A few days ago I was thrilled to receive an email that started out:
An interest payment of $3.58 was recently added to your PayPal account for the following: Manuela Ramos via Oikocredit Global Community Note.
Granted an interest payment of just over $3 isn’t much to be excited about, yet this email warmed my soul. You see, Manuela Ramos-Credit Mujer is a non-governmental Peruvian organization that makes microloans (very small loans, usually under $100) to economically empower women. I found the organization through Microplace, an ebay company that matches small lenders like me with small borrowers in the developing world. On Microplace I was able to read the profiles of a number of organizations around the world and choose which one I wanted to lend my money to. The organizations choose the actual recipients of my loan, but profiles of some of their clients are available on Microplace.
The loan I chose to give is a 3-year loan with 1.5% interest rate. Granted that’s not a very good interest rate compared to what I might get on Wall Street but it’s better than the money just sitting in my checking account. I love the idea of my money at work to empower women who just need a little boost to move their businesses to the next level. These women are small shop owners who use the funds to buy their first inventory or artisans who use the loan to buy raw materials (like those I buy from for Bambootique). Recipients of loans on Microplace, and actually recipients of most microloans, have an incredible payback rate of almost 100%.
I am a big believer in economic empowerment of the poor over charitable giving, since economic empowerment is sustainable for the longer-term while charity tends to solve problems only for the short-term. If you’re looking for a way to be involved in ending global poverty but want to do something beyond giving handouts, consider an investment through Microplace or Kiva, a similar organization I’ve blogged about before. With both organizations you get your money back, so long as the borrowers pay back, although with Kiva there is no interest. With both organizations you get heart-warming emails about your $3.58 of interest and the opportunity to truly change someone’s life for good.
Have you made a loan through one of these organizations? What has your experience been?