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I've found that the more I travel, the more I realize how fortunate I have it. Even in our modern world, many places still lack running water and electricity. There are still places where you'll find kids without shoes playing in garbage lined streets; see dozens of people living in cramped, dark tin shacks; and encounter mothers begging for food. It's a humbling and sobering reminder that there is still a lot of poverty in our world.
But there are ways to help. One of my favorites is Kiva. If you haven't heard of it by now, Kiva is a non-profit microfinance site that connects lenders (you) with entrepreneurs in developing countries. What follows is an introduction to Kiva.
How it Works
Kiva partners with local field partners who have lists of qualified entrepreneurs. As the lender, you choose from these lists and lend to either a person or a group. The field partner disburses the money to the entrepreneur and your loan backfills the field partner. Your money is then paid back over the next several months which can then be re-loaned to other people.
While not exactly peer-to-peer because the loans are pre-disbursed (the money has already been given to the person even before you decide to lend), you still have a choice of where your money is going.
Here are a few things I like about Kiva:
Anyone can do it – By definition, microfinance involves small sums of money. This makes it accessible to pretty much anyone. Most of the loan requests are below $1,000 and are aggregated through many members, resulting in a minimum loan amount of only $25. So for the cost of a nice dinner, you could be changing someone's life.
There's a personal touch to it – Although loans are pre-disbursed, you still get a choice of who to loan to. Kiva has several filters which include gender, sector, country and group vs. individual. Each entry also has a picture and a story which describes who the person is, what they are planning on using the money for and miscellaneous other details. All of this really adds a personal connection. I've found that most of my loans have been to countries where I've visited.
Ease of use, proven track record and low risk – The user interface is very intuitive and funding is through PayPal or credit card. As the largest and most well known microfinance site around, Kiva has a proven track record. Field partners all have ratings for delinquency, default and foreign exchange loss rates; with the majority having little or no losses. You can pretty much expect to get all you've loaned out back.
It costs you nothing – With the tough economy and what not, donations can be difficult. But Kiva is a loan, not a donation. Really, the only thing you'll be losing is some interest. If you do decide to take your money out, there's an option to cash out via PayPal.
You're helping the builders of the world – This is the best thing I like about Kiva. Unlike giving money to a beggar on the street, your money is going towards building businesses and promoting economic growth in countries that need it the most. I think the proverb, “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.” sums it up the best.
There you have it. You've got nothing to lose and you'll be helping someone across the world. So go sign up, make a difference and give the gift that keeps on giving.
Editor's Note: Once you register for Kiva, be sure to join the Go Backpacking lending team. Together, our members have made loans totaling $825 this year.
About the Author: UC Berkeley alumni and based in San Francisco, Paul Duan is a cube monkey by day, and aspiring travel writer by night. Life in a Sack was started back in April 2010 as a personal creative outlet and has since grown to become a written record of past backpacking trips and a source for useful backpacking information. Twitter: https://twitter.com/LifeinaSack
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