Using Kiva to manufacture spend

Old Nov 17, 2012, 4:02 pm
  #46  
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Originally Posted by neuron
wow, are you serious? I can't tell without an emoticon.

I would welcome you to Flyertalk but, wow, what a first post!
Amen. I hope that was an attempt at sarcasm (albeit a weak one) rather than a serious comment.
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Old Nov 17, 2012, 4:39 pm
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Some of the comments in this thread remind me that there are some very paranoid and very cynical people in the world.

I, for one, will continue reaching out my hand to help people despite the minuscule chance that it may get chopped off.
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Old Nov 17, 2012, 4:42 pm
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As someone who has actually visited multiple micro-lending institutions in rural areas of developing countries, I trust small amounts of loans ($25, $50, $75) with them through Kiva.
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Old Nov 17, 2012, 4:57 pm
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I would not go overboard with Kiva. I only use it to meet minimum spending
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Old Nov 17, 2012, 5:20 pm
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I consider giving small amounts ($25-50) to a number of different people in developing countries to be nearly the least I can do to help those not as lucky as I am. I am a bit disheartened by some of the cynicism of this thread.

I aim to keep a fixed amount in Kiva, cycling funds to bump my spend a little. That amount only increases if I think I can absorb a total loss of the funds, even if that's basically never going to happen. Spread your risk by country, lender and type of project and it's a low risk activity.
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Old Nov 17, 2012, 5:33 pm
  #51  
 
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Originally Posted by Bttc
I think the OP has the wrong complaint about Kiva: the problem with Kiva is half their lenders are horrifically usurious. Several of them have 40%+ interest on the loans. THAT IS A LOT.

There are some moral issues to charging that much interest for the loans.
Anyone care to elaborate on this? I'm rather confused.
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Old Nov 17, 2012, 5:34 pm
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Even though Kiva is a lending/payback program, one should treat it as a charity....... Donate something that you are comfortable with the intention of helping someone in need.......

If you are serious with getting something in return and repayments etc, I highly suggest bonds/fixed deposit.
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Old Nov 17, 2012, 5:46 pm
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Originally Posted by sk8uno
Anyone care to elaborate on this? I'm rather confused.
Kiva works with micro-lending organizations which in turn loan money to individual (or group) borrowers. Kiva does not charge interest to these micro-lending organizations. But the micro-lending organizations do charge interest to the borrowers.
It's important to understand that the costs involved in running a micro-lending organization are very high. For example many of the borrowers live in remote areas where communications, roads and other infrastructure are very poor. Doing due diligence on a third world borrower is a complex task. Also, most of the micro-lending organization provide many, many other services to help the borrowers in addition to providing capital.
Here are a couple articles which provide more explanation:
http://fellowsblog.kiva.org/fellowsb...misconceptions
http://www.kiva.org/help/interestRateComparison
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Old Nov 17, 2012, 5:57 pm
  #54  
 
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Originally Posted by onthego15
Kiva works with micro-lending organizations which in turn loan money to individual (or group) borrowers. Kiva does not charge interest to these micro-lending organizations. But the micro-lending organizations do charge interest to the borrowers.
It's important to understand that the costs involved in running a micro-lending organization are very high. For example many of the borrowers live in remote areas where communications, roads and other infrastructure are very poor. Doing due diligence on a third world borrower is a complex task. Also, most of the micro-lending organization provide many, many other services to help the borrowers in addition to providing capital.
Here are a couple articles which provide more explanation:
http://fellowsblog.kiva.org/fellowsb...misconceptions
http://www.kiva.org/help/interestRateComparison
Thank you, onthego15. This is interesting, and extremely frustrating.
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Old Nov 17, 2012, 6:14 pm
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Another place to help less fortunate and to increase spend:

https://www.zidisha.org/

What are your thought FTs?
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Old Nov 17, 2012, 6:25 pm
  #56  
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Originally Posted by onthego15
Kiva works with micro-lending organizations which in turn loan money to individual (or group) borrowers. Kiva does not charge interest to these micro-lending organizations. But the micro-lending organizations do charge interest to the borrowers.
It's important to understand that the costs involved in running a micro-lending organization are very high. For example many of the borrowers live in remote areas where communications, roads and other infrastructure are very poor. Doing due diligence on a third world borrower is a complex task. Also, most of the micro-lending organization provide many, many other services to help the borrowers in addition to providing capital.
Here are a couple articles which provide more explanation:
http://fellowsblog.kiva.org/fellowsb...misconceptions
http://www.kiva.org/help/interestRateComparison
Thanks very much for this! The first link doesn't fully address the problem that sometimes people take out loans out of desperation rather than being savvy calculators of cost and benefits, but it is still worthwhile. It would be great to have more granular data on this at it pertains to Kiva, but perhaps that's not possible.

The second link seems incomplete in that the link within it (on money lenders' rates) seems incomplete.

Still, both of the links you provide are well worth reading.
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Old Nov 17, 2012, 6:31 pm
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Well thanks to this thread I have already learned a lot about Kiva. Basically it looks like you are providing interest free financing to a series of enterprises that in turn lend that money on at huge interest rates to the end borrowers - justified by stating that the high rates (which are not disclosed despite a "transparency" claim) are not as high as other "local lenders". I am yet to be convinced any of the end borrowers have any resemblance to the people listed in the website. It's more like adopt a whale/dog/tiger type thing. You think you are adopting harry the humpback but in reality you are just giving money to some black box. So presumably for every 1 dollar you lend the borrower gets maybe 30 or 40 cents and the rest goes to these enterprises you folks are providing interest free financing for.

Maybe I am too cynical, but as I have said before, I find other ways to give back that I have more faith in.
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Old Nov 17, 2012, 6:50 pm
  #58  
 
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Originally Posted by ma91pmh
Well thanks to this thread I have already learned a lot about Kiva. Basically it looks like you are providing interest free financing to a series of enterprises that in turn lend that money on at huge interest rates to the end borrowers - justified by stating that the high rates (which are not disclosed despite a "transparency" claim) are not as high as other "local lenders".
This is what I learned, as well. I have never used Kiva, but my impression before this thread was that the borrowers received interest free loans. Now I see it is more akin to a Red Cross that charges the recipients of its aid.
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Old Nov 17, 2012, 6:57 pm
  #59  
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Originally Posted by ma91pmh
Well thanks to this thread I have already learned a lot about Kiva. Basically it looks like you are providing interest free financing to a series of enterprises that in turn lend that money on at huge interest rates to the end borrowers - justified by stating that the high rates (which are not disclosed despite a "transparency" claim) are not as high as other "local lenders". I am yet to be convinced any of the end borrowers have any resemblance to the people listed in the website. It's more like adopt a whale/dog/tiger type thing. You think you are adopting harry the humpback but in reality you are just giving money to some black box. So presumably for every 1 dollar you lend the borrower gets maybe 30 or 40 cents and the rest goes to these enterprises you folks are providing interest free financing for.

Maybe I am too cynical, but as I have said before, I find other ways to give back that I have more faith in.
Originally Posted by sk8uno
This is what I learned, as well. I have never used Kiva, but my impression before this thread was that the borrowers received interest free loans. Now I see it is more akin to a Red Cross that charges the recipients of its aid.
Even though I've raised questions myself, I wouldn't necessarily jump to these conclusions. The issue really reaches beyond Kiva to microfinance more generally, but it is very possible that under some circumstances people really do get a chance to move ahead in life even though they pay interest rates that we would consider too high in a domestic context. And there are many other factors at play that make this a complicated issue and that mean that what Kiva does could well be very worthwhile.
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Old Nov 17, 2012, 7:19 pm
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Originally Posted by Thunderroad
Even though I've raised questions myself, I wouldn't necessarily jump to these conclusions. The issue really reaches beyond Kiva to microfinance more generally, but it is very possible that under some circumstances people really do get a chance to move ahead in life even though they pay interest rates that we would consider too high in a domestic context. And there are many other factors at play that make this a complicated issue and that mean that what Kiva does could well be very worthwhile.
I don't doubt that the borrowers find this very useful. I'm not anti-lending nor anti-interest. But I don't see why I should lend my money interest free so that someone else can turn around and lend it subject to interest. If I'm lending money to someone interest free, it's because I want that person to have money interest free. It's a charity service.

I now see Kiva is not a charity service. In fact, I now wonder if it actually limits the amount of capital poured into microfinance. Since the borrowers are willing to pay interest, imagine how many more people would be willing to invest in microfinance if the lenders made a modest return.
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