Your Olive Branch
August 4, 2010
Last fall, I became familiar with microlending after reading a post by my blog-sistah, Consciously Frugal.
I was intrigued by the idea that for as little as $20, I could help someone and get paid back with interest. Understand, microloans are not charity; they are investments. I believe strongly in giving a hand up, not a hand out. I also believe strongly that most people want to work. My experience with microloans has indeed solidified that belief.
Currently, according to Bankrate.com, the highest interest rates available on a one-year certificate of deposit are around 1-1.5%, and usually the higher rates also require a very high deposit. Conversely, for a $20 investment, you can loan money directly to an entrepreneur in a developing country or someone right in your own nation. With the recent banking crisis, many small businesses in the United States are having difficulty getting a loan. Microlending is becoming a viable solution. Microlending also pays up to 3% interest, which beats the banks. I consider it a wise investment not just socially, but also economically.
I started small, investing $20 last fall. That was all, because I was curious how it would work, I was unfamiliar with it, and I don't like to jump in too deep with new behavior. I'm cautious. I got my first loan dividend early this summer for 16 cents.
Not a lot, but neither did I invest much. I have since decided that whenever I get a freelance job (my income is sporadic) I will invest it in microloans. So far I'm helping people in Texas, Ecuador, and Nicaragua. I've only worked through Microplace (a subsidiary of Paypal), but Kiva is another microloan institution, asking for a minimum investment is $25.
I started at Microplace because they have "buy one, give one" specials for new subscribers. It's like giving someone a stock certificate worth twice as much.
I could spend hours talking about this fabulous investment. Instead I'm challenging you to make a difference for $20 or more. Go do some research and find someone you can help or find a cause you support. Spend $20 and wait for the interest. Believe me, you'll get much more than 16 cents of joy.