The video shows how $25 makes it from a lender to the borrower in Cambodia. I found this via a Facebook friend’s feed. Glad I saw it, as it’s a fun way of looking at how the money makes it from one end to another.

I think it’s telling, at the end, about how the woman answers the “would you lend” question. Pity is part of the motivation for some, I think. Ultimately, I think this is about good policy. Something tells me that while the major credit markets seized up, these microfinance shops were probably affected. Hopefully, though, they were able to keep their wheels going because the money is coming from smaller donors. (it would be interesting to see how much money comes from individuals like Kiva rather than major foundations, donors, and institutions).

I also feel like I should point to some of the concerns about Kiva. The burden here falls on Kiva to help screen the MFIs (see the video) to make sure they encourage the right kind of help and training to make sure that the loans are made in a responsible way. You can find more info on this through the “concerns” link above. Be sure to read into the comments at the various sites.

Like many of you, I’m sure, I donate some money every year to a number of charities and non-profits. I want to single out Kiva.org this year and suggest that you consider lending money to businesses in third world countries via their microloan program. The 30-second explanation is that a lot of people around the world can do a lot with small loans of a few hundred dollars, especially in countries where the per capita income might only be a few hundred dollars a year. Kiva.org allows people like me to loan as little as $25, pools the lenders to a particular business, and lends to micro-lending cooperatives local to them. These are real loans that get paid back to you. It is a GREAT idea.

I’ve written about this before, but the video above contains Bill Clinton talking about Kiva. He does a good job explaining this.

So, if you’re considering donating money this year, consider loaning it via Kiva. You’ll feel good, get to read dispatches from the particular business you’re loaning to, and help create jobs in the local markets over there. Plus, the money you’ve loaned can be turned around and reloaned the next year (most of the loan terms are 12 months or less). So far, Heidi and I are starting our third cycle this year. I still love the program. You can also make a tax-deductible donation to Kiva itself, which is a traditional non-profit that runs the Kiva site.

You can see the businesses Heidi and I are lending to as well.

If you’re considering giving money to charity this year, or if you’d just like to do some good, consider lending money to entrepreneurs around the world via Kiva. I’ve written about Kiva before, and that post included a link to a Frontline piece on the organization that you can watch online.

The box to the right features the four businesses Heidi and I have decided to lend money to. It will rotate randomly through them, highlighting the current state of each loan. Consider lending whatever you feel you can. The minimum loan amount from an individual lender is $25 and currently, Kiva has a 100% repayment rate. (It truly is a loan, though neither Kiva nor you will get any profit out of it…)

The box will remain up at least until the folks featured are fully funded or otherwise withdrawn for donations. They have dozens of other candidates around the world, so if these stories don’t get your attention, perhaps some others will.

(cross-posted to Heidi’s blog)

Update: An undocumented feature… the box to the right automatically chooses other unfunded businesses if the one I specified is fully funded. I didn’t realize that. You can find the people I’ve funded by looking here.

Update 2: I’ve replaced the box that features businesses with a generic image ad because the kiva.org box was sometimes making the page slow to load. This one is fast and focuses on why we donated to them.

Kareem has written a couple of posts on Kiva, a company that offers micro-financing to entrepreneurs in third world countries. It’s the same idea that earned Grameen bank founder Mohammed Yunus the 2006 Nobel Peace Prize.

If you want to learn more, Kareem linked to this Frontline episode which you can view online. This is a great idea, and it offers a way to connect the top heavy World Bank/IMF aid/loan model (which focuses on heavy infrastructure) to the people that can use that infrastructure to lift themselves out of poverty. I hope this idea succeeds. Several Kiva loans will be part of my end-of-year charity donations.