As an avid supporter of Kiva, I was very happy to watch the BBC World News‘ program titled ‘Alvin’s Guide To Good Business’: Alvin Hall, a business and financial expert, is travelling the world helping social entrepreneurs become more successful. Can the poor borrow their way out of poverty? Alvin aims to find out by lending just $25 to two small business women in Tanzania, via Kiva, a global micro-finance website. Can Alvin help Kiva achieve its ambitious goal of reducing global poverty by linking lenders directly to small entrepreneurs, using the power of the internet?
When you help others,
– – From the Broadway musical ‘Avenue Q’
In the past year I have loaned $25 to a woman from Pakistan so that she can expand her dry cleaning business, $25 to a woman from Peru to start a clothing business, and $25 to a woman from Tajikistan who wanted to increase the range of goods she sells in the local market. You see, I used to donate money to worthy causes, but after reading too many reports about managers using donations for their own lavish existence, I have grown quite cynical and gradually stopped donating money. Micro-financing is different, as you do not donate your money but lend it for a period of time to an entrepreneur in a developing country, and you get your money back after a couple of months. This helps a great deal as those entrepreneurs do not need to use loan sharks. Kiva.org is the world’s first person to person microlending website. The $25 from me joined others’ and the total amount of money loaned and repaid to this date is 31 million dollars with a default rate of 1.8%. Yes, that’s right, 98% of the money was paid back, allowing the microlenders to take it back, or lend it to someone else.
NBC Correspondent John Larson traveled to Africa to visit the Kiva Entrepreneurs he has loaned to:
The IFCJ or The International Fellowship of Christians and Jews is a philanthropic organization founded by Rabbi Yechiel Eckstein. The organization might have done a lot of good in Israel, but I have always thought there was something a little off about it.
[singlepic id=254 w=320 h=240 float=right]First, it seems that one of the main goals of the organization is to promote an heroic public image of its founder. He is not only mentioned in every ad they do – he is the main focus of most of them. On his website you can ‘help honor Rabbi Eckstein [and] share a personal message with [him] that will be placed in a special book of memories being presented to him […]’
In this air of a personality cult they might as well have used a capital H when spelling ‘him’.
Second, it seems that when it comes to soliciting donations, the end justify the means with this organization. A year ago Israel’s Channel 10 news did a segment showing the organization’s US commercials in which Rabbi Eckstein paints Israel as a Third World country whose streets are packed with poor people, bombs go off everywhere, and tourists never visit. Now, I understand that you cannot ask for money if you state that all is well, but it seems the IFCJ is incapable of seeing the big picture, and in trying to make Israel better they seem to perpetuate old stereotypes, trying to manipulate people’s emotions in order to raise more funds.
[singlepic id=96 w=425 h=400 float=right]In yesterday’s Maariv newspaper, the organization published an ad in which Rabbi Eckstein personally feeds a child some green beans, in what appears to be a very large soup kitchen. I found this ad particularly disturbing, as the child in front and the others in the back are most likely real people and not models, who most likely did not consent to being plastered all over the newspaper. But what really made me mad is the subtext of Rabbi Eckstein as a contemporary messiah feeding the poor. No more donating in secret – the modern day savior has an NPO, hires a PR company, an ad agency, and does not wait for people to hang his picture on the wall – he prints them copies of it.
Update: This post discusses TipJoy, which has now shut down its service. More info here.
Most bloggers and small content-providers do not expect to earn money that way. They do it for the fun of it, writing about things close to their heart. But everyone needs to feel the love, and so bloggers take comfort in the rising number of visitors, the search terms that led visitors to the website, and by the comments left.
When that initial love fades, many bloggers post a PayPal donation button or an Amazon Honor System paybox, to allow readers to leave small cash tips as a way of saying thank you for the content provided. The thing is, as most people read multiple blogs daily, it usually takes an extraordinary event to make a reader step out of his comfort zone, login to his PayPal account and actually send a buck.
This is where TipJoy, an exciting new startup comes to the rescue: readers are not required to create an account to leave a tip, so the initial friction is removed. They just click the button and type in their email address, thus starting to build up an account debit – one single account for tips left in multiple websites. Eventually readers can pay that debit off via PayPal, although no one comes after you if you choose to skip out on the bill. Readers can also start to ask for tips on their own site, and anything people leave for them offsets what they have given to others.
That is the magical simplicity of TipJoy: Did you read something that made you laugh? Tip the blogger 10 cents. Someone posted a scoop you enjoyed reading? Click to tip them. At the end of the month, go to your TipJoy account, and pay your entire 3 dollar bill in a single PayPal transaction.
frgdr.com added TipJoy’s ‘tip this’ buttons to its posts. We’ll see how it goes.
This is Shazia Nawaz, photographed here with one of her four children. She and her husband live in the town of Vehari in Punjab province, Pakistan. Yesterday she applied for a micro-loan of US$250 to buy a new dry cleaning machine for her dry cleaning business. Yesterday just so happened to be the day that I decided to log on to Kiva.org, a non-profit organization that transformed microfinancing into an interpersonal experience. Nobel Peace Prize Laureate Muhammad Yunus’ idea of microcredit means giving the working poor small cash loans without interest, without collateral and without red tape, as Shazia and many other entrepreneurs in the developing world do not need a handout. They already run small businesses successfully and support their families, but in order to further grow their business they need a loan. Me and nine other people who read Shazia’s story online donated US$25 each and allowed the local Kiva field partner to give her the needed money. While the loans are given without any collateral or credit history checks, the percent of people who do not pay back a loan is 0.2%. The money I loaned will gradually return to my account, and I would then decide whether I want to withdraw it or loan it to someone else.
With the season’s holidays drawing near I wanted to urge you to get into the spirit of giving, and less into the spirit of buying. You can personally make a difference in someone’s life, and you could also give someone you love a Kiva Gift Certificate that will allow him to start giving. Check out this video showing how easy it is to lend with Kiva.
You can follow Shahar Golan’s loan portfolio here.