Friday, December 4, 2009

Friday Feature: Kiva

When I was an undergraduate in college, I wrote a paper based in part on a report published by The World Bank entitled “Engendering Development: Through Gender Equality in Rights, Resources, and Voice” that addresses the links between gender, public policy, and development outcomes.  The primary focus of my paper was the impact of gender discrimination on economic development. I will save you the details, but micro-finance was identified as one way of  beginning to combat poverty and increasing GDP in developing countries. It's not THE answer, but it is a piece of the puzzle.

Fast forward to a couple of years ago when my supervisor shared a program with me called Kiva. Kiva is a micro-lending program where you can lend money, small and large amounts, to those in need-- usually in developing countries-- so they can start or expand a business. During the period of the loan (6-12 months), you get updates on how the project is going, and when your money is paid back, you can lend it out to someone new. (Read more about how Kiva lending works.)

There are some drawbacks-- primarily that the fees to the person borrowing the money seem high. However, it costs a certain amount no matter how large or small the loan, so in some ways it makes sense. Also, some of the lending agencies have high default rates, but others have really low, so by doing a little homework (on the site), you can make wise lending choices.

More resources on Micro-lending.


Rebecca said...

Sounds like a good program.

ANHD said...

I just saw something on TV the other day about a very similar program (don't remember the name so it could have been the same one). I thought it sounded pretty interesting. It seems like one of the more thoughtful and unique ways of addressing worldwide poverty.

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