A New Aesthetic

Sawadee Krup, Loan Me $200

Kiva.org's microloans are creating new opportunities in developing countries.
Sawadee Krup, Loan Me $200

Last spring I invested $200 in Kiva and discovered microlending. Lending that money to people in the developing world to further their business plans felt like genuine, guilt-free altruism; like teaching someone to create fire instead of tossing a raft at the moat around a stranger’s unfathomable life. For the price of a dinner in the city, I could empower another human’s livelihood by helping feed his or her community’s demand for raw essential materials like animals, spices, seeds, produce, grains, clothing, sewing supplies and so on.

Facing our battered economy, microlending through Kiva (kiva.org) seems like enlightened venture capitalism. Partly because of the glaring lack offine print, but mostly because the $200 I used to start an account last year was the first meaningful investment I’ve ever been able to make. I lent $125 to a Tanzanian woman trying to expand her tailoring business by raising $1,050 for supplies and equipment. The rest went to five women from Uganda – a slice of the $1,375 they needed to start a piggery and buy inventory for a grocery, a used clothing store and a hair salon.

Like the tens of thousands of other profiles at kiva.org, these entrepreneurs’ stories were short and unvarnished, their goals modest. I searched faces from places in perpetual upheaval: Africa, South America, South Asia. I read about people struggling to control their lives by trying to resuscitate their communities: poor farmers and tradespeople; folks who could survive by mobilizing raw goods or essential services; people wanting to create healthy, affordable meals.

Later I recognized this as the brilliance of microfinance: it revalues disposable income (for those who have it) by putting a price tag on basic, necessary, attainable ideas. In Kiva’s excellent model, online lenders and fledgling entrepreneurs are allied via the nonprofit’s field partners, nearly 100 vetted microfinance institutions in 44 countries (and growing) with gaping poverty lines. Their common goal: to flush the world’s poorest pipe dreams with cold, hard cash; to catalyze credit flow for humble people who probably won’t use it to debauch their psyches; to turn dependants into providers using small fortunes.

In about three and a half years, Kiva has funded 145,000-plus impoverished entrepreneurs with more than $60 million. Lenders set a radical pace in 2008, making nearly two loans every minute.Amazingly lenders recoup their investments more than 97 percent of the time, typically within about a year. The two loans I made in early ’08 are mostly repaid, and I’ve recycled that money (plus another $50) to a group of Ugandan produce traders, a pair of Cambodian food retailers and some Pakistani and Filipino grocers.

This is where Kiva really gets interesting: less than 10 percent of lenders actually take back their money. They leave it overseas, let it change lives. You might chalk that up to microfinance’s easy, inexpensive gratification. But what’s happening here is a sea change in charity’s watermark, a reincarnation of the meaning of potential. Microfinance is becoming a beacon for people who are uncomfortable with their geographic advantage.

For example, take the logistics of turning isolated, sometimes destitute entrepreneurs’ loan requests into websites – some 500 translators and editors worldwide donate their time and skills to the effort. Kiva’s fellowship program, perhaps the best hands-on access to a microfinance education you can find, is growing, buoyed by a largely volunteer infrastructure. The San Francisco-based company’s proximity to Silicon Valley has been a perennial resource boon.

Meanwhile, the West’s suicidal economic tendencies have yanked the bulk of us from a black hole into a bloodbath. It makes me wonder: just as the Internet has usurped distribution powers from bloated entertainment labels, could microfinance avert the catastrophe of our free market banks?

The answer may come sooner than you’d think. Why? Because Kiva will soon start lending to Americans.

Eric Rumble is a Contributing Editor at Adbusters and his work has appeared in Up! magazine, Saturday Night, THIS Magazine and the National Post.

52 comments on the article “Sawadee Krup, Loan Me $200”

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Lou

Reply to "Let developing countries develop on their own. Let them develop naturally and without our corrupting influences." Developing countries cannot develop without our corrupting influence. We live in a intereconnected world..you are correct to point out that every action has an opposite reaction. When you buy your shoes, clothes, when you use fuel to heat your home or run your car, do you stop to think about how your clothes were made- in what conditions, in what factory?? Do you stop to think where your government gets its fuel- how that ends up in your governmet supporting dictatorships in order to keep the oil supply flowing to your car? You are directly hurting people in the developing world everyday through your actions. Stop making excuses and accept your responsiblity. The reason Foreign Aid does not work in many cases is because it goes to the wrong people and is used by them people in a bad, wasteful and often corrupt way. Microloans are a possible sollution to the huge inequality that exists in our world today. Whether you realise it or not people in the developed world benefit directly from the poverty of those in the developing world. To use the negative effects of aid to justify turning a blind eye to those in dire poverty in our world today is irresponsible. This 'its better to let them sort out their own problems' mentality is so frustrating. The reality of the situation is that many people in dire situations do not have the resources to get out of that situation. And here is where people invoke the 'look at Nigeria they have vast natural resources and could sort themselves out if they tried' argument.The US has supported authoritarian leaders in Nigeria because it needs to get oil form these leaders..the US has turned a blind eye to the fact that the aid it gives goes into the pockets of rich corrupt politicians so that people in the US can enjoy warm homes and cars. A child born into Nigeria today does not choose to be born into poverty. That poverty is forced upon the child. We need to work out how we can help such children. We in the Western worl have so many oppurtunites and resources we just need to work out how we can help those individuals whose day to day life is a struggle for survival.

Lou

Reply to "Let developing countries develop on their own. Let them develop naturally and without our corrupting influences." Developing countries cannot develop without our corrupting influence. We live in a intereconnected world..you are correct to point out that every action has an opposite reaction. When you buy your shoes, clothes, when you use fuel to heat your home or run your car, do you stop to think about how your clothes were made- in what conditions, in what factory?? Do you stop to think where your government gets its fuel- how that ends up in your governmet supporting dictatorships in order to keep the oil supply flowing to your car? You are directly hurting people in the developing world everyday through your actions. Stop making excuses and accept your responsiblity. The reason Foreign Aid does not work in many cases is because it goes to the wrong people and is used by them people in a bad, wasteful and often corrupt way. Microloans are a possible sollution to the huge inequality that exists in our world today. Whether you realise it or not people in the developed world benefit directly from the poverty of those in the developing world. To use the negative effects of aid to justify turning a blind eye to those in dire poverty in our world today is irresponsible. This 'its better to let them sort out their own problems' mentality is so frustrating. The reality of the situation is that many people in dire situations do not have the resources to get out of that situation. And here is where people invoke the 'look at Nigeria they have vast natural resources and could sort themselves out if they tried' argument.The US has supported authoritarian leaders in Nigeria because it needs to get oil form these leaders..the US has turned a blind eye to the fact that the aid it gives goes into the pockets of rich corrupt politicians so that people in the US can enjoy warm homes and cars. A child born into Nigeria today does not choose to be born into poverty. That poverty is forced upon the child. We need to work out how we can help such children. We in the Western worl have so many oppurtunites and resources we just need to work out how we can help those individuals whose day to day life is a struggle for survival.

Lloyd Pitcher

Lou, Thanks for your response. I'm glad that someone out there is thinking about these issues too. I agree with you on the negatives of our current global economic system and the inequalities that they perpetuate. I do realize that when I put gas in my tank some Arab is getting rich, or if I buy a pair of shoes someone in a sweat-shop had to make them....trust me, I get it. What I don't get is foreign aid. How is giving money to people in third world countries going help them? First of all, one must begin with the assumption that their situation is worse than ours. Is this the case? Has the average Chinese person benefited from the move from farmer to sweat-shop worker? Are Americans, fat with Big Macs and Whoppers really that much happier than they were 50 years ago? A micro-loan might be able to allow somebody to come out of poverty and it might do someone "good". But then again, who determines how money should be given out, and who really analyses the effect this loan will have on the community to which it is given? Not me.... The real problem, as I see it, is the very nature of what value is on this earth. Back in the day, the guy in China essentially lived the same as the guy in North Dakota. He had a family, he worked and maybe he got a few nice things for a lifetime of hard work. What happened in the early 70's was the collapse of the gold standard and the rise of fiat currencies. This allowed central banks to create money literally out of thin air. European and US banks were obviously more successful at this and thus used newly created money to buy up the labor and resources of the rest of the world. This system continues to this day and, in my mind, this equates to stealing. This is the system that needs to end! By giving aid you are actually giving back just a small part of the product your country stole in the first place. Now, getting back to loans, I feel that our money would be better served helping those of us here who are having problems. I know it's sexier to support a Masai tribal warrior start his own basket weaving shop but what wrong with trying to solve the problems in our own community? What about the homeless people on the streets of Boston? Or, cleaning up the trash in Camden, NJ? Also, I know it is maybe a little bit out there buthow about advocating for the end of fiat currencies?...Certainly this would create a more equitable economic system for everybody on earth.

Lloyd Pitcher

Lou, Thanks for your response. I'm glad that someone out there is thinking about these issues too. I agree with you on the negatives of our current global economic system and the inequalities that they perpetuate. I do realize that when I put gas in my tank some Arab is getting rich, or if I buy a pair of shoes someone in a sweat-shop had to make them....trust me, I get it. What I don't get is foreign aid. How is giving money to people in third world countries going help them? First of all, one must begin with the assumption that their situation is worse than ours. Is this the case? Has the average Chinese person benefited from the move from farmer to sweat-shop worker? Are Americans, fat with Big Macs and Whoppers really that much happier than they were 50 years ago? A micro-loan might be able to allow somebody to come out of poverty and it might do someone "good". But then again, who determines how money should be given out, and who really analyses the effect this loan will have on the community to which it is given? Not me.... The real problem, as I see it, is the very nature of what value is on this earth. Back in the day, the guy in China essentially lived the same as the guy in North Dakota. He had a family, he worked and maybe he got a few nice things for a lifetime of hard work. What happened in the early 70's was the collapse of the gold standard and the rise of fiat currencies. This allowed central banks to create money literally out of thin air. European and US banks were obviously more successful at this and thus used newly created money to buy up the labor and resources of the rest of the world. This system continues to this day and, in my mind, this equates to stealing. This is the system that needs to end! By giving aid you are actually giving back just a small part of the product your country stole in the first place. Now, getting back to loans, I feel that our money would be better served helping those of us here who are having problems. I know it's sexier to support a Masai tribal warrior start his own basket weaving shop but what wrong with trying to solve the problems in our own community? What about the homeless people on the streets of Boston? Or, cleaning up the trash in Camden, NJ? Also, I know it is maybe a little bit out there buthow about advocating for the end of fiat currencies?...Certainly this would create a more equitable economic system for everybody on earth.

Anonymous

Everything is done on a barter system in some form or fashion. money or pigs, its all the same. You trade your services for payment. the only difference is how it is supplemented. If you've ever made a purchase via amazon or ebay, you have probably furthered one or another entrepreneur's agenda. There is nothing wrong with that. Being a protectionist in a global market is the problem. Being unaware of how our {America} economy is supported via small business and entrepreneurs is a problem. We had our industrial age. Let others have theirs.

Anonymous

Everything is done on a barter system in some form or fashion. money or pigs, its all the same. You trade your services for payment. the only difference is how it is supplemented. If you've ever made a purchase via amazon or ebay, you have probably furthered one or another entrepreneur's agenda. There is nothing wrong with that. Being a protectionist in a global market is the problem. Being unaware of how our {America} economy is supported via small business and entrepreneurs is a problem. We had our industrial age. Let others have theirs.

slavemaster

“Just remember, for every action there is an equal and opposite reaction” Really? i realy don't know , but i think we must help.. 

slavemaster

“Just remember, for every action there is an equal and opposite reaction” Really? i realy don't know , but i think we must help.. 

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