Not long ago Kiva announced some changes to the way that money is paid back to lenders. Previously you had to wait until an entire loan was paid back before you could access your $25 cash. Now, as someone paid off a portion of their loan, your share would be credited to your account straight away.
This meant that credit became freed up – people poured their money back into the system, topping up their credit to make up $25, or in the case of mm who has MANY loans in action due to a little poetry challenge he laid down earlier this year, he could plough a significant amount of cash back in. Expect when he went to do it a few weeks back there were hardly any people that needing funding. The system was so liquid, everyone had gotten their cash! You had to get in fast to make a loan – it was like a crazy on-line auction!
The parallels between our current situation and our liquidity crisis, and the liquidity bounty that Kiva is enjoying right now is interesting. The reason our financial systems get into so much trouble occasionally is that our monetary systems get so huge and inter-connected and tangled – no one really understands the scale of it or how much entanglement there is between different systems – when one part of it collapses the domino effect through the system means the results are terrible. Community banking began to get quite popular in the late 80s, and I wonder if it will re-emerge again as people want to become a) insulated from a system that you cannot conceptualise the scale of, and b) get a bit more control again over your financial situation.
It’s Blog Action Day today –
The aim of the day is for LOTS of blogs to talk about poverty. I’m going to talk about 2 organisations, Kiva and the work of Alison Thompson.
KIVA – I’ve talked about these people before, but the stuff they do is fantastic. Kiva is a hub for micro-lending. People who need a small loan approach Kiva via a project or aid group. The loans are for things like extra stock for their shops, farming equipment etc. I have made a loan to Rachid in Beruit who needed money to re-decorate and get new equipment for his internet cafe. I gave a gift certificate for Kiva to my grandfather for his birthday, and he chose to make a loan to Dushan for some farming equipment. My first loan was to Clarial for a loan to buy more stock for her shoe store. These are typically small loans, but the people on Kiva may not have access to lending in their country. The loans give them resources that help them and their community directly – no middle man, no taking away of any control on how they feel the money should be spent. Kiva has some great stats on their site about low payment defaults, the amount of money being leant to women etc. And the great thing about Kiva is that you can either take the money back that you have leant, or put it back into another loan. I just put my credit towards a loan to Justine and her barber shop in Togo.
It is such a small amount, and it can be recycled towards other loans when the money is repaid. And your money is going directly to someone who can really do with the cash to help them, their family and their community.
PERALIYA – I’ve only come across this in the last day via an amazing article from Dumbo Feather about Alison Thompson. She is the director of The Third Wave, a film about volunteering in Peraliya after the Boxing Day Tsunami. Alsion’s story is incredibe (I encourage everyone to go out and buy a copy of Dumbo Feather to find out about her). She heard about the Tsunami and after volunteering after September 11th, decided to pack up and head to Sri Lanka to help. She has an amazing message about volunteering – basically anything you can do to help is needed, as proven by the fact that she really had no “aid organisation” experience and her and some others rocked up to this village and just pitched in. No other aid organisation had reached that village so it was them. What they thought would be a 2 week effort turned out to be an indefinate effort. They just stayed and kept working. Alison says work still needs to be done in the village. There are details on how to help the village, but it also includes lots of inspiration on how to get involved and volunteer, and make a difference.
Alison and some children from Peraliya Village in Sri Lanka
Just checked Clarial’s page on Kiva and it appears she has her requested cash! So this means she gets her loan and can go out and buy her stock.
We are trying to think of ways to raise some cash at work to support more entrepreneurs like Clarial.
I have just become a small business lender. I have made a loan of $25 through Kiva to Clarial Peralta Campo who is a small business woman in Nicaragua. She needs cash to buy more stock for her shoe stall in a market in the city of Chinandega.
Now, I love shoes, so it seemed a good fit. And making a loan of $25 is something I can afford to do, even though cash is a little bit tight right now. Clarial has requested a total loan of $525 and she’s got $225 so far. Now, I’m not sure if anyone reads this apart from one person, but if you do read, go to her page on the Kiva site and maybe chuck in $25. It’s such a good idea and allows people who wouldn’t get access through mainstream lending a chance to get a leg up.
Look at that – two “feel good” posts in one day.