Wednesday, August 12, 2015

The International Bank of Bob

The International Bank of Bob explains how the microlending platform Kiva works by visiting the recipients of such lends around the world.

I find Kiva convenient for two reasons: It makes it very easy to find someone who could really use financial help and it is as transparent as it gets.

Before thinking about the details of microlending and Kiva you have to ask yourself "do I really care about the plight of others so much that I can part with my $25?" You have to give an honest "yes" before coming up with questions about how reliable/efficient Kiva is. I suspect most of such questions stem from not being that committed to helping others but being ashamed to admit it and instead formulating more rational sounding questions. After you gave that first "Yes", read this book. In the words of Bob, "Pretty much the only things we do get to choose are how we treat others and conduct ourselves in the world. Are we honest? Are we caring? That’s who we are."

Kiva team: Friends of Bob Harris

Kiva fellows blog

...anything we do gets its meaning from the reason we do it— usually, the people we do it for. The part of ourselves that we give to others in our efforts— that’s where we find our own value.

...helpless to organize due to Dubai’s lack of labor laws; imprisoned for any protest; and unable to leave because their passports had been seized— but deported the minute the employer was done with them.

...people can be bright and hard-working regardless of income or birthplace.

Any new idea— including objective, testable facts— can be rejected by the subconscious, especially if the new idea contradicts our beliefs or forces us to feel unexpected emotions. This happens instantly, before any conscious processing, even if we’re sincerely trying to keep an open mind.

...none of these people in difficult circumstances were portrayed with pity, or even as particularly poor. Instead, they were just fellow human beings, their plans for the future described with respect for their ingenuity, work ethic, and dignity.

Microfinance wouldn’t stop wars, end corruption, and create political equality, but if it could put food on the table and get the kids into school, their kids should have a much better chance with the rest. Giving the working poor better tools for planning and thinking about the future might even break a cycle of despair, regardless of financial outcome.

What might happen where ethnic tensions, poor governance, or the threat of war might make group lending difficult? And on a personal level, how does anyone even cope in the face of such severely difficult circumstances— how do people keep working, raise their kids, and hang on to hope, so something like microfinance has meaning? How does one not just go insane?

I also didn’t choose my first language, my nationality, my religion growing up, my appearance, or my own social customs. Pretty much the only things we do get to choose are how we treat others and conduct ourselves in the world. Are we honest? Are we caring? That’s who we are.

This is humbling to imagine. Symon shovels dung for a half-hour before breakfast every day. I can’t make myself go for a jog.

As I see how hard Kipkirui works for his kids, the $ 25 I chipped in toward his cow loan feels more like a privilege than a favor.

By operating at a modest and limited [capped at 7.5%] profit, Urwego [bank] can serve its customers reliably long-term with minimal risk of exploitation.

...roughly half of Kiva’s unpaid loans have resulted not from individual clients failing to repay, but from the partner MFI itself breaking down due to adverse economic developments, poor management, or some other external cause.

All this woman is asking for, after years of war, death, and repeated ruin, is to get enough flour and oil to make more than $ 30 a week? many microfinance business models are actually scalable? Plainly, many are not, at least without improvements in infrastructure. For Jinifer’s sari-sari to grow, keep hiring, acquire more physical space, and eventually become a major grocery, she would need not just dedication and intelligence, which she has in abundance, but also moderately skilled labor, a physical transportation and power infrastructure better than the one in her town, and of course financing tailored to her growth. At some point, successful poverty alleviation will often require support for small and medium enterprises, too. Microfinance, in this context, is neither the cure-all some of its more triumphalist supporters have imagined, nor the non-solution its critics prefer— but a key rung in a ladder.

The fate of the country’s poorest people— the intended recipients of microfinance— will inevitably be at the mercy of a self-interested government that shows little sign of sharing either economic or political power.

Not only are Kiva users learning more about MFIs, but to a small but very real extent, Kiva is becoming a knowledge base of best practices around the world.

It can be difficult to accept the limits on our ability to help others, and even harder to realize the limits on our wisdom, our kindness, our lives. It may be tempting just to turn away, think the worst of the world, and retreat into selfishness and fear. But when you help just one person, or let one person help you, it can be hard not to glimpse the better world so frustratingly near our grasp.

As communications improve, the fear of the Other, the notion that our fellow humans are fundamentally unlike us, is receding into the past nearly everywhere.

The good guys are assembling, fighting every nemesis that we face. Join in.

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