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Thoughts on micro-lending


A colleague on a recent service project in Jamaica does a couple service projects in Africa every year.  He is also involved in micro-lending which I was aware of but not knowledgable of the mechanics.   There are attractive features economically to micro-lending and the review process has in his experience (retired management consultant) been good.  Almost all of my current charitable spending is through organizations in which I know the principles and some of the board members, some of which I do service work for.   Micro-lending appears interesting, as you get to review each loan you contribute to, somewhat like being on the ground and providing funding for clear needs.

What are your thoughts on micro-lending from an economic viewpoint?  While these are loans, and not grants, it is providing funding directly to small entities that need funding, which is how I still think is the best way to handle poverty in many places.

Micro lending can be fantastic. There are bunch of good organizations like Kiva that do this and help to filter the needs/opportunities. I personally prefer charitable donations to organizations or individuals in need, but it's an interesting and useful type of lending in certain situations.

The economics of it are different than banking of course and more like a non-bank lending function, but that doesn't mean it's not useful.

"Pragmatic Capitalism is the best website on the Internet. Just trust me. Please?" - Cullen Roche

Thanks.   As I noted I donate mostly through a few organizations I have direct contact with which can be very effective in terms of low overhead and impact.   Most of my spending and volunteering is in education.  The clever and appealing aspect of the approach of Kiva is you feel you have a little control over the type of endeavor being funded.