145 - My money don't jiggle jiggle, it folds 💰🤝🏻🌍
a.k.a. The Kiva Experiment
Hey there, !
I read a book a while ago called 'A World of Three Zeroes' by Muhammad Yunus (a Nobel Peace Prize winner) who wrote about a vision of the world influenced by experiments that he had done in his life.
He wanted the world to achieve 'The Three Zeroes': zero poverty, zero unemployment, and zero net carbon emissions.
To be honest, there was a lot of fluff in it (he was explaining a bunch of the different research he had done), but there were a few really interesting things about microfinance and credit that I hadn't learnt about in the past.
As part of his recommendations of what can you do to actually help the world was an effective altruism-type of recommendation I found particularly interesting - Kiva.
Kiva is an international non-profit that serves as a lender to developing nations by crowdfunding loans to different people across the world across a variety of categories (including agriculture, education, arts, general stores, or short personal loans).
Surprisingly, there's a 96.4% repayment rate from these lendees, who are often people that need a quick injection of money to get themselves going. You help them buy what they need, and they keep the profit to set up a self-sustaining business.
When they repay you, the credit can be reinvested with other lendees, helping keep the flywheel going and having charitable donations go further than just the payment you give once. There's an option to withdraw your money from the platform too, if you so choose.
I thought it was a pretty good idea, so I experimented with it! I didn't put in that much (about $100 or so I can't remember exactly - and was matched for a couple of loans by Kiva themselves), but went out to choose some people to lend to, get some repayments and reinvest - and it's been a bit since I did this (my first loans were in September 2021) so let's see what's happened with the experiment!
Here are the results:
Loan portfolio
| Name | Country | Purpose | Loan | Term | Repaid? |
|---|---|---|---|---|---|
| Obejas De Dios Group | Nicaragua | This loan helped a member to stock her street vendor business with clothing and footwear. | $25 | 10 months | Yes |
| Ketokakala | Tonga | This loan helped a member purchase pandanus for her weaving and also help with the finishing touch of her new house. | $25 | 14 months | Yes |
| Dios Es Bueno Group | Guatemala | This loan helped a member to buy cloth, as well as potatoes and cooking ingredients. | $25 | 10 months | Yes |
| Lehar Group | Senegal | This loan helped a member to buy food products to prepare juice that she resold. | $25 | 8 months | Yes |
| Innocent | Rwanda | This loan helped to purchase more spare parts for Innocent's business. | $25 | 8 months | No |
| Andrea Yomaira | Ecuador | This loan helped to purchase midsized pigs, breeding pigs, wood, potatoes, and balanced feed. | $50 (my first re-deposit) | 20 months | No |
Donation stats
| My stats | |
|---|---|
| Amount lent | $175 |
| Amount repaid | $98.10 |
| Amount lost | $1.90 |
| Amount refunded | $0.00 |
| Delinquency rate | 0.00% |
| Amount in arrears | $0.00 |
| Outstanding loans | $75.00 |
| Default rate | 0.00% |
| Amount defaulted | $0.00 |
| Amount ended | $100.00 |
| Currency loss rate | 1.09% |
| Amount of currency loss | $1.90 |
| Currency loss reimbursed | $0.00 |
Other notes:
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6 loans, 6 countries, 5 sectors (Arts, Clothing, Food, Retail and Agriculture)
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83.33% to women, 16.67% to men
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The currency loss rate is the amount that is lost due to the difference of the dollar conversion when the money was lent vs. when it was repaid.
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Some of the money is also donated to Kiva so that they can keep their operations running - which is how donations may 'decay' over time.
Reflections:
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This felt a lot like a crowdfunding project that I sign up for with boardgames - you put in the money, and then you just don't think about it for a while until an email comes back saying 'hey your investment got paid back! time to reinvest it'. It latches on to the feeling you have of 'yeah I'll help someone' and then you can #feelgood in that moment and move on
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It feels...responsible? Like, I'm not just donating money, I'm...'investing' in people and their businesses. I might not know the minutiae of how they're going to use the money, but now that they have it, they can use that in better ways than I can (i.e. buying shit I don't need). In addition, a lot of these pages are 'groups' that have banded together to crowdfund for multiple members - a kind of social proof that they'll pay back the money.
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The exploration of different projects is slightly dehumanising, yet also eye-opening. Like...there are so many people who need help, and I'm on the other end weighing up how much I want to give them based on what they've written / pictures / descriptions when it's their entire life. It's a very weird feeling, but also humbling that $25 can be so helpful to someone on the other side of the world, whereas for me it could be like...brunch. The whiplash of privilege.
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I helped buy some pigs! How crazy is that. I didn't even know there were difference in 'medium' and 'breeding' pigs...!
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Selfishly, I like thinking about money as something you can use to unlock another person's potential, and I do get a feeling of 'doing good' when I see it helping someone get off their feet. 'Money doesn't bring you happiness' - sure - but there are so many problems on an individual level that could literally be solved by money.
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Looking at the impact made with the money has been very interesting - and I'm actually kinda excited to keep this going because the same $100 or so is just going on and on and on! I think it's been a worthy experiment, and I might put some more in and see how that goes.
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Link here for referral to Kiva! - I don't know if it does anything really, but it'll be nice to be friends?
Chat soon :)
Let me know if you have any feedback for the newsletter!
✔️Real Life Recommendations
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Top Gun: Maverick - I told you last week I was gonna watch this, and now I have. An absolutely FANTASTIC blockbuster, and sequel to Top Gun. They really did justice to what was so great about Top Gun (fast planes, witty banter, exciting conflict and Maverick), and then dived deeper on the characters and their stories. What I appreciated was how clearly each conflict was set up - you know exactly what they need to do, it's very clear whether they have achieved it or failed, and then how they got there. Also, if you're gonna go to the toilet during the movie do it early - the last act is pure adrenaline! Highly recommended - as they say, you'll pay for your whole seat but only use the edge.
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Last Night in Soho - directed by Edgar Wright - found on Disney+. It's a good'un. Wright has a penchant for using a lot of music from the 60's and 70's in his films (like Baby Driver!) and this one is no slouch. Absolutely loved the vibe of the 60's and 70's scenes, the costumes, the atmosphere, and the interweaving of the past and present - just fantastic. A few predictable bits in it, but I loved the way the story unfolded regardless. Highly recommended.
🚌 Adventures on the Information Super-Highway
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Friendships form via shared context, not shared activities - an interesting piece on how friendships form. They're part of your network, and not just by the fact that they're somebody with particular attributes - over time, they're slowly woven into the fabric of your life.
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How Ice Cream became the Ultimate American Comfort Food - it was delicious. Also it was scarce and impractical to make early on, Hoover made it an 'essential foodstuff' for soldiers, and it became extremely popular as a source of comfort, motivation and morale for citizens and soldiers alike. Food is cool (hehehe...).
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J.R.R. Tolkien's Little-Known Original Drawings for the First Edition of The Hobbit - extremely cute li'l drawings!