yeah the key point is 'reasonable terms' - and that would depend on the interest rate - no?

So the key question in how ethical this would be is to find out how much interest Kiva's partners - the microfinance institutions - charge. The FAQ's suggest this information isn't available yet.

isn't it always like that? seems that everyone wants you to front them cash for their hairbrained schemes but the one or two who actually have a credible business plan are forced to wait in line with all the wackos.. oh well, that's the way the papadam crumbles

ps: Abhi, you is wicked mad as Jules. No one would expect such a candid smile from the man sent to kill you, "WHAT does Marsellus Wallace LOOK like?!"

Abhi with an afro haunts my nightmares! C:)

Just like "hafta-vasooli" from the local bhai in Bollywood movies.

Sub Rosa Mutineer Robin Sloan has talked about Kiva before--the alum (via internship) of Grameen Bank guessed some of its success is due to good local liasions, made a loan to merchant in Tanzania, and talked about the portfolio display feature (which should provide some gratification to fantasy moguls like Abhi) and linked to the founder's blog.

Here's an old BBC article about Kiva which quotes my friend Ethan Zuckerman, an expert on using technology to promote development. Some peer-to-peer variations on the microfinance theme: the more general Zopa, and prosper.com. Of course, the most famous one is Grameen whose founder was featured as one of the "50 who Matter Now" on a, um, cough, cough, fun little business magazine recently. :-)
f.

yeah the key point is 'reasonable terms' - and that would depend on the interest rate - no?

I don't know what the interest rates are, I assume they fluctuate w/ the market, but I do know that the repayment rate for microloans in India and Bangladesh is around 95% (which is higher than regular commercial lending) and that should tell you everything you need to know, if you're worried about predatory lending.

Don't worry about the ethics. Do it for the money. Lenders and Borrowers are making money together, it's not a zero sum game. And by concentrating on ethics you’re missing the whole point. Your clients are not charity cases, they are people empowered enough to make their own decisions.

Of course there's also a human level to this, as Billionaire VC Vinod Khosla puts it:

More importantly, if you go there and talk to these people they're empowered. Most of the lending is to women, well in excess of 98 percent in this case, and what was surprising to me when I was there is I could look at a women who had borrowed and tell you how long she had been borrowing for, because anyone who had been borrowing for more than three years looked me straight in the face, eye-to-eye. People who were first-time borrowers were always looking down, their head covered with a sari, they were not empowered. But a few years of this of this not only changed their financial status, but also changed their mental attitude. To those of you who have lived here in the Valley, entrepreneurship is all about self-confidence. I have no doubt in my mind that this will have all kinds of other consequences. What was shocking was that almost all their children were going to school and that was their highest priority. Many of them, even though they didn't have food, were taking income to get private tutors because the government schools weren't good enough. But this can be done at a larger scale; it's not just 100,000 to 300,000 to a million. Professor Yunus, shown here [shows slide], had the bank with three and a half million borrowers, a total of a little more then 4 million dollars lent over the course of the history of the bank. Much more importantly, studies prove that 120,000 Grameen Bank families overcome poverty each year. Now that's powerful.

So there is interest paid as well? I think this would increase my interest because my amount loaned would increase with each successful loan. Also, I used to work for ACCION and the interest rates are fairly high. But, the collections process is extremely forgiving and fair. Often the loans are extended or credits are given to make the payments easier.

So there is interest paid as well?

Yes and No. My post 7 is incorrect. The microlender (bank) charges interest to the borrower (entrepreneur)but this is not passed on to you, the kiva lender. I guess kiva itself is a non-profit, although the mico lenders themselves are not, so do it out of charity. A bit ironic.

Thanks for the that info, Saheli.

Re: Saheli

The founder's (Matt Flannery) blog has been updated from http://kivachronicles.blogspot.com/ to http://www.socialedge.org/blogs/kiva-chronicles

Take care