Disclaimer

This blog contains some simple tips and advice from two regular guys. We're not accountants, financial advisors, or brokers, so follow, ignore, or discuss our ideas as you see fit.

Tuesday, October 2, 2007

Start your own bank (Part 2)

Posted by Matt
I recently posted about lending through Prosper.com. Today, I read a similar article on GetRichSlowly (thanks J.D.!) about the Grameen Bank, microlending, and Kiva. I hadn't heard of Kiva before and noted a few interesting differences between it and Prosper:

  1. Prosper is domestic; Kiva is for foreign lending

  2. Prosper loan requests are often for debt consolidation/relief; Kiva is focused on lending to entrepreneurs

  3. Prosper loans pay the lender interest; Kiva loans do not.
This leaves me in a bit of a quandary about where I'd put my money if I get to a point where lending makes sense for me. I'd like to "act local" (and, admittedly, earn interest), but I also feel better about lending to someone who wants to use the money to invest in their future rather than pay off past consumer debt. I'm probably over-simplifying. If there are any readers out there who have experience with either site, I'd love to hear about it.

Interesting side note: compare our early "Basic Rules of Finance" at right with the Grameen Bank's 16 decisions. It's a nice reality check and a reminder of how lucky we are in our country that I have to worry about my retirement investments and not about clean drinking water or setting up a pit latrine!

1 comment:

Mike said...

Prosper is plain old capitalism. I'm the banker to some other person's borrower and Prosper is facilitating it all. I approach Prosper as an investment.

Kiva, however, is a non-profit focused on improving the world. They're doing microloans to entrepreneurs in an effort to improve conditions in their native countries. This is interactive charitable work. I approach Kiva as (worldwide) community support. Eventually the money will poof, but it will hopefully do some good before that happens.