Hand Out vs. Leg Up

So, just before Christmas five months ago I loaned $50 to a group of women who sew things. That’s them to the right.

They live in Cuidad del Este, Paraguay, and together they call themselves, Mujeres Virtuosas – that is, Virtuous Women.  My micro-loan was a small portion of the $3,225 they had requested to purchase fabrics, thread, needles, buttons, and other supplies as they strive day to day to give their families the basics of a worthy life without hardships.

Last month they repaid my loan in full.  That’s right; my $50 was back in my account, as was the other $3,175 into other loaners’ accounts. And 6,800 miles away in Cuidad del Este fifteen women are on a self-supporting path to a better life.

This leg up – rather than hand out – charitable giving is called micro-financing or micro-lending.  And the reason I’ve chosen to use my benevolent dollars in this way is articulately spelled out this week in a blogpost titled Teach a Man to Fish by Ellie Ann Soderstrom, whose father has a long history of aid in third world countries.  Click here for the link.

Coincidentally, Ellie posted this on Wednesday, the same day micro-finance organization Kiva published its 2011 annual report.  These are the folks I use for my loans.  And though the numbers for last year alone will blow you away, I want to give you a sense of the impact of this form of generous giving.

Consider this: since Kiva’s start in 2005 —

765,700 lenders (people like me) have loaned $314 million to 784,357 borrowers (people and groups like Mujeres Virtuosas) in 220 countries around the world. That’s an average of $394 per loan.  And 80% of these loans have been to women.

Perhaps the most impressive statistic is that 98.95% of these loans have been repaid. This is huge.  And I believe the percentage is so high because these lendees are willing to put in the time and effort “to learn how to fish.”  They recognize it’s the only way to guarantee their own success and the future success of their families.

Currently, I have four micro-loans outstanding – my small share of the bigger pie:

26-year old José lives in Los Bancos, Ecuador, and works hard selling wood and transporting raw wood products. He requested $1,200 to invest in purchasing load-bearing animals for his business, which would allow him to reduce his costs for freight and renting transportation.

Amy has a fishing business in the Philippines and requested $525 to buy a new engine for her fishing boat.  In the future, Amy would like to save enough money to expand her business.

Lilian has a business producing and selling plaster in a community located about 30 minutes outside the city of Cusco, Peru. Part of the fabrication process requires exposing the raw material to heat over a fire.  Lilian is requesting a loan for $775 in order to purchase firewood so that she can produce more plaster.

Muniran lives in Pakistan and her carpenter husband manufactures wooden baskets.  She has asked for a loan for $1,125 to buy woods, nails, and wooden polisher.

Now, I don’t pretend to know all the answers.  And what you do with your hard-earned dollars is only yours to decide.  But this one seems a bit of a no-brainer to me.  In fact, the Kiva slogan states it perfectly: Empower people around the world with a $25 loan.  25 bucks. That’s pretty much what it cost me to watch the Hunger Games movie.

Just a thought.

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4 comments on “Hand Out vs. Leg Up

  1. Mary Jane says:

    I have been involved with Kiva for a few years and heartily agree with you enthusiastic promotion of it. I am inspired to do more to promote it. It’s a brilliant idea that works! (As opposed to the brilliant ideas that don’t work. lol!)

  2. Liliane says:

    Glenn- I was so excited to see this post, albeit it very late! It’s thrilling to know our conversation on the plane last year has had far reaching effects. Keep it up and I hope to read My Brother’s Keeper if I ever get a Kindle. Thinking of you.
    Liliane

    • Well, hey there, Liliane! So great to hear from you. Yes, it’s pretty cool that our conversation has resulted in not only our helping out via Kiva, but my wife and I also gave out a dozen $25 Kiva gift cards to family for Christmas, and now through my blogpost maybe some more people will be inspired. Thanks so very much again for sharing so freely your excitement. I hope all is well with you!!

      And if you’re interested I’d love it if you follow my blog. And as for my book, you can download it at Smashwords.com to any device or even to the Kindle app on any smartphone or tablet (or even a laptop). 🙂

  3. That is AWESOME! I have heard of this program and really enjoyed reading your post about your experience! I love it – very inspiring.

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