Comments on: Kiva.org – Lending to Third World Entrepreneurs http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm Building Wealth through Saving and Investing Sun, 12 Feb 2012 23:42:26 -0330 http://wordpress.org/?v=abc hourly 1 By: used tires http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm/comment-page-1#comment-112864 used tires Wed, 05 May 2010 06:58:51 +0000 http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm#comment-112864 I know it sounds great, but how do you truly know if the money is actually going to entrepreneurs in the third world? I’m not saying that Kiva is not legitimate, but that it would not be hard to create a scam version of this, where someone is making up all the stories. Or maybe not Kiva itself, but the “field partners” could be making up the stories. Till then, Jean I know it sounds great, but how do you truly know if the money is actually going to entrepreneurs in the third world? I’m not saying that Kiva is not legitimate, but that it would not be hard to create a scam version of this, where someone is making up all the stories. Or maybe not Kiva itself, but the “field partners” could be making up the stories.

Till then,

Jean

]]> By: Interest Rates » Comment on Kiva.org - Lending to Third World Entrepreneurs by … http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm/comment-page-1#comment-55788 Interest Rates » Comment on Kiva.org - Lending to Third World Entrepreneurs by … Tue, 07 Oct 2008 22:20:49 +0000 http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm#comment-55788 [...] Read the rest of this great post here [...]

[...] Read the rest of this great post here [...]

]]> By: Fiona Khan http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm/comment-page-1#comment-55770 Fiona Khan Tue, 07 Oct 2008 19:05:39 +0000 http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm#comment-55770 I think some of us are missing the point here. Kiva is not targeted towards people who are looking to make money (prosper.com) rather than reap the savings account interest rate, or looking for tax deductions..what would a tax deduction on $25 worth of donation be anyway? a negligible amount.. If someone can raise a family simply by purchasing a camera, (as one of the entrepreneurs on the site did) and lending it out in her community, and we can help her do this, should we really be considering the tax implications of $25 for doing so? To the argument that VP GATES makes about the abundance of governmental organizations whose responsibility this is, I would just like to remind everyone that the developing world is "developing" in part because of a lack of effective institutions, limited law enforcement and corruption. In such countries, the NGO (non governmental organizations/aka. not for profit organizations) sector is looked upon to fill the gap. And frequently, it is because of their work that the gap narrows, and/or at the very least life becomes more bearable for some very poor people. (over 1 billion people live on less than $2/ day) That is no to say that NGO's don't have transparency problems. But there are transparency problems everywhere, as we have learned from the collapse of reputable banks in recent times. Does that mean we will stop using banks altogether? Yes, the MIF's charge interest rates that seem exorbitant to us in the developed world. Thats because our access to capital and interest rates charged are governed by measurable factors ie credit history, level of collateral, income level. In developing countries, no such processes exist for poor people. So when the MIF's get access to capital from traditional banks, the "high risk" nature of their business equals the MIF getting very high interest levels themselves. Which they have to repay. And ALL of these interest rates are lower than what the final consumer/entrepreneur would otherwise get, if he could ever manage to at all. The point, also, is that once these people have an established history, their credit riskiness will be re- examined, and interest rates for them should decrease accordingly. This is about alleviation of sytemic poverty- sustainably. Its about empowering people by allowing them to earn their own livelihood, and not depend on unsustainable charity. Its very nice to buy a local panhandler a meal, but wouldn't it be nicer to give him the means to earn his own meals over the long term, if he is so inclined? The site is geared towards people with just that perspective. And I am so glad that we have a good proportion of people who are all for it! Kudos to them for the idea! Fantastic work! I think some of us are missing the point here. Kiva is not targeted towards people who are looking to make money (prosper.com) rather than reap the savings account interest rate, or looking for tax deductions..what would a tax deduction on $25 worth of donation be anyway? a negligible amount..

If someone can raise a family simply by purchasing a camera, (as one of the entrepreneurs on the site did) and lending it out in her community, and we can help her do this, should we really be considering the tax implications of $25 for doing so?

To the argument that VP GATES makes about the abundance of governmental organizations whose responsibility this is, I would just like to remind everyone that the developing world is “developing” in part because of a lack of effective institutions, limited law enforcement and corruption. In such countries, the NGO (non governmental organizations/aka. not for profit organizations) sector is looked upon to fill the gap. And frequently, it is because of their work that the gap narrows, and/or at the very least life becomes more bearable for some very poor people. (over 1 billion people live on less than $2/ day)

That is no to say that NGO’s don’t have transparency problems. But there are transparency problems everywhere, as we have learned from the collapse of reputable banks in recent times. Does that mean we will stop using banks altogether?

Yes, the MIF’s charge interest rates that seem exorbitant to us in the developed world. Thats because our access to capital and interest rates charged are governed by measurable factors ie credit history, level of collateral, income level. In developing countries, no such processes exist for poor people. So when the MIF’s get access to capital from traditional banks, the “high risk” nature of their business equals the MIF getting very high interest levels themselves. Which they have to repay. And ALL of these interest rates are lower than what the final consumer/entrepreneur would otherwise get, if he could ever manage to at all. The point, also, is that once these people have an established history, their credit riskiness will be re- examined, and interest rates for them should decrease accordingly.

This is about alleviation of sytemic poverty- sustainably. Its about empowering people by allowing them to earn their own livelihood, and not depend on unsustainable charity.

Its very nice to buy a local panhandler a meal, but wouldn’t it be nicer to give him the means to earn his own meals over the long term, if he is so inclined? The site is geared towards people with just that perspective. And I am so glad that we have a good proportion of people who are all for it!

Kudos to them for the idea! Fantastic work!

]]> By: Kiva - Microloans for Entrepreneurs | Cash Money Life http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm/comment-page-1#comment-55399 Kiva - Microloans for Entrepreneurs | Cash Money Life Sun, 05 Oct 2008 19:41:51 +0000 http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm#comment-55399 [...] Kiva.org - Lending to Third World Entrepreneurs. [...]

[...] Kiva.org – Lending to Third World Entrepreneurs. [...]

]]> By: Finding a Charity http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm/comment-page-1#comment-47432 Finding a Charity Sat, 09 Aug 2008 00:21:37 +0000 http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm#comment-47432 [...] The site that seeker5 and you are looking for, ie: micro-loans to 3rd world is kiva.org. Here's the site: Kiva - Loans that change lives And a review of it: Kiva.org - Lending to Third World Entrepreneurs | Million Dollar Journey [...]

[...] The site that seeker5 and you are looking for, ie: micro-loans to 3rd world is kiva.org. Here’s the site: Kiva – Loans that change lives And a review of it: Kiva.org – Lending to Third World Entrepreneurs | Million Dollar Journey [...]

]]> By: Steve http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm/comment-page-1#comment-47404 Steve Fri, 08 Aug 2008 18:07:03 +0000 http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm#comment-47404 The high interest rate alone makes it not worthwhile for me to donate. It's no different from giving money away and letting it trickle down to the actual needy. It should be a flat rate like a service charge. The high interest rate alone makes it not worthwhile for me to donate. It’s no different from giving money away and letting it trickle down to the actual needy. It should be a flat rate like a service charge.

]]> By: Kiva.org - Lending to Third World Entrepreneurs — Register or Signup to Free Internet Services http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm/comment-page-1#comment-25229 Kiva.org - Lending to Third World Entrepreneurs — Register or Signup to Free Internet Services Mon, 11 Feb 2008 17:55:30 +0000 http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm#comment-25229 [...] which give micro loans to the entrepreneurs with interest (some are ridiculously high, source: Kiva.org - Lending to Third World Entrepreneurs, Million Dollar [...]

[...] which give micro loans to the entrepreneurs with interest (some are ridiculously high, source: Kiva.org – Lending to Third World Entrepreneurs, Million Dollar [...]

]]> By: Best of Million Dollar Journey: Nov 2007 | Million Dollar Journey http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm/comment-page-1#comment-19916 Best of Million Dollar Journey: Nov 2007 | Million Dollar Journey Fri, 14 Dec 2007 07:34:14 +0000 http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm#comment-19916 [...] Kiva.org - Lending to Third World Entrepreneurs (20 [...]

[...] Kiva.org – Lending to Third World Entrepreneurs (20 [...]

]]> By: SfumatoPants http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm/comment-page-1#comment-18908 SfumatoPants Tue, 04 Dec 2007 20:32:28 +0000 http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm#comment-18908 From the Grameen Foundation website: I’ve heard that MFIs charge a high rate of interest for the loans. Is that so? Like other financial institutions, microfinance institutions (MFIs) charge interest for the loans they make to their clients. The interest covers the high cost of making very small loans and personally servicing each client every week. It also covers the cost of managing the “center meetings”; the peer support group process; and providing information on social services, personal development, health and other critical information that helps clients improve their lives and the future of their families. Their rates are also largely influenced by the rates MFIs themselves pay for borrowing the funds that they in turn lend to their clients. MFI interest rates can range from 18 to 60 percent, depending on the conditions in each MFI’s service area. Without microfinance programs, the most common alternative for very poor people is the local “money lenders,” who regularly charge between 120 and 300 percent. ... so, having spent a lot of time in "the third world" myself, I can attest to this. We have to remember that our standards are not universal, and that one of the major reasons people live in poverty is because local systems have completely broken down. We have to look a little deeper, and not take it for granted that everyone everywhere operates according to our privileged standards. From the Grameen Foundation website:

I’ve heard that MFIs charge a high rate of interest for the loans. Is that so?

Like other financial institutions, microfinance institutions (MFIs) charge interest for the loans they make to their clients. The interest covers the high cost of making very small loans and personally servicing each client every week. It also covers the cost of managing the “center meetings”; the peer support group process; and providing information on social services, personal development, health and other critical information that helps clients improve their lives and the future of their families. Their rates are also largely influenced by the rates MFIs themselves pay for borrowing the funds that they in turn lend to their clients. MFI interest rates can range from 18 to 60 percent, depending on the conditions in each MFI’s service area. Without microfinance programs, the most common alternative for very poor people is the local “money lenders,” who regularly charge between 120 and 300 percent.

… so, having spent a lot of time in “the third world” myself, I can attest to this. We have to remember that our standards are not universal, and that one of the major reasons people live in poverty is because local systems have completely broken down. We have to look a little deeper, and not take it for granted that everyone everywhere operates according to our privileged standards.

]]> By: Iain http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm/comment-page-1#comment-18251 Iain Wed, 28 Nov 2007 02:37:19 +0000 http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm#comment-18251 I am active Kiva lender and have had nothing but positive experiences with them. I would not hesitate to recommend the site and the good work that they are doing. I am active Kiva lender and have had nothing but positive experiences with them. I would not hesitate to recommend the site and the good work that they are doing.

]]> By: James http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm/comment-page-1#comment-18179 James Tue, 27 Nov 2007 16:30:00 +0000 http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm#comment-18179 With this setup it seems like the field partner is the charity as you are giving them an interest free loan for which they suffer very little if they default. With this setup it seems like the field partner is the charity as you are giving them an interest free loan for which they suffer very little if they default.

]]> By: brip blap http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm/comment-page-1#comment-18102 brip blap Tue, 27 Nov 2007 03:53:14 +0000 http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm#comment-18102 Let's back up on one thing - it's not a donation if YOU get your money back, it's a loan. Kiva is a fairly nice idea but basically you're just underwriting high-interest loans. If you want to GIVE money, give it to a charity. This is not GIVING money to an entrepreneur - it is lending. I personally think it's a fine idea if that's how people want to tie up their money at minimal benefit to themselves and the person who receives the loan. Me, I prefer to GIVE to charity, where the organization just gets the money without having to repay it at 25% interest and I get the tax deduction. www.rcws.org is a good charity to help... Let’s back up on one thing – it’s not a donation if YOU get your money back, it’s a loan. Kiva is a fairly nice idea but basically you’re just underwriting high-interest loans. If you want to GIVE money, give it to a charity. This is not GIVING money to an entrepreneur – it is lending. I personally think it’s a fine idea if that’s how people want to tie up their money at minimal benefit to themselves and the person who receives the loan. Me, I prefer to GIVE to charity, where the organization just gets the money without having to repay it at 25% interest and I get the tax deduction.

http://www.rcws.org is a good charity to help…

]]> By: ThickenMyWallet http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm/comment-page-1#comment-18063 ThickenMyWallet Mon, 26 Nov 2007 22:33:20 +0000 http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm#comment-18063 There seems to be a very wide discretion given to the field partner. From your description, there's not a lot of over-sight on the field partner's behavior other than Kiva ranking their field partners (and the ABCP issues highlight that ranking is subject to its own loopholes). Field Partners can always force their borrowers to give good rankings by threatening to with-hold money and how would Kiva ever know? Oprah has in the past supported what appears to be well meaning causes but, upon proper due diligence, not so squeaky clean as it made itself out to be. She has a good heart but its hard to do due diligence on something so far away. Since there is so much media attention to it lately, if it survives the next 3-6 months without anyone poking holes in it, I would add it as a link to charity but I would hold off. There seems to be a very wide discretion given to the field partner. From your description, there’s not a lot of over-sight on the field partner’s behavior other than Kiva ranking their field partners (and the ABCP issues highlight that ranking is subject to its own loopholes). Field Partners can always force their borrowers to give good rankings by threatening to with-hold money and how would Kiva ever know?

Oprah has in the past supported what appears to be well meaning causes but, upon proper due diligence, not so squeaky clean as it made itself out to be. She has a good heart but its hard to do due diligence on something so far away.

Since there is so much media attention to it lately, if it survives the next 3-6 months without anyone poking holes in it, I would add it as a link to charity but I would hold off.

]]> By: Telly http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm/comment-page-1#comment-18040 Telly Mon, 26 Nov 2007 17:15:11 +0000 http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm#comment-18040 Gates VP, unicef has a similar program which I've used. I think it's great. I recently "donated" mosquito nets during their big malaria campaign. I was especially motivated after a recent trip to Africa when I had to take malaria meds which can't be taken for any prolonged period of time. A buck for a net can go a long way. I also buy all my greeting cards from Unicef as well. Their catalogue is pretty nice, and if you're going to send greeting cards anyway... And btw, very nice gesture to take your 'neighbour' to dinner. Gates VP, unicef has a similar program which I’ve used. I think it’s great. I recently “donated” mosquito nets during their big malaria campaign. I was especially motivated after a recent trip to Africa when I had to take malaria meds which can’t be taken for any prolonged period of time. A buck for a net can go a long way. I also buy all my greeting cards from Unicef as well. Their catalogue is pretty nice, and if you’re going to send greeting cards anyway…

And btw, very nice gesture to take your ‘neighbour’ to dinner.

]]> By: Gates VP http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm/comment-page-1#comment-18039 Gates VP Mon, 26 Nov 2007 16:58:34 +0000 http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm#comment-18039 You may recall <a href="http://gatesvp.blogspot.com/2007/08/donating-money.html" rel="nofollow">my little rant sometime ago about donations</a>? In that I listed Kiva as <i>"my only good lead"</i>, but now I hear that the field partners also charge interest? <b>That's total BS!</b> I'm already absorbing the risk! I'm basically giving these field partners free money! You see, this is why I don't like giving money, somebody along the way is always taking slices of that money (or big fat hunks in Kiva's case). Knock them off of my "potential donors list". Don't get me wrong, I'm not some tight-ass jerkwad who won't help his fellow man. On Friday I took one of our local panhandlers out for dinner. Sadly, only McDonald's was available, but he got grilled chicken sandwiches and a salad. He's been a regular around here and the government has been helping him out and setting him up with a place, but it's not an instant process. So I don't mind hooking him up with a meal and a few bus tickets, I don't mind giving "stuff". I just don't want to give him cash, b/c we already have government programs for that, I'm already "giving him cash", he's just waiting for the approvals to go through. As to other places to lend, I just heard about this one last night: <a href="http://www2.worldvision.ca/gifts/app" rel="nofollow">WorldVision gifts</a>. Here, you can give ___ in the name of someone else. So donate $100 dollars and you buy someone a goat. $350 gets you an alpaca, $30 gets you soccer balls or mosquito nets or warm blanket or even rabbits (for 35). Heck they even have their own <a href="http://www2.worldvision.ca/gifts/app?service=external/Gift&sp=l2295" rel="nofollow">"Micro-loan setup"</a>. It looks like our gift to the grandparents is going to be a couple of goats in their name, so I can let you know how it goes. You may recall my little rant sometime ago about donations?

In that I listed Kiva as “my only good lead”, but now I hear that the field partners also charge interest? That’s total BS! I’m already absorbing the risk! I’m basically giving these field partners free money!

You see, this is why I don’t like giving money, somebody along the way is always taking slices of that money (or big fat hunks in Kiva’s case). Knock them off of my “potential donors list”.

Don’t get me wrong, I’m not some tight-ass jerkwad who won’t help his fellow man. On Friday I took one of our local panhandlers out for dinner. Sadly, only McDonald’s was available, but he got grilled chicken sandwiches and a salad. He’s been a regular around here and the government has been helping him out and setting him up with a place, but it’s not an instant process. So I don’t mind hooking him up with a meal and a few bus tickets, I don’t mind giving “stuff”. I just don’t want to give him cash, b/c we already have government programs for that, I’m already “giving him cash”, he’s just waiting for the approvals to go through.

As to other places to lend, I just heard about this one last night: WorldVision gifts. Here, you can give ___ in the name of someone else. So donate $100 dollars and you buy someone a goat. $350 gets you an alpaca, $30 gets you soccer balls or mosquito nets or warm blanket or even rabbits (for 35). Heck they even have their own “Micro-loan setup”. It looks like our gift to the grandparents is going to be a couple of goats in their name, so I can let you know how it goes.

]]> By: Cross the river http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm/comment-page-1#comment-18038 Cross the river Mon, 26 Nov 2007 16:14:14 +0000 http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm#comment-18038 A lot of these organisations are out there and micro-credit has proven its worth. One must nevertheless put the loan in context when judging the interest rates. In many of those countries, it’s impossible to get a bank loan if you are poor and the neighbourhood money lender usually charges a few hundred % if not more. So as ridiculous a 54% rate may seem to us, it's actually very good, if not the only way out in certain countries. A good description: http://en.wikipedia.org/wiki/Microcredit Anyways, I’m happy you brought this topic up. A lot of these organisations are out there and micro-credit has proven its worth.

One must nevertheless put the loan in context when judging the interest rates. In many of those countries, it’s impossible to get a bank loan if you are poor and the neighbourhood money lender usually charges a few hundred % if not more. So as ridiculous a 54% rate may seem to us, it’s actually very good, if not the only way out in certain countries.

A good description:
http://en.wikipedia.org/wiki/Microcredit

Anyways, I’m happy you brought this topic up.

]]> By: Telly http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm/comment-page-1#comment-18035 Telly Mon, 26 Nov 2007 15:19:48 +0000 http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm#comment-18035 FT, I can't recall what the rules are for charitable tax donations to US charities off hand. I think it might be that you need a certain amount of US based income to qualify but you might want to check into it. Does Kiva have a Canadian version? Mike, Oprah had a little stint with a "fradulent" author in the past so her legal team may not catch everything. ;) 4P, it was US Thanksgiving so I had the week off and mostly stayed away from the computer. Back to work and surf now. ;) FT, I can’t recall what the rules are for charitable tax donations to US charities off hand. I think it might be that you need a certain amount of US based income to qualify but you might want to check into it. Does Kiva have a Canadian version?

Mike, Oprah had a little stint with a “fradulent” author in the past so her legal team may not catch everything. ;)

4P, it was US Thanksgiving so I had the week off and mostly stayed away from the computer. Back to work and surf now. ;)

]]> By: David Cox http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm/comment-page-1#comment-18033 David Cox Mon, 26 Nov 2007 15:09:55 +0000 http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm#comment-18033 I've been an active lender on Kiva, browse their forums on a weekly basis, and have also given several presentations on microloans. I believe that Kiva and Microplace (the 'lend for profit' counterpart of kiva created by Ebay) are the two best social entrepreneurship sites that individuals can currently be associated with as far as their direct impact on developing economies. Like the site! Keep up the good work! I’ve been an active lender on Kiva, browse their forums on a weekly basis, and have also given several presentations on microloans. I believe that Kiva and Microplace (the ‘lend for profit’ counterpart of kiva created by Ebay) are the two best social entrepreneurship sites that individuals can currently be associated with as far as their direct impact on developing economies.

Like the site!

Keep up the good work!

]]> By: FrugalTrader http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm/comment-page-1#comment-18029 FrugalTrader Mon, 26 Nov 2007 14:46:59 +0000 http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm#comment-18029 Telly, do you know if the Grameen Foundation is tax deductible to Canadians? Telly, do you know if the Grameen Foundation is tax deductible to Canadians?

]]> By: Mike http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm/comment-page-1#comment-18028 Mike Mon, 26 Nov 2007 14:37:35 +0000 http://www.milliondollarjourney.com/kivaorg-lending-to-third-world-entrepreneurs.htm#comment-18028 It sounds sketchy but given Oprah's billion dollar empire I'm sure her legal team looked into it long and hard before allowing her to endorse it. It sounds sketchy but given Oprah’s billion dollar empire I’m sure her legal team looked into it long and hard before allowing her to endorse it.

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