Microlending around the world

I've been investigating setting up a bond ladder, a structure of bonds maturing at different times so that as each bond matures the funds can be reinvested in a new bond. This spreads the risk across multiple treasury or corporate bonds.

I'm also looking into investing a small amount in certificates of deposit. Oh, and the investment in Goldcorp is doing ok.

Then, I stumbled on MicroPlace. Here is a great idea: invest in MicroPlace and they make the funds available to organizations that make tiny loans to entrepreneurs in developing nations. The interest earned on the investment is between 1.5% and 3% per year. Modest for sure, but not unlike CDs and bonds these days. Plus, you get the added bonus of knowing that you're helping spread prosperity directly around the world.

I investigated a little more in microlending. And stumbled on another site, probably more popular than MicroPlace (which is an eBay company, by the way.) That site is Kiva.

Kiva works a lot differently than MicroPlace. On Kiva, you select the person or group top which you would specifically like to lend money. In this case, though, you, as the microinvestor, earn no interest. But making money on this sort of thing, and at these levels, isn't the point.

With Kiva, you loan funds in $25 increments. In fact, in order to give everyone a chance to make a microloan, Kiva tries to keep the loans to $25 per lender. The entrepreneurs are looking for loans of anywhere from $200 to $2000. Not a lot. Kiva usually fulfills the funding for a request within eight hours of posting it.

So, after talking it over with Jocelyn, who thought it was a great idea, we signed up and made a couple of $25 loans today. Pictured above is Nodira Samieva of Tajikistan. She operates a food market in Istaravshan. She wanted a loan of $1000 (already funded today) to expand her product line. She plans on repaying the loan over the next six months.

We made another $25 loan to Ajele Justina of Nigeria as part of a $1200 loan to help her buy textiles so that she can knit clothes to sell. That loan has been funded since I started typing this message. She plans on repaying it monthly over the next 8 months.

If you've done something like this, let me know about it. Or if you invest or loan through one of the many microlending organizations out there, tell me about it.

It literally took five minutes to make this happen today. Technology can be used for some amazing things at a very small transaction cost.

It makes me happy.