@donutfever: Salad Dressing? Did I miss something special about it?
iPhone_Tyler's forum posts
@actionTACO: I appreciate your skepticism - you've got your numbers mostly accurate but I think your conclusions are incorrect. Honestly I've even seen lenders with higher "Portfolio Yields", as high as 86%, which is really crazy high but the truth is:
- Kiva lenders like me can (and do) choose which field partner we work with if we want to avoid the high interest guys. I don't think about it too much but looking through my portfolio most of the 21 I've funded are in the 19% range... Hell, that's about what my credit card interest rate is.
- These microlenders are tiny, they need to charge a lot to sustain themselves especially supporting the high default risk group that they do.
- Often these microlenders are the only available credit to these people, big banks can't stomach the risk or don't think extending to less developed places is worth their money. If I were poor and had to choose between 36% interest on a business loan with a chance of giving my children an education or no loan... I'd gladly take the loan.
Also how do these loans do anything but help women? I've loaned to over 60% women and the reports of their success have been great. You want them to get back to making babies and cooking supper? :-/
I don't claim that microlending is a silver bullet or that it even works in all places but for many working-poor it's just the chance they need to get a leg up.
Obviously, this is not an unbiased source but they have many facts right: http://www.kiva.org/about/microfinance
@Alex_Murphy: It could be a $5000 loan in total but people lend as a team, almost always $25 each. That way, no one person gets stuck with an overwhelming loss if the borrower defaults - but like I said above, they tend to default very infrequently. Also I don't think Kiva will fund a hitman. ;-)
@SexualBubblegumX: Not until it gets legalized, taxed and society can exonerate the small-time drug dealers filling our expensive, overflowing prisons.
@shua310: Great points. The awesome thing about the Kiva loans in particular is that as they get paid back you can either re-loan the money or withdrawal it. In that sense the money I put in now will get re-loaned again in 6-12 months - so that's definitely sustainable. As for the other stuff I think I can sustain it all - but you've given me good motivation to make sure I'm being realistic and the most responsible I can be.
Fair enough, I haven't done a heap of research on the Kiva loans I make, mostly because that's the point of Kiva field partners - to research the viability and sustainability of the micro-loans they refer to Kiva.org. That said, even without research I've seen the 20 or so micro loans I've funded all be repaid and the success stories thereafter have ranged from modest to impressive. Also I think you're really exaggerating with your dot-com bubble jibe - these Kiva loans are tiny, like $5000 or less, not the tens of millions that Silicon valley startups gets from VC everyday (that's why these are called micro loans).
True, Amazon has been a bit of an ass about taxes - particularly in California, but I wan't thinking of them when saying 'local businesses'. I was referring to going to neat little local restaurants and being a bit more generous than usual with tips.
@Axxol: I think you guys misunderstood me a bit. I'm spending money that I have, not credit. I'm dept free and still putting the same 25% of my monthly income into saving that I always have - now I'm just also trying reinvest and spend my liquid money in ways that I hope can keep help out.