Certain microlending platforms are changing the way people give gifts and donations this holiday season. Through holiday programs, these platforms let you give someone else the opportunity to lend money to someone in need, and they can use your gift to keep on lending in the future. Programs like these offer more than a unique gift idea for a friend or family member, they offer a gift to a stranger in need, as well.
The Gift That Keeps On Giving
One of the microlending platforms with a holiday program is Kiva, a non-profit organization that works with microfinance institutions on five different continents to provide loans to people without access to traditional banks. (To learn more about how Kiva works, go here.)
With Kiva’s “Give More / Self Less” program, you can buy a Kiva Card and give it as a gift. The recipient of the card uses it to loan money to the person of their choice, and make a difference in someone else’s life. When the borrower repays the loan, (Kiva has nearly a 99% repayment rate), the lender can then re-loan the money to the same person, loan to someone else, or they can withdraw the money and keep it for themselves. You can give a Kiva Card for as little as $25 or for as much as $2,000. They’re a great way to introduce your family and friends to Kiva and to microlending.
Microfinance is the practice of lending money to people with little to no income. Traditional lenders tend to stay away from lending in low-income situations to avoid risk. Microfinance not only helps less affluent people rise above their financial situation, but also offers other benefits, like helping start-ups and small businesses get access to capital. It can be hard to get a loan from a bank when you don’t have any money – microfinance provides the opportunity for growth and success to business owners with limited means.
Bennie Edgerson is the perfect example of a business owner who has benefitted from microfinancing. At Access to Capital: New York, Edgerson joined financial experts from leading financial institutions for a panel discussion on alternative vs. traditional loans. Edgerson, who owns a construction company, needed money to get better insurance so that she didn’t miss out on a construction bid she had won. Edgerson got in touch with Accion and they helped her get the funding she needed. Watch her success story below:
To learn more about alternative lending options such as microfinancing, check out these resources:
Photo Credit: JD Hancock, Flickr