I am still a big proponent of investing in and own several mutual funds and stocks in green technologies and companies, but I often wonder “will that actually affect the biggest change?”
Most investments now days have been marred by scandals. The stock market was hit with internet bubble stocks, declining bank stocks, failing financial institutions, bankruptcies, real estate, you name it, it has suffered somehow. Almost makes you want to go back to your local savings account. Rather than leaving your money to wallow under inflation in a piggy bank or mattress, try investing in people.
Microfinance has been around for some time, however, companies like Kiva are making it even easier to select people and causes close to your heart (or investing strategy) while providing more security from default than with individual investing. Each loan is carefully selected by field partners and volunteers, but it remains a very personal feel. You get to essentially meet (via a personal profile) the individual you are loaning your money to and understand their pursuit and the needs of the community.
Kiva also makes microcredit available to individuals and small businesses who would be unable to afford the high interest rates of traditional banks, or lack the appropriate savings or money (many have savings in the form of livestock, jewelry, food, etc.) which does not easily translate to credit or money in the traditional view of banks and creditors.
It is a great way to help developing countries and developing ideas to be realized all the while benefiting local communities and passionate individuals with little means. Real change happens at this level, and by supporting individuals on a community level, you can help be responsible for enriching the lives of the entire community for the long term.
Kiva has already managed almost $280 million in loans with a 98.88% repayment rate. These aren’t big loans by a few people, there are almost 700,000 lenders providing as little as $25 to provide a means for a business to exist. The surprising thing is that you are changing lives without actually ‘donating’ the money, you get it all back!