Finance

Microlending Lights Up the Globe

|

Microlending site Kiva.org makes it ridiculously easy for (comparatively) rich folk to loan money to (comparatively) poor folk halfway around the world who want to buy a cow or open a business. The loans are paid back on a set schedule—at an astonishingly high rate of almost 99 percent—at which point lenders can take their money and go out to dinner or plow it back into another business.

Here's a spiffy animation that tracks Kiva loans as they fly back and forth across the globe—starting with just seven tiny fireflies drifting from the Bay Area to East Africa and back again in 2005, then an explosion of light in late 2006 when the site gets national publicity from Frontline. Watch it on full screen if you can.

Call me a sap, but there's something about that intense burst of light radiating from the U.S. that makes me choke up a little every time. Hey, for some people it's Hallmark original movies, for others it's infographics depicting mutually beneficial voluntary financial exchange.

In case you're wondering how much money that horde of fireflies represents, the total comes in around $240 million in loans so far.

Reason has been covering Kiva for a good while.

Via Flowing Data.

NEXT: Bitch Fest on Bill O' Reilly

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. the wealthy [JOBZ] creators predatorily lend the boosch tax cuts to create kiva [JOBZ] in the 3d world.

  2. Niiiiiiice inforgraphic

  3. kiva.org link is broken.

  4. I would be less concerned about the lenders repaying the money than I would using fireflies to transport the loans and payments. I mean, really.

    1. You doubt Mal Reynolds?

  5. Beautiful. It strikes me as a full-motion Jackson Pollack painting. Spontaneous order from chaos! When people (continue to) ask me what libertarian solutions to our economic problems look like I will point them to this graphic. Thank you KMG.

  6. This is better than a black light poster and disco ball combined.

    I’m so digging out my Zeppelin LPs tonight and camping out in front of the laptop.

  7. My hope is that this at least gives pause to those people who like to describe the “typical American” as selfish.*

    *Non-Randian definition.

    1. IIRC, arent the microlending interest rates relatively usurous?

      Im sure some would say that the microlenders are being selfish for that reason.

      1. About 36% on a $100 loan, according to their FAQ.

        1. they also don’t loan to the individuals directly, anymore. They loan out to the loan orgs who use the profiles as bait. So your money isn’t ACTUALLY going to the people who you click on.

      2. If you look on the wikipedia for Kiva, it shows the range of interest rates for their field partners. Range from about 9% – 80%. Obviously the field partners have to eat too, and I’m betting the actual repayment rate to these field partners is much lower than 99%. If you go to the Kiva site, it shows the profit % for their partners, some of which make a little, others which lose money. The rates may suck, but if people are taking the loans, obviously they’re better than other local alternatives.

        1. Oh, I agree, Im just saying that some criticize them for the rates.

          1. The people who don’t understand the basic economic tenet of “if it isn’t a good deal, people wouldn’t be fucking using it“.

      3. still better than payday lenders, which often hit 100% or more.

  8. What??? Job creation that DOESN’T require the government??? IMPOSSIBLE!!!

  9. For fun, compare to the US gov’s Foreign Assistance.

    http://foreignassistance.gov/

    Fun fact: US will spend $12.9 million in foreign aid in China this year.

  10. Anyone notice that Japan doesn’t seem to be participating?

    1. There is a Team Japan that’s given about 300k.

      There’s also a Libertarian team that’s only given about $51k.

      1. I was just judging based on the graphic. You’d think 120 million Japanese would at least make a little light.

        OTOH, the fact that the Three Actual Libertarians managed to donate $51k is astonishing. They must be rich. I wonder if they microloaned to a mom-&-pop monocle outfit?

        1. I would so loan money to start a monocle factory, just to be able to say I did.

        2. I think there’s the language factor. Very few Japanese are good at English.

  11. looks like a trippy ICBM war as viewed from the ISS.

    1. bombing the 3rd world only?

      1. They’ll get rich rebuilding.

  12. Check out Jeff Tucker’s article on “The Micro-Credit Cult”:

    http://mises.org/freemarket_de…..ontrol=215

    1. About a heavily subsidized “faux-bank” from 1995. Not exactly relevant to kiva.com

  13. I just sent $350 to Togo. LEt’s see one of you shites top that.

    1. That’s an expensive sandwich.

  14. This has the smell of a Ponzi scheme.
    The destinations are too concentrated.
    The suckers make a loan, get repaid, and immediately re-lend, and the borrowers are in places noted for frauds and scams.

    1. Do you know what a Ponzi scheme is? Or are you just saying words?

  15. Well, I’ll let you know what happens in 13 months.

  16. Microlending …..

    Yeah, … that’s the ticket!

  17. How does Kiva compare to Prosper? Because the payoff rate on Prosper sure as HELL isn’t 99%.

  18. ridiculously easy for (comparatively) rich folk to loan money to (comparatively) poor folk halfway

    No need for the use of the word “(comparatively)” if you are on the internet you are rich….if you cannot afford it and have no prospects of being able to afford it then you are poor.

    This is of course changing…getting on the internet is getting cheaper everyday….and poor poeple are getting less poor everyday. Still i think the internet no internet test still holds.

  19. The libertarian Moorfield Storey Institute, through its Adam Smith Benevolent Fund, makes microloans through Kiva. The ASBF was set up specifically as a means by which libertarians can privatize welfare by making their own donations to worthy causes. And Kiva was chosen for the microfinancing projects. We reinvest all money that is paid back into new loans and let the fund grow.

    1. anyone who is about to make a new loan after being inspired by this should join teams like ASBF or the handful of libertarian groups on kiva.org to show solidarity for mutually beneficial voluntary financial exchange

  20. This is very good news.

    It will come in handy in the future.

    Like when we Americans need to ask for a helping hand…

    …from countries that will be better off in the long fun…

    …like Namibia.

    Hope and change…!

  21. Honestly, given the shitty performance of the markets, this might be a better place to park your money than bonds or gold.
    I think I recall that there were some micro-lending services (not Kiva) that let you collect a small percentage of interest even.

  22. This is among the most lethal of our anti-statist arsenal.

  23. I love the idea of microlending. I’m so happy to read about it again. Thank you!

Please to post comments

Comments are closed.