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What a big impact a little money can have…

What I dislike in donating

Really, I’m not too big into making donations.

It’s not that I’m greedy and what to keep everything for me.

It’s also not that I’m parsimonious like Mr Scrooge. Actually, I do want to see some of my money put to use for people that need it more than I do.

I sometimes have the feeling that the donations drain somewhere in the administrations of the big charity organizations.
Especially I find it hard to see how my efforts – as small as they are – will do something against large problems like hunger or AIDS or natural disasters.

So, in general, making donations usually leaves me with the feeling of having given too little to be useful or to make a difference. That’s why I don’t like donating.

Anyhow last week a very good friend of mine send me an email. As she knows I’m no big fan of “send-me-money-spam” I was pretty sure that this wasn’t the usual begging crap you get especially before the holiday season starts.

An alternative in sight!

The email was about lending money to people that don’t want it as a present but that want to do business.
They don’t want a gift, but they want to finance their short-term business requirements.

The email was talking about micro-loans.

Micro-loans are very small volume loans usually starting with a few hundred bucks up to a few thousand. Banks often don’t see much business in micro-loans – although they can make all the difference for small businesses.

Micro-loans do help people that are working hard and who are in business.
Anyhow, they might most often not get loans from commercial banks because they often don’t have many securities.
For Banks this is the classic no-go; they don’t even put a few hundred dollars at risk here.

So, actually, micro-loans enable the small-scale entrepreneurs to stay in business and to increase the welfare and the GDP of their country.
They help them to stay in a position to take care of the lives of their families themselves – moving them away from the need for any outside gift giving.

Fortunately, there are organizations around that make it possible for everyone to become a lender for those people. One of them is called *Kiva* and that was the one mentioned in the email I got.

Kiva - loans that change lives

The people at Kiva provide a platform for giving loans.

What is it about?

They’ve everything there: profiles of people (that’s right, it’s about people, not companies!) that need a loan, you see who they are and what they do with your money.

They allow money transfer with the usual credit cards or PayPal – so it’s pretty secure.

Let’s be clear about this: you don’t get any interest for your money, you just lend it.

But to me, this really feels a whole lot better to me than simply give away my money to anonymous charity organizations where I never know what they do with the money and if it will ever reach somebody in need of it.

The loans are limited in time and you get updates on the what they do with your money while it runs. And yes, there IS a risk of default loans and the people of Kiva don’t hide it.

In fact, you can browse through the list of loans and see which ones are still running, which ones have ended and the defaulted ones as well.

Anyhow, you can start giving micro-loans starting from $25 – so where’s the risk?

What’s in there for Kiva?

How do they get the money they need to provide all that? Good question!

In fact, they do need donations which can be made with every loan you give.
But you don’t have to. You can decide independently of your loan whether or not and how much you are willing to donate to this platform.

Ok, as I said, usually I’m really not into the charity thing, but I really liked *this* idea, so I decided to let you know about this.

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