P2P Social Lending
The first time I heard of the concept of micro-lending was last year when Muhammad Yunus, a Bangladeshi economist, won the Nobel Peace prize for pioneering micro-credit. Yunus and his Grameen Bank granted small loans to those who had no collateral and who did not qualify for conventional bank loans. The program enabled millions to start and run their own businesses, and promoted independence, rather than dependence, among the poorest in Bangladesh. Micro-lending isn't charity. It's a way of encouraging entrepreneurship and business activity.
I've become aware of many similar micro-credit projects that have helped millions around the world lift themselves out of poverty. One that has leveraged the power of the Internet to connect the haves with the have-nots is Kiva.org, a San Francisco-based nonprofit that has helped put more than $6 million into the hands of small business owners in the last year and a half.
Their site supports person-to-person financing and lets lenders connect directly with those who need money to start their business. On the Kiva.org website you can browse business profiles and photographs, select a borrower who interests you, and then make a loan for $25 or more though PayPal, which waives all Kiva.org transaction fees.
Funded entrepreneurs keep an online journal online where lenders can read about the progress of their business and see their history of repayment. Members of the Kiva lending community can comment on journals or recommend businesses to others. Groups of socially minded investors are now forming
Kiva provides interpersonal connection at a very low cost thanks to the instant, inexpensive nature of the Web. Kiva runs a lean operation, has fewer than ten employees, and is supported largely by volunteers. One-hundred percent of loans made through the Kiva site go directly to the lender. In the history of the organization, there is only one report of defaulting on a loan.
I've become aware of many similar micro-credit projects that have helped millions around the world lift themselves out of poverty. One that has leveraged the power of the Internet to connect the haves with the have-nots is Kiva.org, a San Francisco-based nonprofit that has helped put more than $6 million into the hands of small business owners in the last year and a half.
Their site supports person-to-person financing and lets lenders connect directly with those who need money to start their business. On the Kiva.org website you can browse business profiles and photographs, select a borrower who interests you, and then make a loan for $25 or more though PayPal, which waives all Kiva.org transaction fees.
Funded entrepreneurs keep an online journal online where lenders can read about the progress of their business and see their history of repayment. Members of the Kiva lending community can comment on journals or recommend businesses to others. Groups of socially minded investors are now forming
Kiva provides interpersonal connection at a very low cost thanks to the instant, inexpensive nature of the Web. Kiva runs a lean operation, has fewer than ten employees, and is supported largely by volunteers. One-hundred percent of loans made through the Kiva site go directly to the lender. In the history of the organization, there is only one report of defaulting on a loan.
