Microfinance: A Better Way for Students to Give
October 10, 2016
Fall is a beautiful season. The leaves change. The temperature falls. And, if you're walking downtown in any major Canadian city, you can look forward to the cheerful individuals with red vests and clipboards disappearing from the streets soon. You know these people. The Humane Society, Because I Am A Girl, the Red Cross. Forced smiles and people going to absurd lengths to sidestep their piercing "hello, bonjour!"
They're doing great and necessary work, of course. But, as a young person with a limited budget, student loan debt, and all the uncertainty of setting out in a huge, unstable world, I could never quite give in any significant way. That's something for older, more established people to do. I did start a monthly donation to one organization, but with a great deal of reluctance. I mean, your money may be what saves a life, but it could also go towards advertisements, new vests, or administration. And always, in the background, always that worry about student loan debt, about not getting a job, about needing that money for textbooks or food. Many other students are in a similar situation.
There is a solution to this problem. Microfinancing platform Kiva allows anyone to provide capital to a loan partner in the developing world. You can lend money to entrepreneurs for terms ranging from just months to several years, interest free, potentially carrying only the currency exchange loss. When you get paid back, you can either divest yourself, or make another loan. Most partners have default rates of less than 5%, so it's generally a very safe bet. Kiva posts a great deal of documentation on its loaning opportunities, to ensure clear communication with lenders. Agricultural collectives, service businesses, retail stores and others all use Kiva to organize their financing.
This is great for students, in my opinion. If you can spare a bit of capital now, you can help small business owners in the developing world for a bit, and get most if not all of the money back when it comes time to pay student loans or that next round of tuition. It's also a great way to connect with the global south, with Kiva encouraging connections with their partners in the non-profit community over social media and through their Fellow program. You can also join a lending community on the site, with some of the biggest being constituted of Christians, atheists, Hewlett-Packard employees, and Nerdfighters. (Followers of John and Hank Green's YouTube channel). There's something for everyone.
I would suggest giving Kiva or another microfinance platform like Alterna's program or Opportunity.org a try, if you've been uncomfortable insofar giving to standard charities. It's a great way to get involved, and feel a bit less guilty diving into traffic to avoid the next brightly-vested individual you run into on the sidewalk.
(Full disclosure: I volunteer as a social media analyst for the Nerdfighter group on Kiva. This is in no way a paid endorsement. I am just a fan of market-based solutions to development problems in the global south.)