Two good things for the new year

Apparently Uzbekistan has just abolished the death penalty, as of January 1st by decree of Islam Karimov (who makes few good moves in his dictator-like approach to rule of his country). Now if we can get everyone else (ahem, neighbours to the South of Canada) to follow suit!

On a Central Asia-related note, I just joined a group called Kiva that allows members to make loans to small entrepreneurs and business owners in developing countries. Instead of charity, which decides how money will be applied to problems by outsiders, this is micro-credit, which puts money directly into the hands of people who decide how best they will use the funds. Loans are made to people who would not traditionally be granted loans by banks (or who would be prey to usurious money lenders, charging as much, as in the case of Tajikistan, as 86% interest on loans). Over a specified term, they make payments (to a local organization that administers the funds) and over time the loan is repayed. I can then choose to reinvest my money in other businesses or withdraw it. As these are loans, there is a small chance that there will be a default. In places like Afghanistan and Iraq, where the infrastructure has been totally destroyed, borrowers may not be able to pay money back even if they want to. However, Kiva's default rate is tiny compared to traditional loan default rates, and the most you can lose to default is $25.

The business I chose to fund is a dairy in Tajikistan. The owner, Mr. Boboev, will use the combined funds to buy a bull and another dairy cow, and to expand his line of products.

If you have any Christmas money kicking about and feel tired of shopping for yet another trinket, consider funding a loan! It's neat to see what people are up to in different parts of the world, and to sort through the different loan requests (each borrower has a page, and some put up journals throughout the loan term). As someone who has been part of a small family business for six years now, I can really understand the impact of such a loan.


Robin said...

(Happy New Year!) I'd certainly heard of microcredit but didn't know there were venues for individuals to get involved. I'm going to fwd this to everyone I know, and talk to Grace about issuing a loan of our own. (Geez, I sound like a banker... a micro-banker.)

Lisa said...

Hi Robin,

Happy New Year to you, Grace and Felix! Thanks for forwarding this around, I thought it would appeal to quite a few of our friends. Just a note: Kiva has become a very successful project, so businesses get funded fairly quickly. Sometimes there are no loan requests posted. Just check back, there should be more up within days.

I definitely was in the same boat...I'd heard about microcredit, but didn't know I could actually get involved.

Robin said...

Someone I sent it to wrote back and said that there was a story on kiva.org over the CBC on Boxing Day. Sweet.

Camille Remarkable said...

Thanks for the tip on this. I am gonna check it out. I've been heistant about giving to charity, but this looks great and empowering!

Lisa said...

Hi Camille (welcome back, eh!).

Happy to hear that the link is useful. It's an easy thing to get behind, which is why I was so happy to come across it.

'Charity' can be so problematic and bound up with colonialism (and the perpetuation of oppressive dynamics btwn the so-called 'first' and 'third' world) but that whole subject and its complexities could spawn a thousand blog posts, so I'll leave it at that for now. ;)

All in all, microcredit seems like a promising way of 'doing something' positive to make change while empowering a dynamic that respects local economies and the idea that people really are the best judges of what their needs and goals are. I don't know what it's like to be a small business owner in Tajikistan, but the person I loaned money to does. He's the expert on what will make a difference in his life. And I'm lucky to be able to facilitate that. As the recipient of small business loans for my farm, I know the value of a bit of seed money! Pun intended!

Camille Remarkable said...

Thanks again! I totally agree!

BTW, we should meet up sometime. I'd love to meet you and Jay and the notorious Iva!

Lisa said...

:) That would be great! We also have the good dr. fil as a friend in common, so we should all get together some time soon. :D

Camille Remarkable said...

The party is growing, I think a big official get together is in order. What ever happened to our invites to the Dr's housewarming? I better remind her!