Normally at OurLocality we frown on the use of triple exclamation marks, capitalisation, emoticons and childish fonts. It just isn’t grown up and it looks SPAMMY.
But this isn’t some pyramid scheme, but a simple cost of marketing lesson. Kiva – one of my favourite lending platforms – has obviously calculated that the cost of getting a new lender on its platform is more than $25, so it is using people like me to invite new lenders to the scheme.
How? By offering $25 for them to lend to whomever they wish in the hope they will lend more, once hooked (small print you cannot get this back for yourself – nice thought, but you can re-lend it again and again). The odds of you getting your money back are decidedly higher than on Betfred or similar online purveyors of misery.
They live in underbanked areas of South America. That means options for raising capital / finance are scarce. They are looking for finance to help develop their micro businesses. You can choose your criteria for lending according gender (I mainly loan to women), rurality or green criteria, whether the beneficiary is in a conflict zone or just by country and or sector.
I am amazed by how few people I have converted. Invitations go out at regular intervals. If you spent £1 less on lottery tickets a week, you could be developing entrepreneurial talent in a third world country to the tune of £50 a year, which can go a long way.
But perhaps you read the “Daily Outrage”, believe all news is fake, and feel that investment is needed closer to home. Your money will only get embezzled by greedy fat cats, corrupt officials and consultants in the developing world. Well all that sounds very much like home to me. Whatever.
Anyway, the “loanly” man, unlike Theophrastus’ unsociable man (Authadeia), also get his money back. The default and delinquency rates at Kiva are almost as low as Zopa’s, Britain’s very own peer to peer lending platform.
So even if you’re a miserable man and can loan very little, you CAN lend it again, and again and again.
Earlier this year – or was it last year? – I got an email to participate in a short survey looking at the feasibility of a microfinance setup similar to Kiva, but operating in the UK. It seemed to me the had mileage. Some months later it looks like Julian Lewis has come up with his response LendLocal. Here is what Julian has to say about his new idea:
LendLocal is a new form of social investment. It gives you the chance to make a difference to the UK’s most disadvantaged communities.
How? By making loans to people and businesses the banks can’t be bothered with – not bad businesses or dodgy people, but those who miss out because of ‘postcode lending’.
Banks aren’t keen on lending in poorer areas, no matter how good a borrower’s prospects. They’d rather just go where their computers tell them (even if that means losing lots of money, as we’ve all seen).
I’ve just lent $25 to Oyungerel. This is loan number 198, so only 2 more and I will have lent $5000 to small businesses and groups in the developing world.
Here is Oyungerel’s spiel, though those veg look a bit too perfect to be organic (no ugly vegetables is always a tell-tale sign in developing countries)!
Mrs. Oyungerel is 36 years old and lives with her husband and 3 sons in a ger in the Darhan province of Mongolia. Her husband Monhbat helps his wife with their organic vegetable retail business at a local market. Her sons Ulsbold, age 7, goes to a local primary school and Torbold, age 4, and Irmuun, age 5, go to a local kindergarten. The borrower has been running her organic vegetable retail business since 2002. She has gained a lot of experience and the customers’ trust over the years. She is now requesting 5,000,000 MNT to purchase larger amounts of organic vegetables to sell at her rental counter. She is a hardworking, active and responsible woman.
After several years of lending on Kiva – the micro finance website that helps small businesses get finance in the developing world – I am just five loans away from reaching my notional $5000 lending target.