Charity vs. Microfinance

4 posts / 0 new
Last post
Joined: 03/14/09
Posts: 624
Charity vs. Microfinance

Assuming your goal is to alleviate poverty, would you rather give to a charity or lend through a microfinance organisation?

(Also assuming that it is a 5-star charity and a reputable microfinance organisation like Kiva)

Rivergallery's picture
Joined: 05/23/03
Posts: 1301

"blather" wrote:

Assuming your goal is to alleviate poverty, would you rather give to a charity or lend through a microfinance organisation?

(Also assuming that it is a 5-star charity and a reputable microfinance organisation like Kiva)

Never heard of microfinance before.. however after a bit of reading I do not like the idea on the face of it.. I hate credit and loans as a matter of principle.. I do like the idea of helping people start businesses.. but someone that offers credit is earning money.. they are paying their workers and CEOS.. they are making money off the poor.. not sure I like that..

I think I would rather give to a charity.. I know many that give teaching to poor of how to run businesses.. they help set them up.. they give and do not expect a return on their "investment".. I think that is a better way.

Spacers's picture
Joined: 12/29/03
Posts: 4100

I like both and have supported both. I like that a well-run charity can pool together small amounts of money from a lot of people to make big things happen, or make small things happen for a bigger population. I also like helping just one person try to make her life a little better. I generally only support charities that have "a helping hand, not a handout" approach, in that their goal isn't just to perform an immediately necessary service, but to provide education, support, and tools to improve the lives of those they help. And that's why I like Kiva, it's not a handout, it's a helping hand.

If the goal is to eliminate poverty, then I would have to go with charity. Most of the Kiva loans are for small businesses, and someone else has to be able to afford to buy those products & services.

Joined: 03/14/09
Posts: 624

"Rivergallery" wrote:

I do like the idea of helping people start businesses.. but someone that offers credit is earning money.. they are paying their workers and CEOS.. they are making money off the poor.. not sure I like that..

Welcome to the world of socialism, RG. Hope you like it here. I do take your point and that's why it would be much better if it were governments who were involved and actually giving people chances at these kinds of loans.

Spacers, I also agree that I like that people can get together to make their small amounts of money make a big difference. That's why I still like to give to causes. Something like Planned Parenthood, where profits should not be involved in giving young girls sex education and gynecological care in developing countries.

But I am really enamoured with microfinance at the moment. Partly because it does make big differences to small communities, and reading Banker to the Poor by Mohammed Yunus made me realize that it also helps the self-esteem of people, especially women, who can become entrepreneurs without engaging the use of loan sharks.

Recently I have been using Kiva a lot more than giving to the charities I usually give to, partly because my money goes a lot further as it can be loaned and reloaned and reloaned again. It's fun. Which is a terrible reason but it's true!