A Near-Zero-Cost Approach to Do-Gooding: My 375th Kiva Loan

07/16/2009 05:12 am ET | Updated May 25, 2011
  • Bob Harris Author, The International Bank of Bob: Connecting Our Worlds One $25 Kiva Loan at a Time (Walker/Bloomsbury)

Maria Shriver promotes it, Hillary Clinton talks it up in commencement speeches, and the guy who thought it up won a Nobel Peace Prize: microfinance may the world's fastest-growing and arguably trendiest form of lending a hand.

If the news hasn't yet reached you through the media haze of Jon & Kate, Heidi & Spencer, and Sarah & Dave, microlending is an extremely simple idea: people like you and me in the industrialized world help folks in the developing world not with outright aid (which is obviously essential in many situations, but can distort economies if misapplied) but with tiny loans which reach the borrowers at a much cheaper interest rate than they could get any other way.

Some guy in Mongolia needs feed for his cattle? You and 50 total strangers front him $25 each. A cabbie in Beirut needs to fix his taxi? Maybe 50 other people chip in online. A beauty salon in Tajikistan is running short on supplies? Point, click, loan money.

Metaphorically, it's not giving someone a fish, and it's not teaching someone to fish; it's helping a fisherman patch a hole in his rowboat so he can get on with life. is a Bay Area start-up that quickly became a global leader in online microfinance, and there you'll find basically what looks like an eBay for doing good: drop-down menus, photographs and bios of potential borrowers from all over the world, and a shopping basket and PayPal checkout, just like you're buying stuff instead of loaning cash.

Six months ago, I had the same questions you might right now. Is it really as easy and rewarding as its advocates say? Is it actually safe to put your own money in? You really get paid back, the recipients get clean water filtration or a new ox or a better ceiling or whatever they need, and everybody's happy?

So far, after making 375 loans to people in 42 countries, I can say with some growing certainty: yup.

I first got my feet wet with a loan to a small grocery in Uganda, chosen from the hundreds of potential recipients on the site for reasons both charitable and crass: I wanted to loan to somebody who really needed it, but whose business I at least understood well enough to feel fairly confident about repayment. (As if $25 would make a difference in my life, comparatively? I'm a bit ashamed at even thinking it, but hey, if it was in the back of my mind, it might be in yours, too.)

Pretty soon, however, visiting the site, and then reading all the stories of people building lives and communities all over the world got to be inspiring -- addictively so.

You want to put your own troubles in perspective? Spend a few minutes mulling the resourcefulness of people like Poung Teak, a 39-year-old Cambodian father of three who climbs palm trunks for a living. (He taps the sap near the top and refines it into sugar for resale.)

My first reaction: dude supports three teenagers by shinnying up trees all day? Um, sure -- I can spot him $25 until payday.

That's the sort of stuff you find there, over and over. It's hard not to find a few extra bucks. (In my case, I have spare cash in my pocket from writing a bunch of luxury travel reviews. Putting that money into Kiva somehow feels like karmic balance.) Plus, you realize that by building economic bonds like this, not through state and corporate mechanisms but on virtually a person-to-person level, you're sending a palpable, practical message of peace and shared humanity into parts of the world that need it most -- and where we need to send it most.

This morning, for the first time in my account, three loans -- to a Nicaraguan tailor, a Peruvian student, and a Filipino grocer -- were paid in full. A few hours later, the very first loan I made -- to that grocery in Uganda -- was all paid up as well.

Sure, you can pocket the money when it comes back. (Which is almost always does -- Kiva's overall default rate is currently less than two percent. Given recent stock market downturns, you may well do better with Bolivian woodworkers than the S&P.) But where's the fun in that?

So today, the $25 that came back from Nicaragua, I sent to a student in Costa Rica. The cash from Peru went to another shopkeeper in Uganda, and the money that came in from The Philippines went to a teacher in Mozambique.

When your loans get repaid and you shuffle the money off to somebody else, it feels like you're running your own tiny foundation.

And remember: this costs me virtually nothing, other than the time value of the money while it's out of my hands and the rare one or two percent of loans that default. (That said, I haven't had a single default so far.) And for that fair price -- a few farthings above free -- you get to reach across the world like this:


Neat, huh?

Some Kiva lenders think of their loans as like a personal savings account that does good while it's floating around. In my own case, if I keep tossing a few bucks in here and there for a few years, eventually the account may dwarf my IRA. And now that repayments are starting to keep my account almost reloaded on its own, this is starting to look like a lifetime hobby.

It's one you might enjoy yourself.

If you'd like to play, too, check out Those folks deserve a medal -- which, I am sure, they would melt down, convert to hard currency, and then loan to a shepherd in Tanzania. (Not even really kidding. They seem extremely cool that way.)

(You can also check out my lender page there if you're curious. There's also my site or my Twitter feed for related splurts. But let's be clear: Kiva built the ark here. I'm just one of the creatures that wandered on.)