How to get involved in Microfinance…from the comfort of your desk!

By now, I hope you have had the chance to read the three part introductory series on microfinance. As you can see, microfinance is one of the most cost-effective and powerful tools in fighting global poverty. Want to get involved in the field of microfinance? Now you can, with  Kiva.org and Microplace!

Kiva.org is a non-profit facility that connects everyday people to aspiring micro entrepreneurs across the world who seek loans. You can directly lend as little as $25 to a Nigerian cattle herder or a Nicaraguan grocery store owner who seeks small loans to start or expand their business. The website allows you browse various entrepreneurs and search for loans requested based on location of entrepreneur, size of loan, payment period, and type of business. Each loan request has a page detailing the necessity for the loan, how the loan will help their business, a picture of the borrower, and statistics on the MFI that the borrower belongs to. In just three years, Kiva.org has had 340,000 LENDERS in 135 countries who have LOANED $45 MILLION DOLLARS! When your loan is paid back, you can redeem your money or reinvest your capital. This website is safe, secure, and reliable and has received lots of attention from the national media.  Make a big difference today with a small loan! All it takes is $25 loan to change a life.

Currently, I finance 4 entrepreneurs on Kiva.org. I receive regular updates from the borrowers who provide a status on how their businesses are going and when they make installments on the outstanding loan. Check out my loan portfolio at the following link: http://www.kiva.org/lender/abishek4795.

There is a second website that allows you to invest in microfinance- with a little twist. Microplace, is a wholly owned subsidiary that Pierre Omidyar and the folks at Ebay purchased in 2006. So, what’s the twist? Kiva.org utilizes a peer to peer zero interest lending model (you lend directly to an entrepreneur in a developing country), whereas, on Microplace you are purchasing securitized microfinance loans. Essentially, a microfinance institution issues debt securities that you can invest in. They take the capital that you loan, solicit borrowers and disburse the loan and collect payments. Once, the loan is paid off, the MFI will return the loan PLUS INTEREST to the loaner! Microplace is a registered broker dealer and offers a platform enabling social investing while receiving a decent return (1.5%-4%).

Deutsche Bank reports that the microfinance industry needs over $250 BILLION to get the necessary capital to the working poor who need it. To date, only about $30 billion has been funded.

My friends, there is a huge void to fill. Rather than donating money to charity, make a social investment in the poor. This money can be recycled again and again, and have a huge social impact in the end.  This is an investment in the poor, not a charity. You are giving a hand up to the world’s poor, not a hand out. Let’s deliver that knock out punch to poverty. Poverty is not created the poor. The poor are not lazy; they are not stupid. Poor people are endowed with the same amazing talents, energy and creativity that all of us have. I’ve seen this time and time again as I visit each village. Poverty is created by the structures of society and the governing policies. With the support of microfinance, the poor have consistently shown they can change their own lives given the opportunities we have.

Start today by joining kiva.org or Microplace- it’s fast, easy, and impactful. Be a leader and make a difference today.

There are a lot of exciting new posts in the pipeline in the coming days for blogabiv.com! Stay tuned for a comparison on Kiva and Microplace, , pictures and video clips from village visits that I made during the week, the concept of 21^st century social businesses, and more!