Wednesday, September 02, 2009

Our September Investment

One reason to live simply is that it allows you to share your resources with others. One way to do this is to lend money to people who have a small business and need some capital to expand, or to get established.

Tony and I decided last month that we will make a monthly loan through KIVA. This month we loaned $25.00 USD to Sabina Anyango Otieno who lives in Narok, Kenya. Sabina is a single woman who owns an open-air shop where she sells second-hand clothes. She has been running her business for the past 11 years.

Sabina's business is at the side of the road in the Buruburu area, enabling her to attract customers who are just passing by as well as neighbors. She wants to use her loan to buy more stock. Her "store" is basically a rough homemade frame covered with discarded plastic. With increased stock she hopes to increase her profits and hopes to be able to buy a stand to use as a temporary shop and, eventually, to get a more permanent location.

Micro-finance loans are a way to directly help individuals who are unable to qualify for loans from a bank due to the conditions of poverty in their area. The people who apply for the loans are hard-working and self-supporting. They are expected to pay back the loan, just as you and I are when we borrow money from a bank. When the loan is repaid the money will come back to us, to be reinvested in another business or withdrawn, whichever we decide.

We are able to look at the repayment schedule and also get reports of how the businessperson is doing. The loans are not interest-free but the interest on the loans is primarily used to fund business education for borrowers. They may learn how to keep books, how to keep track of stock and figure profit margins so they may make better decisions about what to carry, or what to produce or grow.

We are all connected. When Sabina's business and life improve, our lives improve. What an opportunity!

1 comment:

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