Dominica, a guinea-pig breeder whom I lent money to.

 

Kiva is a micro-lending organization which you can join online.  You lend to 3rd-world entrepreneurs in multiples of $25., via PayPal.   You get to browse through pictures and descriptions of various folks around the world who need a loan to help their small business expand.  They’ve already been vetted by a local lending organization in their neighborhood, which works together with Kiva.  Loans are paid back in anywhere from 3 to 18 months.  (Each loan requester states how long they will need the money.)  You will not earn interest on your money, and neither will Kiva.  The loan recipient pays a reasonable amount of interest back to her local lending organization.

The woman in this photo is one of the folks that I lent $25 to this year.  She was requesting money to buy feed and supplies for her guinea pig business.  (And yes, since she lives in Peru, she’s not raising them to be pets…  Just think of them as very small cows.)

Take some risks in your investments for a good cause.

The Kiva default rate (loans not getting paid back) is currently under 1.5 %.    So, if you lend $500, you’re statistically likely to lose $7.50.  When I chose people to lend to, I decided to lend only to women because micro-lending statistics indicate that women are better risks.  And, I only lent $25 to each person.  So, if one person defaulted entirely, I’d only lose $25.  (So far, this hasn’t happened to me.) You can consider the small amount which you might lose, and the lack of interest on your investment, as just being your donations to people whose circumstances turned out much worse than they planned. 

Savings that you can’t get to.

For my husband and me, Kiva had the advantage of keeping money out of our reach.  When you don’t have a lot, it’s hard to maintain a regular savings account without plundering it.  If your money is in Kiva, you can’t get your hands on it until the loan is completely paid off.  Then the loan amount is put back into your Kiva account, and you can cash out and empty it all into PayPal.  Or, you can re-lend it.  When I pay bills, I just shuffle $25 or so into Kiva loans, and it’s safely gone for a few months.