About 10 months ago I joined www.kiva.org for my first experiment with a micro-loan. If you have not encountered this yet, micro-loans are a growing industry in developing nations all over the world. The idea is quite simple, these are very small loans many less than a few hundred dollars to help someone start or expand a business. They have a remarkably low default rate and 100% of your loan goes to the person in question. It is not charity… it is a loan they have to pay back, and when you read stories about it, there is great social pressure to do so. You don’t have to cover all the loan yourself. With Kiva, you can fund as little or as much of the loan as possible.
I signed up to the tune of $200, to help complete a loan for a woman wanting to expand her clothing store.
Today I was fully repaid, and it was repaid early! With Kiva, you don’t take your money back out. When the loan is repaid, you you can use the credit to make more loans. So I have reinvested in two more people and can keep doing it over an over. A nice little system.
go to http://www.kiva.org