This post is kind of personal.

When I get home and check the snail mail mailbox I usually find request for donations coming from different organizations. Sometimes I decided to donate some money to some of these organizations, sometimes I simply forgot about them.

When I donate I always ask to myself where this money will really go. Most of the times you have no chance to know how your money was used and I sometimes feel suspicious about that.

November last year I joined Kiva and that was a revolution. Sort of.

Let’s have a look at what Kiva does:

Kiva lets you connect with and loan money to unique small businesses in the developing world. By choosing a business on Kiva.org, you can “sponsor a business” and help the world’s working poor make great strides towards economic independence. Throughout the course of the loan (usually 6-12 months), you can receive email journal updates from the business you’ve sponsored. As loans are repaid, you get your loan money back.

• They do this implementing a very simple process called “The Loan Cycle”:
• Lenders pick a business and make a loan using their credit card.
• Kiva transfers funds to local partners. Partners disburses loans to each business.
• Over time, partners collects repayments and provides business updates to Kiva.org.
• Funds are returned to lender. Kiva lender may withdraw or re-lend.

I found this really great for a number of reasons:

• You have the real touch. You can look at your funded business and how they progress in time.
• You can reuse the money you have given. This is one of the most important things to me. With same money you end up helping several different business in the world.
• The idea that many lenders help a single business is great.
• I know where my money is going and I may choose which projects to finance.

The minimum amount of money you can lend is 25 USD that is a small omount in rich countries. Pretty much everybody can afford that.

Why do I blog this? I have always loved the concept of Micro Financing. Kiva is one good approach to the subject when you find yourself sitting in the office.

P.S. I hope that some of you will join Kiva and will lend some money to some business in need.

P.P.S. If you want to look at my lender page, just click here.

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