View Full Version : Extending personal micro-loans; any experience?

26th Aug 2008, 14:40
Turns out our daughter and I, independently of eachother, have both been looking into this (http://www.kiva.org/) phenomenon. Both thinking that it may be an effective way of making a positive difference and something we would like to get involved in.
Googles coughs up both positive (http://www.readwriteweb.com/archives/kiva_11_million_in_loans_to_developing_nations.php¨) and negative (http://www.sepiamutiny.com/sepia/archives/005127.html) aspects.

Does anybody here have any light to shed on this, any personal experiences they could share or any informed opinion either way?
Thank you. :)

26th Aug 2008, 15:37
I have financed friends who needed money. One was bankrupt due to divorce, but was a hard worker and honest person.

I would have a hard time lending to someone I didn't know without a credit report.

Are you talking about local financing or doing good in the 3rd world, Juud?

26th Aug 2008, 16:22

As you know, I live in a 3rd World (developing nation, if you prefer) country.

In the right hands, micro-finance can and does work. Check out Grameen Bank to see what can be achieved.

We have using the system:

1. Helped a man buy a tricycle and stock to sell squid balls. He now supports his family on this and has repaid the loan.

2. Sponsored older children thru college so that they could support parents (no social security system). Loan repaid in full.

3. A small loan to buy equipment so that a legless man could make galvanised buckets. Repaid in full.

4. Purchase of a buffalo for ploughing. Managed by the village women and rented out to the men. Loan repaid early.

4. Current project is less about micro finance but may be helpful, We own land on the island of Basilan. Big problems there in terms of, basically, an insurrection. MILF, USMC, etc etc. You will get the picture. We have 5 families (about 35 people at last count) dependent on this land producing. Currently average income is around $1.50/day per person. With the right investment we hope to get that up to $3.00 per day in 3 years.

We have had a few failures - mostly in the early years - as well.

I don't know what way you are thinking of going. I have the great advantage of being able to meet and get to know the people. A great success that did not involve a loan was coaching a group of mums in setting up and managing their own micro-finance sytem. Based it on a Christmas club!

Next project: Setting up a couple of villages in the mountains with the right equipment to do abaca weave panels. Dying art but good market. Intend to finance myself and export to N America and Europe.

One tip: better to deal with the ladies. The menfolk will often spend it all on beer or worse.

Good luck

26th Aug 2008, 21:36
larss, very interesting, thanks for sharing that.

As you know ;) I do not live in the developing world, so do not have the advantage of getting to know the people concerned beforehand.
Which is why we are looking at the organisation I linked to in the first post; www.kiva.org (http://www.kiva.org/).

It is not the pay-back I am worried about Westie, the sums involved is something we can afford to lose. Not trying to sound rich-bitch, just saying that I have been fortunate enough to be able to afford this.

What I was wondering about was if anybody here had ever done this and what they thought of it.

Guess not huh? :)

Thanks for taking the time to post guys. :ok:

26th Aug 2008, 22:16
My girlfreind works in micro-finance and has many, many heart warming stories to tell about it. She would agree about dealing with the ladies on this one. PM if you wish


27th Aug 2008, 08:15
Niece of mine in Glasgow did this for a while. She was working in a financial planning office, and they got involved in India and Africa in microloans. She considered it money well spent. I don't know what, if any, agancies they used.

Howard Hughes
27th Aug 2008, 09:39
I have never heard of this before, but the website you posted Juud has me interested. I have often thought about making a regular donation but am always concerned about where the money goes.

My only concern is that by putting someone in the position of obtaining a high interest loan, are we actually worsening their financial position? Also what happens to the interest? Does the company make a large profit, or is it done on a 'not for profit' basis, although from personal experience even those types of organisations can be quite wasteful.

I don't have a lot to give, but looking at those amounts I am sure that I could provide some help.

27th Aug 2008, 14:47
Hi there HH

My girlfriend explained that whilst a lot of donors are wealthy anyone can give money to this worthwhile venture. Any interest charged is to cover legitimate costs and not to make a profit. That is the fundamental difference. Moreover, the repayment histories are great; very very few defaults.

If we wish to make a difference to the Third World this is the way to go.

If a hungry man asks you for food do you give him a fish or buy him a fishing rod and teach him how to fish? This restores the diginity to the hungry man. Better still, loan him the money to buy the rod and also give him a sense of purpose and responsiblity.


Brakes on
27th Aug 2008, 23:05
Back to the top, where it belongs.
Juud, your link to positive aspects does not work for me.
Does one get to choose who the money goes to or is there a fixed list?
I would like to participate in something like this, although it wouldn't be much because I'm retired, although I guess even a little helps.