KEY POINTS:
People are constantly trying to intercept me in Wellington's Cuba Mall to sign me up as a donor to one cause or other - it's quite often Greenpeace or Amnesty International in that part of town - two very worthy causes.
Increasingly people are also coming to my door looking for donations and utility companies often ask whether I want to make a donation in the form of an extra couple of dollars on my monthly phone or electricity bill.
But I think I'm in the same boat as a lot of people when it comes to making donations to charities or good causes in general. I want to help out in some small way by contributing money but I want to see the positive effect that contribution makes.
Too often donations just disappear into a black hole and you've never any idea where it really went. A bit like that time I got drunk at a charity auction and bought a personalised number plate for $700.
Here's where the web has the power to make a difference and one area I've been looking at lately is web-based micro-financing schemes.
And one scheme that has been getting a good deal of attention lately is www.kiva.org.
There's an article about Kiva and lending in the internet age here. It is a sort of online social networking website that lists people in third-world or developing countries who are looking for loans to get their small businesses going.
According to Kiva, in these countries... "local money lenders, often the only option for poor entrepreneurs to get a loan, charge interest rates ranging from 60 per cent to 800 per cent annualised".
Kiva looks for potential lenders who can contribute money via credit card or a Paypal account, pairing them with borrowers - small business people who have profiles on Kiva, information about their country and the enterprise they are planning.
Most of them have a set loan goal in mind and you can see at any one time how close to meeting their target the borrower is. The idea is that everyone chips into on an interest-free loan and you watch the progress of the venture over the loan period - typically 6 - 12 months, via the internet. The money is repaid to your Kiva account and you can re-loan it or withdraw it.
Kiva, according to its website has US$21.5 million currently loaned. The money is given to field partners who look for suitable individuals who wish to borrow money. Those are generally people like 34 year-old Cambodian vegetable farmer Thorn Chan Thoeun, who I came across on the Kiva website earlier this week.
She was trying to raise US$1000 to kick-start her husband's motorcycle repair business. He needs an inventory of spare parts and his repair shop only brings in around US$5 a day. Kiva showed that she was US$150 short of her loan target of $1000 - 23 other people had already chipped in to the tune of US$850.
I topped up the loan with US$150 so now the total sum should be on its way to Credit MFI, the field lender in Cambodia and then out to that repair shop in Kampong Cham Province.
The field lender charges 11 per cent interest on the loan. Kiva itself operates on donations and doesn't take a cut. MFI claims to have a zero per cent loan default rate and has US$1.2 million on loan.
Through "journal" updates, which I will apparently get via email or visiting the Kiva site, I can keep tabs on the status of the loan as the money is spent.
I'll keep you posted on progress over the coming months. But I like the system so far - the transparency the web platform allows is great and I love the idea of investing in an entrepreneur's project. Check out the site, there are thousand of projects on there.
Do you know any other innovative web-based micro-financing schemes?
