Can a loan of $500 dollars change someone’s life? Microfinance says yes. Microfinance is the supply of loans and other financial services to the poor.
Muhammad Yunus is a Bangladeshi banker and economist. While visiting a poor village near his university in Bangladesh in 1976, Mr. Yunus was shocked to meet people kept in virtual servitude by usurious loans. He made a loan of $27 to 42 women out of his own pocket. This experience caused him to realize that an organization was needed that would provide banking services to the poor. Grameen bank was born.
In 2006, Muhammed Yunus and Grameen bank were jointly awarded the Nobel Peace Prize “for their efforts to create economic and social development from below.”
Something about microfinance inspired me. I like the idea of helping someone with their own idea. After all, I’ve benefited from borrowing.
I started looking for a way to get involved. In 2007 I read that Premal Shah, the President of Kiva, was speaking in Madison. Kiva is microfinance with American ingenuity. Kiva’s mission is “to connect people through lending for the sake of alleviating poverty.” “Kiva is the world’s first person-to-person micro-lending website, empowering individuals to lend directly to unique entreprenuers around the globe.”
I attended Mr. Shah’s invigorating talk. The next day I made a loan of $25 dollars to Guloglan Agakishiev, who was running a butcher shop on what looked to be card tables. Within a couple of months Guloglan had started repaying his loan of $1000 on schedule. He finished repaying his loan in the fifteen months that was promised.
Testing Kiva even further, I let my money sit in their account and watched to see if they would sweep it into their coffers. To their credit, they haven’t, and occasionally remind me that I have money in my account that could be loaned again or taken out.
Hooked, I started to give gift certificates to try to get more people involved. And so now I am offering a $25 Kiva gift ceritificate to each of the first three people who comment.