Thinking of starting to do some microlending....

[cheapseats]

RED ALERT: ANY ORGANIZATION THAT IS RELATED TO GOVERNMENT!!! (in third world countries)

Or "first world" countries, eh?

Or International Elite, eh?

...Microfinancing is a multi-billion dollar global industry...

I spy Big Bankers.

"We" have been "saving" Africa my entire life.

 

[Kluge]

If you want to do some microlending, try lending some Bitcoin: https://bitcointalk.org/index.php?board=65.0

That's how Kludge started doing his thing. Steep learning curve though, unless you're very tech-savvy.

 

[rpwi]

Kiva sounds kind of interesting. I know somebody that really got into using prosper.com...and they liked it...but he did face defaults.

According to Wikipedia:

As of January 24, 2010, Prosper reported that 22.45% of all money lent since inception had been charged off and an additional 2.51% was delinquent but not yet charged off.

Eeep! If Kiva is telling the truth about their 98% repayment rate...then they sound like a much better option. Have to use paypal though ?!

 

[RabbitMan]

What the hell is wrong with some of you people? Haha, micro-lending is just a charitable way to give managed loans to people in third-world countries that want to help start a business. Whereas $50 here would buy some homeless guy a beer and junk food for a couple days, it could start a profitable business for someone in Thailand or India. Enabling a man to fish, rather than just giving it to him, as it were.

There are organizations that specialize in this, as have been mentioned, and all the OP was asking was if anyone had experience doing them before; no one is talking about flying to other countries and talking with Arab businessmen or responding to that email that lost prince of Nigeria is always sending out. This isn't a scam, but at the same time I've heard some rather disconcerting things about these micro-loan organizations. They were big news when they burst onto the scene in 2006 or so, I'm surprised most of you have no clue what he's talking about.

The good thing is these organizations facilitate the loans and make it super easy to do, the bad thing is I've heard SOMEWHERE(take this with a grain of salt, I can't remember the source) things along the lines that sometimes they take these microloans, package them and sell them again to other organizations, and something about cases where they jack up the interest and the start-ups never really have a chance to make much in the way of a profit. Whatever it was that I heard, it was disconcerting and depressing and made me much less interested in it.

HOWEVER, there is this great website called Kickstarter that specializes in something similar but its just projects people want to do from all over the world, including the US. Sometimes its just an independent videogame developer looking for start-up cash, a musician that needs funds to start his studio, but it can also be businesses looking for capital. It's the only thing I've seen where you can actually feel like a capitalist in America. And it's a lot of fun.

 

[rpwi]

Interesting article on how Kiva may not be the peer-to-peer lender it claims to be:

http://blogs.cgdev.org/open_book/2009/10/kiva-is-not-quite-what-it-seems.php

http://www.nytimes.com/2009/11/09/business/global/09kiva.html

Basically, it appears intermediary financial institutions make the loans they want, and then claim that those asking for the loan are still doing so and will be able to obtain their finances if you lend them money.

Tough to say...it still might not be a bad racket.

 

[cheapseats]

Toxic Assets + Goodwill...rack 'em up.

"Some day, and that day may never come, I will call upon you to do a service for me. But until that day, accept this justice as a gift..."

- Marlon Brando, The Godfather

 

[cheapseats]

SPLIT is a better word/narrative than FRACTURE for the logical separation of Non Republican from Republican "Liberty" Supporters, post Ron Paul. SPLINTER, I have decided, is a better word than SPLIT. Which is NOT to say "shattered into a million pieces".

In my world AND some other people's world, LIBERTY and "Reproductive Rights" are IRRECONCILABLE. That said, Holy Rollers are quite different from no-holds-barred Free Marketers. Libertine is WAY different from Libertarian.

I regret that LIBERTINES are likely to endorse Gary Johnson, but I shall paint them as FRINGE..."there's one in every crowd".

Those who imagine that restoring (or introducing) Reason & Righteousness to the governance of America will somehow coincide tidily with GETTING RICH are as delusional as people who imagine that we can spend our way out of Debt and people who imagine that we get the money out of politics by throwing lotsa money AT politics.

BEST case, they are delusional. Worse case, they are "plain" ol' Mercenaries/Profiteers. Worst case, they are WHATEVER IT TAKES people. There's no trick to getting rich if yer willing to do WHATEVER IT TAKES.

NO, there is nothing inherently wrong with or taxable about making money OR getting rich. WINNING IS EVERYTHING is incompatible with IT'S HOW YOU PLAY THE GAME. Post Ron Paul, that division will also manifest.

 

[KCIndy]

For what it's worth:

Kiva.org is legit. No banking licenses, etc are necessary.

I used to do a lot of "microlending" through the Kiva site. I haven't done so lately because virtually 100% of my discretionary funds had been going to Ron Paul and various liberty candidates.

If anyone chooses to microlend through Kiva, just keep a couple things in mind:

1. You will NOT be making any money through these loans. The idea is that you donate the money to the recipient of your choice, then Kiva.org acts as an intermediary along with a local (Kiva.org vetted) financial institution which gets the money to the recipient. As the recipient pays back the loan, the payments are refunded to you, the donor, but you don't get any interest.

2. If the recipient is unable or unwilling to repay the loan, you will NOT get your money back from Kiva.org. The risk is entirely yours, the lender. But speaking personally I think the loans I donated to were repaid in about 19 out of 20 occasions.

3. While your donations are essentially made with good will, the financial organizations through which Kiva.org works locally (say, Kenya or the Philippines or Columbia, etc) actually WILL be making money from the loan, although Kiva.org requires them to limit the maximum amount charged to something that is reasonable and competitive for the region. (That's the one thing I really DON'T like about Kiva.org - I think their intermediary local financial partners can charge up to 20% to the people who take out these loans, and I wish it the max was a lot lower.)

 

[KingNothing]

Yep, and the lefties and proponents of government generally dislike Kiva because Kiva isn't a standard charity, or government organization. Kiva works with local middle-men in the field who are driven by their own profit motive. In many cases, this leads them -the people who actually are making the loans- to charge very high interest rates for the money, because that is what the market calls for. But so what? It's what people are willing to pay.

I imagine that this sort of thing will only increase in scope. Micro-financing is still relatively new, and once more people become engaged in it, we'll break through the current paradigm and enter into something really freaking interesting ----- people helping one another, free of government involvement, potentially for their own economic self interest! THAT is sustainable "charity"

 

[KingNothing]

They were big news when they burst onto the scene in 2006 or so, I'm surprised most of you have no clue what he's talking about.

Are you really, though? I wasn't. Given the standard disposition of those who voiced concern/negativity, their words against the idea of micro-lending were not surprising.

 

[Nena]

I love Kiva! I have made 11 loans so far. They have a big "libertarian" group also.

 

[KingNothing]

Interesting article on how Kiva may not be the peer-to-peer lender it claims to be:

http://blogs.cgdev.org/open_book/2009/10/kiva-is-not-quite-what-it-seems.php

http://www.nytimes.com/2009/11/09/business/global/09kiva.html

Basically, it appears intermediary financial institutions make the loans they want, and then claim that those asking for the loan are still doing so and will be able to obtain their finances if you lend them money.

Tough to say...it still might not be a bad racket.

Keep reading up on it. It's really interesting. The founders of Kiva have had awesome, honest, open discussions with those who disagree with their business strategy.

For the most part, it boils down to this:
Kiva provides capital that is loaned out to people through field agents at high rates of interest. Many people believe that teaching others how to save money is more profitable in the long run than granted them loans. They also criticize Kiva for not being as active in the western wold as they "should" be. This all comes down to personal belief. It is my belief that providing capital to those with an entrepreneurial spirit in the third-world provides the largest bang-for-your-buck in the battle against poverty. If we can give them the capital, those best able to put it to work will do so and lift themselves and their neighbors to higher standards of living.

Now, if you don't want to engage in this activity because of the middle men, I suggest that you look into something like Modest Needs.


If you've got some extra money, put it to work helping people out. Do a little bit of searching to find the organization that you believe will have the best impact on humanity and make some donations!

 

[KingNothing]

SPLIT is a better word/narrative than FRACTURE for the logical separation of Non Republican from Republican "Liberty" Supporters, post Ron Paul. SPLINTER, I have decided, is a better word than SPLIT. Which is NOT to say "shattered into a million pieces".

In my world AND some other people's world, LIBERTY and "Reproductive Rights" are IRRECONCILABLE. That said, Holy Rollers are quite different from no-holds-barred Free Marketers. Libertine is WAY different from Libertarian.

I regret that LIBERTINES are likely to endorse Gary Johnson, but I shall paint them as FRINGE..."there's one in every crowd".

Those who imagine that restoring (or introducing) Reason & Righteousness to the governance of America will somehow coincide tidily with GETTING RICH are as delusional as people who imagine that we can spend our way out of Debt and people who imagine that we get the money out of politics by throwing lotsa money AT politics.

BEST case, they are delusional. Worse case, they are "plain" ol' Mercenaries/Profiteers. Worst case, they are WHATEVER IT TAKES people. There's no trick to getting rich if yer willing to do WHATEVER IT TAKES.

NO, there is nothing inherently wrong with or taxable about making money OR getting rich. WINNING IS EVERYTHING is incompatible with IT'S HOW YOU PLAY THE GAME. Post Ron Paul, that division will also manifest.

I can't see how this applies to the discussion at hand. Wrong thread?

 

[kathy88]

King, is it tax deductible?

 

[angelatc]

Yep, and the lefties and proponents of government generally dislike Kiva because Kiva isn't a standard charity, or government organization. Kiva works with local middle-men in the field who are driven by their own profit motive. In many cases, this leads them -the people who actually are making the loans- to charge very high interest rates for the money, because that is what the market calls for. But so what? It's what people are willing to pay.

It's a valid position. Loaning money to people in the 3rd world is a very high risk proposition. Successful high risk investments are supposed to bring high rewards - why would anybody make them otherwise?

Personally though - and I am basing this off of absolutely nothing except my gut....I smell pyramid scam.

 

[KingNothing]

King, is it tax deductible?

Kiva: Tax Deductibility. You understand that Kiva is a non-profit public benefit corporation. Kiva has received exemption with the Internal Revenue Service as an organization that qualifies as a public charity under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended from time to time. You acknowledge, however, that because you are making a Loan and not donating any money, you are not eligible to receive a tax deduction as might otherwise be available in connection with a charitable contribution to a tax-exempt public charity. You also understand that you are solely responsible for determining the proper tax treatment for any Loan you make through the Website and the Program. Kiva has not and will not provide any tax or legal advice to you in connection with any Loan you might make. This Agreement does not attempt to define the tax implications of participating in the Program. If you participate in the Program, you should consult with your own accountants, tax advisors and legal advisors.


Modest Needs: Is my donation to Modest Needs tax deductible?

If you are a donor from the United States, yes. Modest Needs is a registered 501 (c) (3) (tax exempt) organization, Federal ID #47-0863430. Any contribution that you make to Modest Needs is tax deductible to the fullest extent of the law.


Their websites cover all of this. Check them out.

 

[KingNothing]

It's a valid position. Loaning money to people in the 3rd world is a very high risk proposition. Successful high risk investments are supposed to bring high rewards - why would anybody make them otherwise?

Personally though - and I am basing this off of absolutely nothing except my gut....I smell pyramid scam.

It isn't a scam. Microlending is a legit, increasingly common, action. http://www.charitynavigator.org/index.cfm?bay=search.summary&orgid=12978

 

[rpwi]

So what are all the microlending options?

Kiva (not for profit though)
Prosper
Loanio (shut down by SEC for selling unregistered securities but maybe coming back)
Lending Club??
micrograam??

Any others?

 

[KCIndy]

It's a valid position. Loaning money to people in the 3rd world is a very high risk proposition. Successful high risk investments are supposed to bring high rewards - why would anybody make them otherwise?

Personally though - and I am basing this off of absolutely nothing except my gut....I smell pyramid scam.

I can't speak for anything but Kiva (see my earlier post) but Kiva.org's system isn't a pyramid scam because they are not promising any sort of return to the lender. In fact, they make it clear that there is not even any guarantee of getting the principal back.

I think some of the fussing in this thread may be as a result of a basic misunderstanding: Some people may be assuming the microlending under discussion is a "for-profit" endeavor. Anyone getting involved in microlending through Kiva.org and similar organizations needs to realize the only guaranteed return they're gonna get is a warm feeling for helping others. Nothing wrong with that at all... but those looking to lend for profit need to check out other groups.

 

[Nena]

I've had all of my loans repaid... it takes time but it happens. And no, it isn't 501c3 deductible unless you donate to Kiva as an organization as well. Otherwise, you're just another lender !