Kiva

Charity is a great idea. In theory.
I have some money, somebody else somewhere in the world could use it, therefore I help them out, I feel better, they feel better. Win-Win. Fantastic.

One slight problem in the whole affair is that normally, unless you personally know some Ethiopian families suffering from famine, Indonesians struck by the Tsunami or Haitians made homeless by the earthquake, you will have to first give your money to a charity who will then [hopefully] redistribute the money to the people you want to help.

This whole process is fraught with problems.
* How do I decide which charity to give to?
* How do I know the charity I choose will not run away with my money?
* How do I know that my charity will not spend my money on their administrative overhead?
* How does my charity choose which people to help? How do they find the people that need it most?

And all along the way, due to inefficiencies of scale, money is wasted, food goes bad, medicine goes by its best by date, crops become infertile. Really not what you want to happen with your hard earned cash.

It has been suggested many times (25 million, according to google) that charity "just doesn't work", most vehemently by the rather attractive Dambisa Moyo (author of "Dead Aid"). Citing massive corruption and other inherent problems in poorer countries as the main reason for its ineffectiveness and the reason why Africa is still not much better off than years ago. Of course this critic is largely aimed at systemic aid, not short term aid for disasters and such which is hard to fault.

But charity is so 20th century. Enter a new concept. Rather than hand food/medicine/cash over to [needy] people, how about motivating them to actually be entrepreneurial with the money?
We've all heard the mantra "Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime" many times, but screw that. Most people know how to fish already, but they don't have the requisite boat and fishing nets to actually feed themselves and maybe turn a profit.

So how about a new mantra "Give a man a small loan to buy a boat, feed himself for a lifetime, make some money, clothe & send his kids to school, repay the loan and everybody can go to the pub to celebrate"??

Credit unions have been doing this successfully for over a century, especially in Europe & Cananda, but what was needed was something even smaller scale and designed for the poor in the third world. Enter the awfully clever Muhammad Yunus stage left and his mainstreaming of the idea of microcredit (for which he won a Nobel prize). Give small loans to mini-entrepreneurs to buy stock, let them pay the sum back over a reasonable timescale and in so doing improve their creditworthiness for future loans.

Blast forward to 2010 where the internet is pervasive and financial transfers are possible without banks (Fantastic article in Wired about PayPal and the future of money) and microcredit has gone global. KIVA, being probably the most worthy example. It sports a cracking website, you feeling like you are using Amazon - you can search, filter & sort. But rather than buying toasters, you are actually looking at people who are looking for a couple of dollars to finance whatever enterprise they have chosen.

Kenyan Farmers looking to buy a new cow, Mongolian stationers looking to buy office supplies, Bolivian Taxi drivers looking to buy a new car (the old one was held together with string and rosary beads). Find someone who appeals to you by whatever criteria you chose - their country, their business, their credit record or even just their picture. Click on a button and hey presto you have just loaned them $25 (or more). The money is pooled and as soon as the desired sum is raised the entire amount is handed over by Kiva's local field officer.

Repayment is also monitored by Kiva (with regular status updates from the local field partner) and hopefully after x months you receive your money back.

As you can probably tell, I think it is the best thing since heated toilet seats, so my only question is -
What's stopping you?