Micro Loans?

[Russell]

Has anybody had the oppurtunity to do this kind of investment?

From what I gather, you loan somebody in a poor country an amount of say, $25. To them that is a large sum and would allow them to start a business and become self sufficient, they pay back the loan with interest.

Apparently the risk is quite low. I'm assuming that the interest on the loan would be quite low as well though, making it low risk, low return.

Is anyone here on ASF involved in this kind of 'investment'? Is it available to the general market?

 

[prawn_86]

www.kiva.org

i haven't found away to actually do it as a yeilding investment though, it is more of a charity donation that gets paid back so you can reloan it

 

[NewOrder]

www.kiva.org

i haven't found away to actually do it as a yeilding investment though, it is more of a charity donation that gets paid back so you can reloan it

Same. it is a charity issue not an investment opportunity. I have been contributing to Kiva for a while now and only had one default out of 30 something loans. When your loan has been repaid you can either reloan it or take your original money back.

 

[Russell]

I've just found some more information that shows the interest rates and it seems to vary considerably, even going higher then 50%. I take it then that if you 'donate' the money, you don't get the money back with interest?

Sounds like a nice charitable thing to do, but not a potential investment oppurtunity...

There goes my dream of being a microloan entrepeneaur

 

[cynic]

I've just found some more information that shows the interest rates and it seems to vary considerably, even going higher then 50%. I take it then that if you 'donate' the money, you don't get the money back with interest?

Sounds like a nice charitable thing to do, but not a potential investment oppurtunity...

There goes my dream of being a microloan entrepeneaur

Did you find out whom was getting the interest?

It sounds like someone in the world might be making a very tidy profit from this charitable facility!

 

[Russell]

I was hoping to look into it further. Just swamped at work and I don't think it will let up soon, going to look into it more this evening or tomorrow.

Someone might reply to this thread with some more info perhaps. As like you, the interest must go somewhere, why would it not go to the original lender?

 

[suhm]

I like the idea of Kiva but wanted to be able to tax deduct my contribution and don't need to capacity to get my loan capital back. Anyone have any ideas?

 

[Glen48]

Here in the Philippines the going rate is about 5% a month there are pawn brokers on every corner and more shops in the middle. Most are looking for $ 5 to 100 and will put up any thing as security BUT you can still get scammed as they are the best in the World , if you were detective looking into a murder you would talk to them and then arrest yourself they can make up stories that would convince you the pope is a liar.
However money is all cash and you can open a bank account here with little ID.

 

[Tyler Durden]

If a business can be started with $25, show me where!

 

[Smurf1976]

If a business can be started with $25, show me where!

Try any country where that's a huge sum of money sufficient to pay wages for quite some time.

Australians often forget that even $25 is a lot of money for one person to have in many parts of the world.

 

[prawn_86]

Try any country where that's a huge sum of money sufficient to pay wages for quite some time.

Australians often forget that even $25 is a lot of money for one person to have in many parts of the world.

Exactly.

It is a month (if not more) wages in a lot of third world countries. So it is the same as starting a business here in Aus with say $2500 (1 months basci wages); not easy, but doable if you have the right idea etc

 

[nioka]

From the earlier topic "Love, mercy, Uganda"
"Micro Finance Donations are a one off donation that provides a sustainable solution based on enabling the rights and abilities of communities. Rather than welfare, community members are provided a small micro finance loan from as little as $90 in order to establish their own income stream. Sewing machines, agricultural tools, seeds, and building materials can be purchased for less than $AU100 and from this initial injection of finance an entire business can grow which will then break the cycle of poverty. When a business becomes successful enough to pay back their loan, the Love Mercy Foundation will re-give it to another family on your behalf to impact a greater number of people from the same small donation."

Some time ago I donated to this Foundation. I have never heard how they are getting on or if my donation is serving any useful purpose. I hope it helped. For more information look up the topic by searching "Love Mercy Uganda" using advanced search. Am I :horse:

 

[doctorj]

Try googling peer-to-peer lending - ratesetter and fundingcircle are apparently reputable. They're not quite micro, but they can be of substantial help to SMEs. Ebay also has a microfinance site worth looking at (Microplace), though I'm not sure it's accessible from Aus.

 

[NewOrder]

If a business can be started with $25, show me where!

With Kiva you can lend as much as you like but they pool different peoples loan to get the greater amount the business person/group are seeking so no $25 is not the amount to start up a business.