Category Archives: Microfinance

Organization Profile: Kiva Microfinance

Charity Review, Microfinance,

Thank you for your patience as I have been up to my eyeballs in kitchen remodel and then traveling for Easter weekend. My part of the kitchen remodel (painting the cabinetry) is done, and it’s in the hands of the pros who will soon be installing the countertops and the new sink and faucet. I can’t wait to have it all done!

Over the years I’ve mentioned the power of microfinance in creating long-term change for people living in poverty. The lack of access to relatively small amounts of capital stunts an individual’s ability to build for the future. But I don’t just talk about microfinance; I actually participate in the process.

I currently have a portfolio of four microfinance loans through Kiva. Kiva is a four star-rated non-profit organization that connects private lenders to small borrowers around the world. With an investment of $25 or more, you can become part of a team that helps poor or underrepresented people get the capital they need to start or expand their businesses. The loans vary in amount, as do the borrowers’ projects, but the lenders always chip in at $25 per person. Kiva gives you the tools to choose your borrowers by gender, location, group or individual, and by investment type (education, agriculture, production, etc.). You can narrow down the results and then read through the borrowers’ stories until you find one with which you connect. Some loan projects even have matching funds available, so your $25 can go twice as far!

The borrowers have a repayment schedule, just like a loan from your local bank or credit union, and they pay a little interest. Kiva claims their repayment rate is 97.1%, and the individual stories come with a risk rating to help you chose your project. So far all of my loans (with the exception of the one I made just this week) have started to make repayments.

I make a new loan twice a year, at Christmas and at my birthday. My goal is to build a portfolio of loans large enough that I can continue making my bi-annual loans using only the repayment capital from the old loans. It’s really exciting to read the stories of the potential borrowers and to have the opportunity to support their dreams and a better future for their families. I currently have four loans open, and they include male, female, and group borrowers on several continents. Two of my loans helped small farmers add bee keeping to their family farms – a benefit for the environment as well as the farmers’ futures. One of my loans is right here in the US, helping a small business owner invest in her company. The fourth loan helped a group purchase raw materials for their peanut butter business (my son chose that one!).

I always evaluate a potential project by the long-term sustainability it will provide for the borrower. For example, I would pick a project that helped a farmer get equipment before I would pick a project that provided wholesale goods that would be here and gone. Not that wholesale goods is a bad investment, but I want my investment to keep on giving year after year, making it possible for the borrowers to do more for many years to come. Some of the donors like giving to loans for women in countries where women are denied access. Some donors have a heart for a particular country and make loans in those places.

Participating in a microfinance loan is a low-risk investment. If a loan goes unpaid, you just made a $25 donation – no big loss. But if it gets repaid and you continue to reinvest the money, your $25 could have a tremendous impact for generations to come.

My Hunger “Bucket List”

inspiration, Karah, Microfinance, Ministry, personal growth, Resources, Service Projects

My Hunger Bucket List

Are you familiar with the concept of a “bucket list?” The idea is just a list of things you really want to accomplish before you “kick the bucket.” Some people have a literal checklist, but most of us just have general ideas. For example, my bucket list includes visiting Paris (I studied French in high school and college), to see the Eiffel Tower and the Mona Lisa in person. Even if you’ve never heard of a bucket list, I’ll bet you’ve dreamed about things you want to do before you die.

I have a Food Shelf Friday bucket list as well – things I want to do or experience as I advocate for the world’s hungry. So today, I’m going to share those dreams with you.

  1. Meet my Compassion child: I’ve told you before about my friend Edouard, whom we sponsor through Compassion International. One of the great things about Compassion is that they can also arrange for you to meet your sponsored child if you visit his or her area. They even plan missions trips a couple times a year and take sponsors to different parts of the world to serve and meet their kids. They just went to Burkina Faso last year, and Edouard is pretty young yet, but I would really love to do this when he’s older and we have more history together.
  2. Build and maintain a revolving portfolio of microfinance loans: Microfinance is another topic I’ve covered previously. At the time when I first shared this revolutionary tool, I also made my first loan through Kiva. Loans pay back in five years, and the money can be reinvested in another loan at that time or cashed out. My plan is to make a new loan twice a year (December and April), until I have ten loans out there. At that point the first one will pay back and will fund the 11th. My investment, built during the first five years, will become a self-feeding revolving portfolio of investments. Of course, not all loans successfully pay back, but the occasional failed loan can be replaced by a new investment on my part. Now, that may sound like a lot of business mumbo jumbo, but it’s not as elaborate and complicated as it seems. Kiva does all the work for me; I just invest about $30 at a time and pick a project that I would like to fund. So far, my first two loans have been agricultural and seem to be loans that will yield long-term opportunity for the lenders.
  3. Transition my wardrobe from “fast fashion” to fair trade: Like microfinance, fair trade is a long-term, sustainable way to provide opportunity, and thus poverty and hunger relief, for people around the world. I am determined to care for my wardrobe, making things last as long as possible, and to replace things (when needed) with items that were made with fair employment practices that empower rather than imprison the workers.
  4. Continue to develop a personal reputation for serving others: When someone has a need for volunteers, I want them to think of me. Not because I want the recognition, but because I want more opportunities to love and serve. I want my life to be an offering to God, and for Him to put me to work loving and serving others the way Jesus did.
  5. Develop Food Shelf Friday’s reputation as a resource: Bloggers try really hard not to get caught up in the numbers, especially faith-based and non-profit blogs. We’re torn between wanting God to build His kingdom as He sees fit, and peeking at the stats to see if we’re doing a good job.
    It’s really not about the numbers, anyway. I would rather have a hundred people know about Food Shelf Friday if it blesses and informs their efforts and service than to have a million followers who don’t read the blog, or only come here for a laugh.
    And yet… I feel that this blog is something God has called me to do, and that the information I offer here is valuable. It does no good if I share it with an empty room, right?
    So as you can see, it’s a back-and-forth debate. In the end, I do care if people read my blog, and I work hard to build a social media following, find opportunities to write for other publications, and provide you with well-researched and interesting content. I really want Food Shelf Friday to succeed, and I want it to be a tool that you use as you make decisions about your lifestyle and plans to serve those in need. I repeat (as I often do) that I will NEVER use guilt and sad pictures to prod you into action. Your motivation should come from your own beliefs and the spirit’s convictions. Food Shelf Friday is just a tool to help you act on those convictions. You should never have cause to fear what you’ll see on this site or on my social media feeds.

 

Obviously I have a ways to go. Hopefully I’ll have many years to reach and refine, and I’m sure I’ll come up with many more dreams as well! Leave a comment with some of your bucket list dreams (personal or service-based), and/or topics you would like to see covered here on Food Shelf Friday. I welcome your feedback!

Teach a Man to Fish: Microfinance Loans

Book Review, Microfinance, Service Projects

microfinance

One of the best books I’ve read about hunger and poverty is Ronald J. Sider’s Rich Christians in an Age of Hunger. Sider takes apart the myriad roots of poverty and hunger and analyzes the solutions that various individuals, charities, and government programs employ to try and combat poverty and hunger. Sider’s top method for poverty alleviation is microfinance loans. But what is microfinance?

It’s kind of like the old saying – give a man a fish and he eats for a day; teach a man to fish and he eats for a lifetime. Charitable handouts, welfare programs, and emergency relief measures fill gaps to help people get back on their feet when they have that opportunity. For example, if a family’s chief breadwinner loses his or her job, welfare programs might help the family make ends meet until a new job is secured. If a natural disaster wipes out a family’s possessions, emergency relief programs meet their needs until the crisis is over. But for situations of chronic poverty and hunger, a short-term solution just won’t cut it.

The key to battling chronic poverty is to create jobs and economic opportunities. This is the idea behind microfinance loans. Developing world citizens who need small loans cannot get them from banks. They usually don’t have any collateral, and there may not even be banks near them. So microfinance organizations connect prospective borrowers and donors. This allows average people to invest in the lives of others, and borrowers use the little loans to do things like start or expand businesses, or buy livestock. As the borrowers succeed, they repay the loans (which have really low if any interest). It’s not a handout, it’s an opportunity for long-term success. With the loan repaid, the donor or the organization can make another loan.

I haven’t personally invested in microfinance, but I’m curious about it and have done some digging online. Charity Navigator rates microfinance organizations, so with just a little research you can find a reputable place to donate. Once you select your organization, you pick your loan recipient. You can find projects with an environmental component, look for female-owned businesses, or pick a project in a part of the world you’re drawn to. Most of the projects I saw in my brief look around were about $1000, and they broke that up to involve donors of modest amounts, like $25.

I love the idea of making an investment in an individual. It’s kind of like an adult version of sponsoring a child through Compassion International. You can pray for your people and their business, and you get to see updates of how your little investment is paying dividends in the life of an individual or family.

Stopgap programs serve an important function, but for long-term community change, the jobs and economic opportunities created by access to capital can feed a person or family for a lifetime.

Have you ever made a microfinance loan? What organization did you donate through? What was your experience like? Share in the comments!