Slate recently reviewed various types of micro-lending organizations. As Brady previously posted, micro-lending has a very low default rate, in Grameen Bank’s case in particular as low as 2% (compared to 4.5% default on the first two years of student loan repayment). As consumer consciousness becomes more aware of social return, through such ideas as triple bottom lines and Fair Trade, it is not surprising that micro-financing also finds popularity and support. Micro-financing fills a niche in providing very low loans to the asset-less poor, a concept not considered viable by standard banking institutions.

Jude Stewart’s reviews are based on a rating system which considers user experience, trust, and effectiveness and includes details about each. There is a selection ranging from general donations to organizations which then determine how the funds are distributed, to groups which allow direct lender / recipient relations. The common factor through each is the low dollar amount, both in what is being requested for the loan and required minimum donations (generally $5 - $25).
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Kiva, a Swahili word meaning “agreement” or “unity”, is an amazing microfinance website that allows you to lend directly to people in need. As Brady posted previously, microfinancing is the loaning of small amounts of money to the asset-less poor. Matthew and Jessica Flannery, the founders of Kiva knew that while ” there were many microfinance institutions lending money to the working poor all over the world, none of them allowed average-income individuals to lend smaller amounts of money to someone else.” The lending minimum is only $25, and you are able to choose the exact person and business you wish your loan to benefit. As to repayment,

The chances of being fully repaid are pretty high. Here are some statistics:

* So far, Kiva has experienced a 100% repayment rate on all businesses with completed loan terms.
* Prior to Kiva, our Field Partners have historically experienced a >96% repayment rate with the poor they serve.
* In the past 30 years, over 100 million of the world’s poor have received a micro-loan and demonstrated a >95% repayment rate.

There are lists of the people, their business, their country and how they will use the money. 100% of the loan amount goes to the entrepreneur, Kiva is sponsored only through additional donations. You are able to view the amount already contributed until the total is reached, after which periodic journals are sent detailing the entrepreneurs progress. Once the loan is fully repaid, typically within 6-12 months, you may withdrawal the funds or reinvest. Kiva works with field partners in different countries who are in the communities working with the entrepreneurs to ensure success. Read more…