Mi­cro­fi­nance: a new way to give

The Covington News - - OPINION -

As we rev into full gear this hol­i­day sea­son, a large num­ber of you are likely plan­ning on mak­ing some form of char­i­ta­ble con­tri­bu­tion this year.

While there are a num­ber of de­serv­ing lo­cal or­ga­ni­za­tions which are al­ways ac­cept­ing do­na­tions (FaithWorks, the Com­mu­nity Food Pantry, United Way, etc), I would like to bring to your at­ten­tion an­other wor­thy or­ga­ni­za­tion.

Kiva, an non-gov­ern­men­tal or­ga­ni­za­tion which fa­cil­i­tates the dis­burse­ment of small busi­ness loans to the work­ing poor all over the de­vel­op­ing world, is achiev­ing great things in the Third World, one small loan at a time.

On Wed­nes­day I loaned $25 to a man named Dil­shod Dad­aboev liv­ing in Ta­jik­istan through Kiva. The fa­ther of three, he has re­quested a $1,200 loan to ex­pand his house­wares busi­ness. The sole bread win­ner in his fam­ily he also raises crops and sells cat­tle to make ends meet. So far he has been loaned $150 from small-time lenders such as my­self.

My loan was dis­bursed to Dil­shod through one of Kiva’s mi­cro­fi­nance part­ners — MLF Mi­croIn­vest Ta­jik­istan. The re­pay­ment pe­riod for Dil­shod’s

Mi­cro­fi­nance is a grow­ing trend in the dis­burse­ment of funds from wealthy na­tions to cit­i­zens of

the Third World.

loan is six to twelve months. What I like about Kiva is that it pro­vides its lenders with pe­ri­odic up­dates in the form of jour­nal en­tries on how the lendee is us­ing his/her loan to bet­ter their lives. I also ap­pre­ci­ate Kiva’s em­pha­sis on trans­parency — let­ting me, the lender, know how my money is spent.

Mi­cro­fi­nance is a grow­ing trend in the dis­burse­ment of funds from wealthy na­tions to cit­i­zens of the Third World. Ac­cord­ing to the Con­sul­ta­tive Group to As­sist the Poor, mi­cro­fi­nance is the sup­ply of loans, sav­ings, pen­sions, in­sur­ance and money trans­fer ser­vices to the poor.

Mi­cro­fi­nance fills a need not met by the for­mal fi­nan­cial sec­tor which pri­mar­ily serves the mid­dle and up­per classes. Mi­cro­fi­nance loans also have a high rate of re­pay­ment. Mi­cro­fi­nance is not a hand-out; it is a hand-up.

NGOs and other non-tra­di­tional fi­nan­cial in­sti­tu­tions have blazed the trail in this area. Through their lend­ing to small time en­trepreneurs such as Dil­shod and Jane Wamwere, a 28-year-old sin­gle mother of two liv­ing in Kenya who is seek­ing a $1,100 loan through Kiva to ex­pand her pro­duce busi­ness, Kiva pro­vides a badly needed ser­vice in the de­vel­op­ing world. Par­ents like Dil­shod and Jane plan to use the pro­ceeds from their busi­ness to pay for their chil­dren’s school­ing and health­care and en­sure that they are well-fed.

While there is a sig­nif­i­cant dan­ger in over­sim­pli­fy­ing the many prob­lems plagu­ing the de­vel­op­ing world — dis­ease, in­ter­mit­tent war­fare, famine, drought, cor­rupt lead­ers, etc. — I be­lieve mi­cro­fi­nance is one of the best tools we have to bring about pos­i­tive change in the Third World by en­cour­age­ing the work­ing poor to bet­ter their lives.

To learn more or to make a loan to one of Kiva’s many small busi­ness own­ers, visit ww.kiva.org.

A num­ber of you will likely make do­na­tions to a faith-based or­ga­ni­za­tion this year. Be­fore you give, I would rec­om­mend visit­ing www.min­istrywatch. org, a Chris­tian Evan­gel­i­cal on­line data­base with pro­files on over 400 of the largest church min­istries in the U.S.

Min­istry Watch en­cour­ages “re­spon­si­ble giv­ing” by pro­vid­ing donors with a five star rat­ing sys­tem based on fi­nan­cial ef­fi­ciency and trans­parency. The or­ga­ni­za­tions also high­lights “shin­ing star” min­istries such as the Chil­dren’s Hunger Fund.

Whether you give a lot or a lit­tle this year, I en­cour­age you to give to trusted or­ga­ni­za­tions with a record of trans­parency and low over­head.

Rachel Oswald

Staff writer

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