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In January, my mother, a gardener, lent a hundred dollars to Mrs. Arn Cheng in Phum Thmey Village, Cambodia, to buy beans seeds for her family field.
By March, Mrs Arn Cheng, a widow, repaid this loan. My mother has decided that instead of withdrawing this loan repayment , she will relend the hundred dollars to another poor person starting their own business.
At the age of 85, mom has become one of the world’s first internet micro-financeers. She joins hundreds of thousands of other ordinary people who have loaned, by computer, millions of dollars to the world’s poorest entrepreneurs. The repayment rate is over ninety seven per cent.
These loans are small, starting at twenty five dollars for fertilizer to thousands of dollars for a village co-operative. The average loan is $424.22.
The financial genius behind this internationally recognized program is Kiva which describes itself as the world’s “first person-to-person micro-lending website”. It has some big name backers including Google, Microsoft and PayPal which donates its own payment processing services.
It must be the human impulse to reach out and help. The Kiva website is busy. $100,000 is collected every twenty four hours. Since it started in October, 2005, this non-profit organization has raised and loaned out over sixty two million dollars, over three quarters of it to women.
No wonder The New York Times called it one of the top ideas of 2006.
Here’s how it works. This Christmas, my brother Tony, and his wife Gail, went on line to the Kiva website www.kiva.org, and bought a hundred dollar gift certificate for our parents. Tony used his credit card to pay through PayPal.
My mother, with a little help, went back to the Kiva website, plugged in the number on her certificate, and was asked to select a recipient for her loan. She had struggling entrepreneurs from 42 countries to choose from.
She could spend all the money on one person, or split it up into several smaller loans. We scrolled down through the photographs of the people who were requesting loans. We read the descriptions of the entrepreneur and the details of their proposed business venture and marveled at the small amount that was needed to lift a family out of poverty.
Once she had selected Mrs. Arn Cheng, my mother triggered the money transfer. Mrs. Cheng and a Kiva representative in Cambodia signed the repayment plan. In that area, the default rate on these loans is zero per cent.
Is Kiva’s idea new? Back in 1983 Nobel Peace Prize winner, Muhammad Yunus’s Grameen Bank paved the way for micro-lending to the world’s poorest enterprisers in Bangladesh. His book, "Banker to the Poor", describes this astoundingly successful aid program, founded on the belief that credit is a fundamental human right.
Amazing to think that tangible support for the world’s poorest people is just a computer screen away, and that my mother, who gardens here on Salt Spring, has had a hand in Mrs. Arn Cheng’s bean patch.
For more information about Kiva, check out Ken Evoy's