Kealy International Development Fund

Today with the help of Kiva.org, I started the Kealy International Development Fund which is projected to be lending $500 a year around the world by 2012. Alright, it's more like "Ben from Atlanta" lending small sums of money to businesses in Afghanistan, Tanzania and other far flung places via the web. But if I lend $25 to a specific business every 3 months and roll the repayments back out into other businesses, I can be giving $500/yr in 2012 while having only put in $500 total over 5 years. And I will have helped 20-30 individual business people around the world.

It's not a scam and it's not even charity, it's called microfinance and the winner for the Nobel Peace Prize in 2006 won for his work in microfinance in founding the Grameen Bank in Bangladesh. Kiva.org provides an avenue for doing it for everyday people.

Pick the business you'd like to finance- Loan applications are pre-screened by local microfinance partner.
Choose the amount to give
You'll receive updates until the loan is due (btwn 6-18 months depending on the loan)
Once loan has been repaid in full, you are repaid.
You can then cash out or lend to another business (For more info, see below and Kiva.org).

So far they have 100% repayment rate. If that drops down to 95%, (the typical default rate on microloans is 5%), well then I'll call that the charity part.

I think this is really exciting. It's an opportunity to have a real, direct impact that builds on itself so that I'm not just giving $100/yr but rather building on previous giving. And when a shopkeeper in Kabul thinks of Americans, he'll think of "Ben from Atlanta" (and 10-20 others) who got together and lent him money to start or expand a small business to provide for his family and create jobs in his community.

But I can think of it as the Kealy International Development Fund.

Cheers,
Ben

What is microfinance?

"Microfinance is the supply of loans, savings, and other basic financial services to the poor." (CGAP)

As the financial services of microfinance usually involve small amounts of money – small loans, small savings etc. – the term "microfinance" helps to differentiate these services from those which formal banks provide.

Why are they small? Someone who doesn't have a lot of money isn't likely to want to take out a $5,000 loan, or be able to open a savings account with an opening balance of $1,000. Hence – "micro".

*"Poverty is not created by the poor. It is created by the structures of society and the policies pursued by society. Change the structure as we are doing in Bangladesh, and you will see that the poor change their own lives. Grameen's experience demonstrates that, given the support of financial capital, however small, the poor are fully capable of improving their lives." - Banker to the Poor

- Muhammad Yunus
Grameen Bank, Founder