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!
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1 comment:

  1. AnonymousOctober 4, 2007 at 11:08 AM

    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.

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