Day 198 - Make a Microloan

Date: July 23rd, 2010

One of the things that I have to fight with clients a lot at work is this idea that taking charity or getting assistance is somehow a bad thing.  A lot of the people I talk to would benefit greatly from food stamps, government cash assistance, or medicaid, but they haven't applied yet because they don't want to take "hand outs".  For the most part, the people who I talk to that are taking government assistance are people who have children to feed and care for, rather than just themselves.  It is such a surprising stance for me to hear from people, having been raised to believe that a society should care for all its members.  I've been blessed not to need food stamps or government assistance, but if I qualified for the programs and needed the help, I would surely take it.  The stigma that others feel is something that I never really, well, got.

But it did get me thinking about why people don't like the idea of taking assistance from others.  On the one hand, I think a society should work to support its members.  On the other hand, I get the desire not to simply take things without returning them or contributing something directly in return.  I had the minor epiphany that loaning people things to get them started would be significantly better than giving people things to get them started.  Not because there is some compulsion to pay back, but because it fosters a different relationship.

Giving someone a loan isn't just handing that person money, it is a vote of confidence in them and what they will use the loan for.  People don't loan money out to someone they know will never pay it back, as a matter of smart business.  Now, I'm by far not the first person to have this epiphany, so it seemed better to frequent one of the services that has a good reputation than to try and find someone to loan money to myself.

I decided to go through KIVA.  It has been around the longest, has the best reputation and has the widest resources.  I found myself browsing the site for some time before settling on the project I wanted to loan money to.  I found a business in Palestine where the owner needed money to buy supplies.  In addition to the fact that it was an established business, which I liked, it was also in a part of the world that could benefit greatly from steady infrastructure and stability.  Ensuring that established business owners could keep their supplies up seemed like a particularly noble goal.

I also really like their system.  Loans are requested for a certain amount and then financed in chunks from people like me.  So the business needed $2000, but I definitely didn't loan away that much.  I loaned $50 towards that amount.  The way they have things set up allows people of relatively limited means (like myself) to help someone with even less access to money and bigger goals.  And double-plus bonus - the $50 I lent was the last $50 needed to satisfy the loan.  I felt nice to see my direct contribution to the loan's completion.  It was definitely a rewarding new thing for the day.