Recently I started getting into microloans. A microloan is a small sum loaned to an individual or group, usually in a developing country, that they can use to help complete projects that are important to them, start or expand a business, and more.
One thing that encouraged me to take a look into this was when I learned of people who can’t lift themselves out of poverty because they don’t have a nickel. Imagine being in debt for the rest of your life and watching your kids go hungry for the lack of a few pennies.
In some countries the lack of access to capital is the main limiting factor in creating prosperity. I heard one story where a combined loan of $42 would have been enough to lift 27 people out of poverty (that’s only $1.56 per person).
Microloans, as opposed to pure charity, are more in alignment with my principles. I want to empower people to help themselves, not to “help” them in ways that disempower them and perpetuate an endless cycle of poverty.
Fortunately there are microloan companies that make it easy to help out. Last time I checked, more than 100 million people have already been helped by microloans — the kinds of loans that traditional banks won’t do.
I recently started using Kiva to make microloans to people. So far I’ve made loans to people in Lebanon, Peru, Mozambique, Nicaragua, Benin, the Philippines, Tajikistan, and more. Sometimes I loan the minimum of $25, and sometimes I loan more. It’s very easy to loan people money this way — really just a few clicks.
Most of the loans I’ve seen have repayment terms in the range of 9 to 18 months. I intend to keep recycling the money in my account, so as it gets repaid, I’ll loan it back out again. This way some of my money will always be working to help others. I haven’t been using the service very long, but if I like what I see, then I can add to my account over time and keep a good chunk of cash supporting other people’s goals at all times.
You can loan as little as $25 to someone, paid via PayPal. According to kiva.org, 98.79% of their loans are repaid, and when you get paid back, you can re-loan the money to someone else. I don’t think you earn any interest on your loans, but it’s a good way to put some of your extra cash to good use. It’s also a good way to shift your vibe. It’s hard to feel down when you’re helping others.
Most of the time, you’re funding loans collectively with many other contributors, so it’s not just one funder per loan. There may be a dozen or more people contributing to any given loan.
I like that you can review the details of each loan and make loans in alignment with your values. I wouldn’t fund a slaughterhouse operation, but I’m happy to help a farmer upgrade the irrigation system for his fruit trees. Most of the people I’ve funded so far have fruit-related businesses and need money to expand. It was easy to find these businesses just by doing a search on “fruit” on the site. This isn’t the only thing I care about, but it was an easy place to get started making loans that I feel good about.
Another thing I like is that your microloan money doesn’t go towards overhead. There’s some complexity based on how they pre-fund the loans — feel free to read through the text on their site if you want to know how it works from start to finish — but the bottom line is that 100% of your loan goes to support the people receiving the loan. You can make a separate donation to Kiva each time you make a loan, but that’s optional. Kiva has other supporting partners like major corporations and foundations (Google, Microsoft, etc.), so you can simply make loans without donating to Kiva directly if you so desire.
Microloans can’t solve all the world’s problems, but they do make a positive difference in the right situations. The originator of this idea won a Nobel Prize for it. Personally I think it’s a wonderful concept, and I’m happy to lend my support to it.
I encourage you to look into microloans, whether via Kiva or some other outlet. It only takes a few minutes to select and make your first loan, and the second time it’s even faster. A small action on your part makes a positive difference for someone else, and it certainly feels good to help people in this way. After doing 14 loans so far, I can literally find and make a new loan in about 60 seconds. The site is very easy to use.
If you want to, you can see the loans I’ve made via my Steve Pavlina Kiva page. If your values are similar to mine, feel free to piggyback on my choices and help fund one or more of the loans I’ve chosen.
Update: I just started a community lending group on Kiva called Team Pavlina, so please join our group if you’re on the site. This will allow us to see what kind of difference we’re making collectively. The team page doesn’t account for previous loans you may have already made, but it should track all the new ones.
Another Update: In our first two hours, Team Pavlina has already funded $350 in fresh microloans. That’s awesome!
Yet Another Update: A few hours later, our team has funded $1125 across 40 new microloans. We’re actually one of the fastest growing teams on Kiva. 
Please join us in helping people help themselves. $25 isn’t a lot for you, but it can make a big difference to someone else.
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