Intercontinental Ballistic Microfinance
September 1, 2011 6:40 PM Subscribe
Cool data visualization/timelapse shows the flow of loans from kiva lenders to borrowers over 5 years
Neat video. Are there any independent studies on how well Kiva is actually accomplishing its stated goals? (Like that they are really giving them to people, those people are really using them for good things, etc?)
posted by DU at 7:04 PM on September 1, 2011
posted by DU at 7:04 PM on September 1, 2011
The average loan size is $384.39.
How Kiva Works.
posted by minimalmark at 7:05 PM on September 1, 2011
How Kiva Works.
posted by minimalmark at 7:05 PM on September 1, 2011
"Wouldn't you prefer a nice game of chess?"
posted by holdkris99 at 7:06 PM on September 1, 2011 [3 favorites]
posted by holdkris99 at 7:06 PM on September 1, 2011 [3 favorites]
Kiva was first posted on Feb. 23, 2006, which is the day I set up my account and started lending. Who knows how many times my $100 has been loaned and paid back, my account is on auto-pilot, the machines determine who and when to send out loans, as the money gets repaid it automatically goes back out to someone new.
posted by stbalbach at 7:06 PM on September 1, 2011 [1 favorite]
posted by stbalbach at 7:06 PM on September 1, 2011 [1 favorite]
I always wonder about accuracy when looking at these sorts of things, and in this case, I wonder why it seems to take about 3 months for money to get from lender to borrower. Is that actually how long it takes to navigate the required bureaucracy, or does the money arrive nearly overnight and it's been slowed down just to make the graphic look busier?
posted by tylerkaraszewski at 7:07 PM on September 1, 2011
posted by tylerkaraszewski at 7:07 PM on September 1, 2011
I'm not sure it's something to celebrate until we see new loans originating from the now-recipient locations.
I'm not sure moneylending, at however nice a set of terms, is transformative.
Kiva is interesting but critical assessment is essential. The jury is very much still deliberating.
posted by Miko at 7:18 PM on September 1, 2011 [3 favorites]
I'm not sure moneylending, at however nice a set of terms, is transformative.
Kiva is interesting but critical assessment is essential. The jury is very much still deliberating.
posted by Miko at 7:18 PM on September 1, 2011 [3 favorites]
A Mostly Comprehensive Guide to the Kiva and Donor Illusion Debate
posted by Miko at 7:21 PM on September 1, 2011 [1 favorite]
posted by Miko at 7:21 PM on September 1, 2011 [1 favorite]
"I'm not sure moneylending, at however nice a set of terms, is transformative."
If people in the developed world hadn't been able to borrow money to invest in productive activities we'd have had very little economic growth or innovation and living standards would be a fraction of what they are today. If you want to keep people mired in poverty forever then restricting their access to low cost credit is a very good way of going about it. It's better to lend someone money so he can buy a fish hook than to give him a fish.
posted by joannemullen at 7:29 PM on September 1, 2011 [2 favorites]
If people in the developed world hadn't been able to borrow money to invest in productive activities we'd have had very little economic growth or innovation and living standards would be a fraction of what they are today. If you want to keep people mired in poverty forever then restricting their access to low cost credit is a very good way of going about it. It's better to lend someone money so he can buy a fish hook than to give him a fish.
posted by joannemullen at 7:29 PM on September 1, 2011 [2 favorites]
Wasn't there an article about how, in the past, we'd just give him the fishhook?
posted by muddgirl at 7:32 PM on September 1, 2011 [1 favorite]
posted by muddgirl at 7:32 PM on September 1, 2011 [1 favorite]
Jesus, we need to bring back some basic philosophy education.
We used to think that “temperature” was a basic category of nature, but now we know it emerges from the motion of atoms.
This is entirely semantic. You could just as easily say movement "emerges" from temperature.
posted by elektrotechnicus at 7:41 PM on September 1, 2011
We used to think that “temperature” was a basic category of nature, but now we know it emerges from the motion of atoms.
This is entirely semantic. You could just as easily say movement "emerges" from temperature.
posted by elektrotechnicus at 7:41 PM on September 1, 2011
Who knows how many times my $100 has been loaned and paid back
Not sure if you meant this as hyperbole, but if you click on "My Portfolio" it will tell you.
posted by one_bean at 7:48 PM on September 1, 2011
Not sure if you meant this as hyperbole, but if you click on "My Portfolio" it will tell you.
posted by one_bean at 7:48 PM on September 1, 2011
A Mostly Comprehensive Guide to the Kiva and Donor Illusion DebateThe 'illusion' wouldn't need to exist if instead of 'making a loan' you 'bought a credit default swap' on the loan they gave out.
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I hasten to temper this criticism. What Kiva does behind the scenes is what it should do. Imagine if Kiva actually worked the way people think it does. Phong Mut approaches a MAXIMA loan officer and clears all the approval hurdles, making the case that she has a good plan for the loan, has good references, etc. The MAXIMA officer says, “I think you deserve a loan, and MAXIMA has the capital to make it. But instead of giving you one, I’m going to take your picture, write down your story, get it translated and posted on an American web site, and then we’ll see over the next month whether the Americans think you should get a loan. Check back with me from time to time.” That would be inefficient, which is to say, immorally wasteful of charitable dollars. And it would be demeaning for Phong Mut. So instead MAXIMA took her picture and story, gave her the loan, and then uploaded the information to Kiva. MAXIMA will lend the money it gets from Kiva to someone else, who may never appear on kiva.org.
posted by delmoi at 8:15 PM on September 1, 2011 [1 favorite]
Er, or rather you'd be selling a credit default swap. Or more realistically you'd be buying a securitized version of the loan (tranche of a or a bundle of loans)
posted by delmoi at 8:20 PM on September 1, 2011
I'm not sure moneylending, at however nice a set of terms, is transformative.I think it's mostly interest free, right?
posted by delmoi at 8:20 PM on September 1, 2011
Miko's right about the jury being out; even microfinance pioneers have long noted its limitations and that it "can do more harm than good for the poorest". It is good at helping those just above the poverty line, in danger of a return to poverty, but often they're missed out when it comes to targeting (don't know Kiva or its partners well enough to say if that's an issue with them).
In that sense, I'd agree that it's not transformative in and of itself; it works best as a part of a package of other measures, particularly infrastructural and in terms of state service provision; it rarely makes sense to encourage market behaviour in places isolated from the markets that will only be linked to them if more significant investment is made. It's no coincidence that China, which did the bulk of lifting out of poverty in the 20th century, achieved almost all of that through regional investment strategies.
Should perhaps add that I have worked in a rural development programme that included a microfinance element.
posted by Abiezer at 8:42 PM on September 1, 2011
In that sense, I'd agree that it's not transformative in and of itself; it works best as a part of a package of other measures, particularly infrastructural and in terms of state service provision; it rarely makes sense to encourage market behaviour in places isolated from the markets that will only be linked to them if more significant investment is made. It's no coincidence that China, which did the bulk of lifting out of poverty in the 20th century, achieved almost all of that through regional investment strategies.
Should perhaps add that I have worked in a rural development programme that included a microfinance element.
posted by Abiezer at 8:42 PM on September 1, 2011
I think it's mostly interest free, right?
They don't bear interest for the lender, but the microfinance instution 'in the field' will typically charge high interest, probably higher than you'd pay on a credit card, e.g. 36% [source: Kiva.org]. The problem is that administrative costs are high for microfinance. It isn't free to set up offices, travel to villages, do the paperwork, collect the payments, make phone calls, use the internet, wire money, etc. If you're lending money, you're still doing a good thing by reducing the cost of capital on the other end, but the borrower certainly isn't getting an interest free loan.
posted by rh at 10:08 PM on September 1, 2011
They don't bear interest for the lender, but the microfinance instution 'in the field' will typically charge high interest, probably higher than you'd pay on a credit card, e.g. 36% [source: Kiva.org]. The problem is that administrative costs are high for microfinance. It isn't free to set up offices, travel to villages, do the paperwork, collect the payments, make phone calls, use the internet, wire money, etc. If you're lending money, you're still doing a good thing by reducing the cost of capital on the other end, but the borrower certainly isn't getting an interest free loan.
posted by rh at 10:08 PM on September 1, 2011
joannemullen: If you want to keep people mired in poverty forever then restricting their access to low cost credit is a very good way of going about it.
Like rh points out it's not so much low cost credit, it's more about giving access to credit at all. I'm pretty sure I've read somewhere that most people who receive these microcredit loans wouldn't get a loan from any regular local bank.
posted by bjrn at 10:39 PM on September 1, 2011
Like rh points out it's not so much low cost credit, it's more about giving access to credit at all. I'm pretty sure I've read somewhere that most people who receive these microcredit loans wouldn't get a loan from any regular local bank.
posted by bjrn at 10:39 PM on September 1, 2011
And once again, I'm reminded that money is only a lubricant. I don't think it's access to low cost credit, it's access to very small amounts of low cost trustable credit. People need access to a large enough supply of money to allow goods of all prices (even really small prices) to be transferred between actors.
Yay Kiva though.
posted by seanyboy at 12:56 AM on September 2, 2011
Yay Kiva though.
posted by seanyboy at 12:56 AM on September 2, 2011
So if I understand this video correctly, the money takes several months to get to the recipient, and in the end the United States and Europe become richer because of the process?
posted by blue_beetle at 5:35 AM on September 2, 2011
posted by blue_beetle at 5:35 AM on September 2, 2011
Like rh points out it's not so much low cost credit, it's more about giving access to credit at all. I'm pretty sure I've read somewhere that most people who receive these microcredit loans wouldn't get a loan from any regular local bank.
Some of the analysis discusses how, in the absence of a kiva, people wouldn't be going to banks but to other financial networks. Often this is family; sometimes it's a religious organization or a private lender. It's not so much that kiva is doing something that wouldn't otherwise be done for the businesspeople - instead, it's often replacing indigenous moneylending networks, which is fine, but again, probably not doing something transformative, but simply providing a more impersonal source of cash flow. I think Abeizer's comment is important - how much can your business scale up in a small, isolated market? I think one of the saddest things about kiva is that it's a lot of effort spent on doing something that just seems to help people in areas lacking infrastructure tread water.
posted by Miko at 6:32 AM on September 2, 2011
Some of the analysis discusses how, in the absence of a kiva, people wouldn't be going to banks but to other financial networks. Often this is family; sometimes it's a religious organization or a private lender. It's not so much that kiva is doing something that wouldn't otherwise be done for the businesspeople - instead, it's often replacing indigenous moneylending networks, which is fine, but again, probably not doing something transformative, but simply providing a more impersonal source of cash flow. I think Abeizer's comment is important - how much can your business scale up in a small, isolated market? I think one of the saddest things about kiva is that it's a lot of effort spent on doing something that just seems to help people in areas lacking infrastructure tread water.
posted by Miko at 6:32 AM on September 2, 2011
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posted by Sternmeyer at 6:54 PM on September 1, 2011