There’s A Hole In The Bucket

September 11th, 2006 • Entrepreneurship + Startups, Reviews + Recommendations, Technology

A pocketful of change, it don’t mean a lot to me
My cup is half full, but his is empty

I’ve always considered entrepreneurship as a way to significantly impact the lives of individuals, especially those in third world countries. This is sometimes described as a “hand up” instead of a “hand out.” Others more pleasantly refer to this as “development aid” instead of “humanitarian aid.”

The multiplying effect of development aid can be impressive. In a short term view, the assistance improves the life of a single individual and possibly the lives of the entrepreneur’s direct family. With a longer view, development assistance can have a trickling effect where future generations can benefit and build on investment made today by a single entrepreneur. The children of an entrepreneur may have better access to medical services and educational opportunities thereby multiplying the effect of the initial investment.

Although my experience as an entrepreneur doesn’t achieve this level of inspiration, I have seen some amazing things happen because of Digital Envoy. For example, one employee at Digital Envoy was married to the sister of another Digital Envoy employee. They now have a child as well. This would have never occurred without Digital Envoy.

Let’s get back to the problem of development aid. When looking at how governments attack the problem of development aid, funding is doled out in very large amounts. But organizations like the Grameen Bank have shown that success doesn’t require millions of dollars to have an impact. In fact, just a few dollars can have significant impact on an individual’s life. This theory of microcredit was pioneered by Grameen Bank’s founder Muhammad Yunus.

Leveraging the Internet and the theory of microcredit, Kiva was founded to deliver money from lenders to aspiring third world entrepreneurs. Although lenders don’t receive any interest on the loan (the local disbursing organization collects the interest to use for their operations), lenders do get to determine who will get their money.

I’ve now participated in Kiva for a total investment of $100. I split this money into four $25 loans (the smallest amount allowed by Kiva). Most loans run up to about twelve months in duration although some run for less depending on the individuals situation and capacity to repay the loan (this process is managed by the local organization which facilitates and disburses the loan). The recipients of my money are: Gladiz Isabel Chacon (Honduras), Bridget Mukwandegi Thuku (Kenya), Rebecca Njeri Gichuki (Kenya), and Top Tev (Cambodia).

Sure, there is a possibility that the loans won’t be repaid. But given the circumstances of the loan, I don’t think I’ll be that upset if I’m not repaid. Disappointed sure, but not upset. Although as we currently stand, a little of my loan ($2.07) to Top Tev has already been paid back (not to me yet, the money is still with the disbursing organization until the entire loan is paid back).

Kiva keeps adding new countries as they sign up additional partner organizations. My plan is to take any money that is returned and recycle it back into additional loans. I view it as a perpetual lending cycle of goodness. Especially since another $100 in my bank account won’t do much for me but it might dramatically improve other people’s lives.

Oh one last thing, you fund your lending account on Kiva through a PayPal account. Now the interesting thing here is Kiva is the first organization to which PayPal has waived all transaction fees. This means 100% of your money goes from PayPal into your Kiva account. Kudos to PayPal for doing this!

So I urge everyone reading this blog to dash over to Kiva and use some of their money to create a pool of development aid. If you’re reading this you’re clearly in the top few percentage points of worldwide wealth (click here to find out where you rank worldwide). When people have something to live for and access to opportunities, they tend not to waste their lives on other meaningless things. You have the power to make that happen. So will you?

About The Title of This Post

The title of this post comes from a song by Spearhead. Actually, I’ve been told by my wife that the song is originally from a Sesame Street skit (totally different meaning to the song though) which I’ve tried to find to no avail (if you have a pointer to where I can get the Sesame Street version [audio or video], let me know).

Responses are currently closed, but you can trackback from your own site.