each selected entrepreneur is trying to work out of poverty and into some financial independence. Their families and communities also benefit. The organization tries to be as fiscally transparent as possible, so that lenders can see where money goes and what it can mean to entrepreneurs. The aim is to have low administrative costs – and the internet facilitates this process.
Along with individual lenders, a number of corporate sponsors have also joined the effort. Some provide in-kind services such as advertising, web support, and financial services. Others, like Intel, offer matching funds or other donations – check out the Small Things Challenge where a simple click on a button will add 25¢ to support Kiva and Save the Children.
If this sounds like your sort of program, check out the site. Browse through a huge variety of individuals, from market vendors in Tajikistan to farmers in Uganda. You can also join other communities of lenders through Kiva. There’s an additional opportunity to become a volunteer Fellow and visit recipients to see the impact in person.
Microfinancing has been proposed as the most effective way to support people in poor areas. A small amount of money can go a long way. The recycling of funds through loans and repayments allows one sum of money to support multiple entrepreneurs and their communities.
Photo credit: ruslou@Flickr.com
