Tuesday, June 30, 2009

Microfinance. Beyond empty slogans?

Saw this banner ad on Parul's blog and clicked lazily. Was surprised to see something that looked worthwhile, for a change. Kiva appears to be an organization that helps online lenders provide small (or big) loans to poor entrepreneurs. These are semi-skilled people who will not get loans from traditional institutions (that are too busy paying hefty bonuses to care). All they need is a few dollars and some basic hand-holding to cross the bridge between destitution and dignity. Kiva does not guarantee that the money will be repaid but they do have a system to track the repayment. If you wish, the money can be re-lent or donated to Kiva for covering their opex. Click here for more

The reason I post about this is two-fold. One is that I found the simplicity of the idea marvelous. All you need to do is browse through profiles (just like say, on Facebook) and click a button to lend measly amounts starting from $25 to an entrepreneur you like. A progress meter shows how much the entrepreneur needs and how far they have succeeded. Often the principal required is as low as $500!

Considering how we end up spending $50 on just a weekend outing to the movies, imagine how the same "disposable" money could fuel the engine of growth for a poor family! Kiva, and others like them, are part of a humbling and direct effort.

The other reason I decided to express this post is that I am not sure how real this organization is. I only found this through a banner ad. On the Internet, how does one know whether the people behind the style-sheets are genuine, worthy individuals or merely scamsters out to squeeze the emotions (and dollars) from a blog-loving public? Look at the Fake Mommy fiasco, that fooled a lot of people for a lot of time.

Then, how does one validate that those stories of need and enterprise are true, that the money will reach them and that they will use that money productively? Skeptics wonder the same about established, non-transparent organizations like Cry and Concern as well. However, I was drawn to the simplicity and power of the change that microfinance seems to promise. "Garibi Hatao" with an agenda, not just with slogans.

I hesitate only because the Internet that makes things so simple, also obfuscates the truth.

Is there a way to ensure good intentions come with KPIs? Does it help to have other websites like this one tracking the myriad microfinance sites? Or is it even worth thinking so much about it? After all, when it comes to spending that same $50 on first day show of some new YashRaj Films trash, we prefer to leap before we look, don't we?


DotThoughts said...

I am a regular KIVA contributor. I like the fact that the money is loaned. To me, that goes a long way in making an enterprenuer out of a person.

Anonymous said...

But again the cynics (like me) would be skeptical of its genuineness...

Vidooshak said...

Thanks for the comment, DotThoughts. I am glad Google Ads brought up something real and worthwhile. Most often the ads only point to fake and crappy websites or products. Your validation will allow me (and maybe others) to support this great cause.

Neha said...

mera blog padhne aur comment ke liye time nikaalne ke liye dhanyawaad....aapne acchi jaankaari di.

Ann Dee said...

Wanted to hop straight to Kiva..But thought I should drop a line....Very thought provoking post. Will keep coming by.