I have been investing money into Kiva.org while I was in the UK from money I was getting in my PayPal account from various things that I do and I wasn’t in a rush to receive the money. Kiva you can add money and lend to Entrepreneurs in developing parts of the world to help them get a lift up. You lend them money at 0% interest which I have no problem with as its pretty much as good as any UK bank will give me interest on savings. So all was fine until I noticed that there is some small print that I clicked on by accident that “Self-sustainability is critical to creating long-term solutions to poverty, and charging interest to entrepreneurs is necessary for microfinance institutions to achieve this. Our Field Partners are free to charge interest, but Kiva will not partner with an organization that charges exorbitant interest rates. We also require Field Partners to fully disclose their interest rates. You can find more information about the interest rates that Kiva’s field partners charge on our Field Partner pages: http://www.kiva.org/about/partners”.
So I started to look at “Kiva`s business partners” that I had loans out on and the rates they charge :-
Alalay sa Kaunlaran, Inc. (ASKI) average interest = 50%
The majority being above 40% interest wouldn’t you love that on your bank account? Also bearing in mind a lot of the loans are several months I think my longest is 14 months so it would see at least 40% interest on my money.
Why I am I complaining? Because its not “CHARITY” this is business and I am tired of people hiding under the umbrella of a charity organisation. This is 100% business these people are money lenders not some people with a divine purpose in life which is what they try to hide behind. Money lending is part of life here in the Philippines and a daily part of ours. The thing about financing in the Philippines is the general public those who are the ones who need access most pretty much cant borrow money from banks as they have nothing the banks need. So getting credit is expensive because you can only really get it from the money lenders or micro-finance organisations. What about collections would this justify the high interest? To be honest the Philippines operates in a more “village” type environment which basically means you don’t have to go far and no doubt the lending organisations on Kiva will have field agents who do the collecting or receiving. Either way they are making a lot of money off other peoples good gestures. It may sound a bit odd but even if you loaned out a small amount remember that Kiva.org have millions of pounds and dollars donated on there to these loans. The lending partners take none of the financial risk but all of the gain. All I can see is that we are being taken for a ride. Rural banks used to offer interest rates of upto 20% in the Philippines if you locked in your savings for 12 months you can see why now. I am still able to get around 10% savings on a rural account but currently our money is invested in other projects which are more viable and unlikely to disappear overnight like the Legacy collapse.
So what is my answer to helping others? I think personally there are only a couple of real options. The first is “do it yourself” and the other is something I am looking at with the Aquaponics as a “home kit”. Now me being me I would look to in the future that if you sponsored a kit for someone to start producing fish and plants that they would repay the money back to you over a period of time once they have learned how they can make money from it. That way you can either “donate” or get your money back its upto you. The reason I loaned out on Kiva in the first place was its people who are willing to help themselves and anything I do “real charity based” the backbone of the idea is that something comes out of it for everyone. Ideally you get your money back and the people who are doing whatever it is they are doing get a business they can develop. Taking it a stage further things like jewellery you could become a selling agent and even take a commission on at the same time helping others. But at that stage it would have been already a completed “starter cycle” and you would be dealing with each other as a business.
Its about time people started questioning where they send money to and what it really gets spent on. I know its common for “administration” and “processing fees” to swallow up the majority of money donated to so called charities who are in reality companies. My question to you would be if your making money off the back of poverty what interest is it to you on ending it? You would be putting yourself out of the gravy train that keeps you in a nice comfortable state of limbo or even making you rich.
Don’t get me wrong I do business ventures aswell the difference between those though is they are purely business. The charity projects that I am currently doing with the Aquaponics are to help relatives increase incomes within the family that will be expanded out once I get to grips with it. The important point about this post though was to get across double check where your money is going!