A comment on Kiva

Columnist Chris Noseworthy of the Western Star from Newfoundland, Canada used his latest column to talk about Kiva.org. For his wife's birthday this year, he chose to give gift certificates to the microcredit website.

This year I actually had a good idea. I got her gift certificates, among a couple of other lame things I won't mention. The gift certificates are ones she needs to spend on somebody else. How is that better than a breadbox?

Well, the gift certificates are from Kiva.org and translates into micro-loans to someone in the developing world. You may have seen Kiva featured on Oprah a couple of years ago. It's a charitable organization that has field partners in various countries who work with entrepreneurs in order to get loans.

The money comes from generous people around the world who fund these projects in $25 increments. Each entrepreneur's loan will be supplied by a variety of different people.

It is still a novel approach to sharing the riches of the Western world. To my mind it cuts through partisan boundaries as well.

Anything that helps the poor, works with lefties and the loan has to seem better than a "handout" to the right-wing contingent.

According to their site, the mandate is "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 entrepreneurs around the globe."

You might wonder how these people can afford to repay the loans but they do. Kiva is upfront about the fact that there is no guaranteed return on your investments.

According to Kiva, "Of the $31,143,760 of loans with completed loan terms, the default rate is 1.8%. However, past repayment performance does not guarantee future results. When you lend money, you may lose all or some of your principal. You should be aware of the different types of risk and find the right loan option for you, with respect to repayment risk and social return."

Less than two per cent is pretty good. You can visit the site to find out more of the details on the risk associated with lending through Kiva.