I’ve just made my first micro-finance loan through Kiva. You can find out more about them at Wikipedia.

Basically you loan money to entrepeneurs in developing countries, through Kiva. It is called as they are all for small amounts, and the typical lender contributes $25 – so 40 people lending $25 allows $1,000 to be made available.

The default rate is only 2.5%. This means if you lend $1,000 through it, you’ll on average get back $975. But instead of just donating $25 to  a charity, you are helping fund $1,000 of business development.

I’ve just lent US$25 to a 24 year old in Nicaragua who is expanding her parents painting business. She is after US$1,000 and has previously paid back two prior loans.

I really encourage people to sign up, and loan money if they are able to do so. It’s a great innovation.

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