I received this e-mail last night:
This is an update on your loan to Godeffroy Edgar in Benin.
Thanks to you and 36 other Kiva Lenders, the $1,000.00 loan request in Benin has been 100% funded.
This loan will be used for the purpose of: buy 3 batches of oil and other items.
Over the 12 months of this loan, Kiva’s Field Partner in Benin, Finadev Benin, will be collecting repayments from this entrepreneur and posting progress updates on the Kiva website.
Thanks for lending to the world’s working poor on Kiva!
Good work all around. We have helped, in our small way, to help someone get a hand up on financial independence. Let’s keep the momentum going next month!
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Sorry to bring this up but: not really.
In actuality that loan was probably already given to that person, and your money is just going as part of a lump sum to the loan institution that gave it to him. Moreover, Kiva doesn’t actually get information on whether that specific person ever pays you back: they just assume he does and put the money back into your account.
The person-to-person nature of this transaction is, well “symbolic” would be a nice way of putting it. Maybe “misleading” would be another. I certainly felt mislead.
Ah, well that certainly takes the sprinkles off of my donut. Regardless, the financial institutions are doing good work, so we can at least take some comfort in that. Good to know going forward though, thanks.
Jakub, does it really matter that the $ bills you personally dedicated to that individual were not the ones he received? The fact is that microfinance is the best (for some, the ONLY) way these people can get financing. I grew up in poverty in the rural area of a developing country, and I know first-hand how important the few dollars to buy chicken feed can be to a poor family’s ability to feed themselves, and even send their kids to school. I’ll keep funding kiva loans, despite the knowledge that the individuals will likely never know I was the one that skipped my daily Starbucks to help her buy cooking oil for her roadside shop.
Cool. I wasn’t talking about the merits of microlending, I was talking about Kiva’s misleading account of how its lending works. But if you want to talk about the efficacy of microlending: Can you back up your anecdote with some evidence? From what I’ve read, the actual results of microcredit lending are questionable at best:
Still, as someone who spent a couple years regularly giving money through Kiva, I’d rather be wrong than right.
I’d never even heard of this program. Then again, I’m hardly in a position to give anything but time to any individual or cause.
Jakub, thanks for the link. I hadn’t heard of that article, nor the studies it cites. I don’t see it as all negatives, though. Some small improvement is still better than none, and I look forward to reading results of longer-term studies (most small businesses don’t show much/any profit for several years!)
I’ll continue to lend, but I take the point that the hype around microlending may be detracting from those interventions that are much more effective. With that in mind, I’ll probably be spending new money on child sponsorship, medical/health aid and agricultural development!