I have a hard enough time balancing my own checkbook. So how can I be expected to make a financial decision to help improve the life of a complete stranger? I’ve got $25 to invest in one of 1,755 small businesses around the world. Through the Kiva Foundation entrepreneurs in developing countries are eligible to receive funding to start or spur the growth of their venture. But feeling more than a bit overwhelmed by the responsibility to do some good I’m starting to understand why the world is such a fucked up place. Here I am entrusted with the power to take action and make a difference and all I can do is sit here paralyzed by indecision doing nothing.
A year ago I received a gift certificate from KEEN Footwear for $25 to invest in the Kiva Foundation. I used that money to fund Marcial Juan, a food cart vender in La Paz Bolivia. He paid back a micro loan of $750 in about 10 months. And now I have my original gift to reinvest in another business. The question, of course, is which one?
Taking up my usual workspace at a coffee shop in Madison, Wisconsin I scroll through the list of loan applications one-by-one on my laptop. I can’t help but be reminded of those guys back in the economic boom years of the 90’s who spent their days trading stocks online in their underwear. Just like a day-trader I’m scouring the list for the best opportunity to maximize my investment portfolio. But rather than looking to line my own pockets, I’m trying to find that businessperson to whom I can give my support for their success. In contrast to a commercial market investor I hope to invest in person’s dream to create a better life. I’m a day-giver.
Pick a type of investment
It’s these kinds of small investments that will help us each make a difference in the world. But rather than being intimidated by the opportunity I’m working to embrace it. To make my job it bit easier first I narrow my choices to a type of investment. I like to eat, and I was successful in supporting a food vender in the past. So I’m going to look only at food related businesses.
Pick a place
Last year I invested in South America. This time I’m going to invest in Africa. I have a personal affinity for Ethiopia, having visited there last year. But as there are no opportunities to support businesses there I’ll select the closest region, Kenya.
Now I’ve narrowed my choices to 19 small businesses, much more manageable number. From here it becomes a numbers game. Of these 19 I then rank them all in terms of how long each has been in business. As longevity is an indicator of success I’ll limit my selection to the top five.
Go with your Gut
Looking at the brief bio of each entrepreneur I’m curious to know which has the most or youngest children. I’m guessing that those who have a family likely have to the most stable home life and probably have the greatest incentive to succeed.
Work the numbers
Other considerations include the size of the loan, the purpose of the loan, the repayment terms and whether of not the barrower has successfully repaid a loan in the past. Having considered all of these factors I select Stephen Kitulu. Here’s his bio:
“Stephen is 39 years old, married to Teresia, and they are blessed with children.
He runs a green grocery and retail shop in Kikomba market. He has been doing this business for the last seventeen years and gets an income of KES 30,000 per month. He is applying for his second loan of KES 60,000 from The Kenya Agency for the Development of Enterprise and Technology or KADET LTD, which he plans to use to buy business items like flour, sugar, oil, soap and many others. He will use the extra profit to strengthen his business to wholesale. He hopes to expand his retail shop to be a wholesale distributor and also uplift his standard of living.”
With 14 months to repay his loan Stephen will have the opportunity to move his business forward while providing for his family. And though there is no guarantee that he will indeed be successful his previous track record makes him a good bet. As for me it’s a relief to have finally made a decision and I can take some small margin of comfort in the knowledge that given the opportunity to take action for the benefit of someone in need I could take the time today to give. ~ JEM
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