Jump to content


Photo

Kiva Loans


  • Please log in to reply
19 replies to this topic

#1 Michael John Smith

Michael John Smith

    Advanced Member

  • Members
  • PipPipPip
  • 167 posts

Posted 19 September 2008 - 03:32 PM

Just got this fantastic opportunity handed to me. Haven't finished reading up on it yet but I just have to share it with you straight away. What a business idea!
http://www.kiva.org/about

#2 Simona

Simona

    Advanced Member

  • Members
  • PipPipPip
  • 458 posts

Posted 20 September 2008 - 08:44 AM

Hi, Michael

did you check the interest rates, if they are any higher than those in the commercial banks? As well, I cannot agree the banks don`t help the poor people, there is the World Bank with its five institutions and help for less-developed economies and loans for the poor people http://www.worldbank.org/
When dealing with the bank, there is a direct relation between the one who lends and the one who takes, here it seems there is a middleman - microfinance partner, because if I understand correctly one does not establish direct relation to loan giver - enterpreneur? For my feeling, as soon as there is a middleman, in the principle, that raises the costs, which are in-calculated in the product and placed on the shoulder of the final consumer...

Simona

#3 Michael John Smith

Michael John Smith

    Advanced Member

  • Members
  • PipPipPip
  • 167 posts

Posted 20 September 2008 - 10:19 AM

Thanks. But the particular microbanks involved are stated. Generally poor people are not deemed sufficiently creditworthy to get a loan from any other source. Yes, I agree, interest rates could be quite high in these circumstances but many of these microbanks are supported by reputable NGOs such as Save the Children and as such I trust them to charge their clients less than the marketplace moneylender. Personally I am very attracted by the idea of participating in the microbanking business in this way. Normally one shold be cautious about encouraging people to get into debt and perhaps encourage their greed and attachmnt through them joining the world of business but one can get an idea as to the reasons behind taking out a loan. The notion of freedom cannot remain in the domain of the dominant and those with more personal property. It must be extended to everyone. In freedom there are limitless possibilities for doing harm or good but without freedom - well just look at the situation in Tibet. I think the Dharma is right to ally itself to freedom and democracy - freechoice in our societies, equal opportunity, etc.
But beyond this I must give where I can. I must offer people shelter from the storm, water to quench their thirst, food for the hungry, etc., even if it means these same people will be paying some form of interest, etc.

#4 Simona

Simona

    Advanced Member

  • Members
  • PipPipPip
  • 458 posts

Posted 20 September 2008 - 12:59 PM

"Why Do MFIs Charge High Interest Rates?

Over the past two decades, institutions that make microloans to low-income borrowers in developing and transition economies have focused increasingly on making their operations financially sustainable by charging interest rates that are high enough to cover all their costs. They argue that this policy will best insure the permanence and expansion of the services they provide. Sustainable (i.e., profitable) microfinance providers can continue to serve their clients without needing ongoing infusions of subsidies, and can fund exponential growth of services for new clients by tapping commercial sources such as deposits from the public.

The problem is that the administrative costs are inevitably higher for tiny microlending than for normal bank lending. Lending out a million* dollars in 100,000 loans of $100 each will obviously require a lot more in staff salaries than making a single loan for the total amount. As a result, interest rates in sustainable microfinance institutions (MFIs) are substantially higher than the rates charged on normal bank loans.

There are three kinds of costs the MFI has to cover when it makes microloans. The first two, the cost of the money that it lends and the cost of loan defaults, are proportional to the amount lent. For instance, if the cost paid by the MFI for the money it lends is 10 percent, and it experiences defaults of 1 percent of the amount lent, then these two costs will total $11 for a loan of $100, and $55 for a loan of $500. An interest rate of 11percent of the loan amount thus covers both these costs for either loan.

The third type of cost, transaction costs, is not proportional to the amount lent. The transaction cost of the $500 loan is not much different from the transaction cost of the $100 loan. Both loans require roughly the same amount of staff time for meeting with the borrower to appraise the loan, processing the loan disbursement and repayments, and follow-up monitoring. Suppose that the transaction cost is $25 per loan and that the loans are for one year. To break even on the $500 loan, the MFI would need to collect interest of $50 + 5 + $25 = $80, which represents an annual interest rate of 16 percent. To break even on the $100 loan, the MFI would need to collect interest of $10 + 1 + $25 = $36, which is an interest rate of 36 percent.

MFIs have to charge rates that are higher than normal banking rates to cover their costs and keep the service available. But even these rates are far below what poor people routinely pay to village money-lenders and other informal sources, whose percentage interest rates routinely rise into the hundreds and even the thousands.

This does not mean that all high interest charges by MFIs are justifiable. Sometimes MFIs are not aggressive enough in containing transaction costs. The result is that they pass on unnecessarily high transaction costs to their borrowers. Sustainability should be pursued by cutting costs as much as possible, not just by raising interest rates to whatever the market will bear.

Interest rates, while still too high in some places, are dropping on average 2.3 percent a year. The microfinance industry has placed a lot of emphasis on improving efficiency in order to bring down these costs, so that poor clients are not paying unnecessarily high rates. New technology also offers to help reduce costs, so we expect rates to continue dropping as institutions become increasingly efficient at delivering services to poor people."


Source: http://www.cgap.org/...te.rc/1.26.1309

* 100$ x 100,000 is not a million, but I will leave it as it is originally written in the source.

#5 Michael John Smith

Michael John Smith

    Advanced Member

  • Members
  • PipPipPip
  • 167 posts

Posted 20 September 2008 - 01:59 PM

Thank you simona but your quote is just one article from CGAP. The organisation you are quoting is itself quoted frequently on the Kiva site. Of course there are pluses and minuses to everything but this is still an exciting opportunity for me. I would recommend looking into microfinance if you have any doubts about it's effectivenes. Anyway, I have already made a loan to a woman in Africa running a pharmacy business. I intend to make a further loan once repayments start coming in. There are other Buddhists also making loans through Kiva, though I was given this opportunity by a friend from Israel on ipeace.
Indeed there are opportunities for practicing compassion a plenty in the network to be officially launched tomorrow, International Peace Day http://ipeace.ning.com
Lots of Buddhists among the 4,000 members so far from 150 countries talking peace. Only one Slovene so far, though they are coming in from other ex-YU countries.

#6 Simona

Simona

    Advanced Member

  • Members
  • PipPipPip
  • 458 posts

Posted 20 September 2008 - 03:41 PM

I think there are many ways to be helpful, but I wish to be helpful in the best way possible, which for me is helping the others to get into the contact with the Dharma and support the Teacher and the Dharma Center in order that He helps as much as sentient beings as possible, leads them on the Path towards Enlightenment.
Also, it is a question of Ethics, to charge interests at all, to the people, who are in need and poor.

#7 Michael John Smith

Michael John Smith

    Advanced Member

  • Members
  • PipPipPip
  • 167 posts

Posted 20 September 2008 - 04:41 PM

Unfortunately Rinpoche will have his work cut out unless his students can find loving kindness. The teachings you will attend will not be heard. It is indeed noble to support the Dharma financially but only a few will actually benfit from your group unless its members change their ways. The correct response by you is to support my offering of such an opportunity, not to criticise it offhand. Of course the Dharma must come first with you but some of us in the comfortable west have more than sufficient funds to support the Dharma AND those misfortunates who have no access to it.
With respect but growing impatience at the intolerance, lack of charity and arrogance shown by many noble members of the Dharmaling Congregation.
Sorry Rinpoche.

#8 Simona

Simona

    Advanced Member

  • Members
  • PipPipPip
  • 458 posts

Posted 20 September 2008 - 05:51 PM

With respect but growing impatience at the intolerance, lack of charity and arrogance shown by many noble members of the Dharmaling Congregation.
Sorry Rinpoche.

Sorry you, Michael. If you have something against my opinion that I do not support charging the interests then stay focused on that and come with reasonable arguments. Do not go into personal, please and do not exaggerate and exceed on Ven. Lama Shenphen Rinpoche and on the whole Dharmaling Congregation and write such as "many noble members...".
In the case, I am the one arrogant, lack of charity and so on, because I didn`t reply in the way you expected.
You have your opinion, I have mine, I don`t charge you anything, I don`t charge you being arrogant because you have your opinion.
I understand your standing point completely. And, I explained my point of the view, in which I sincerely believe in, just as you did. I remain firm regarding being against charging interests.

Kind regards,
Simona

#9 Michael John Smith

Michael John Smith

    Advanced Member

  • Members
  • PipPipPip
  • 167 posts

Posted 20 September 2008 - 06:22 PM

Your point is taken but I still maintain your statement about focusing on interest being charged poor people is just another excuse. I did not start this discussion to debate interest rates or the ethics of charging interest rates. But OK. This is Buddhism and Business, so here goes. The reason for interest being charged on capital is because capital is not free, not in the democracies of the west or the Buddhist countries of the east. Perhaps Karl Marx did not accept this, and of course I know the early church didn't accept and people were forced to turn to the Jewish moneylenders because they did accept it. I know also that Islam does not go in for charging interest but the reality is the rest of us do.
I restate what I said before about freedom. Freedom includes the freedom to get into debt if you want to and includes the freedom to charge and pay interest. The microbanks have been very successful and indeed the major innovator of microlending was awarded the Nobel Peace prize for his work in this field.
I called you noble members because I recognise your noble intentions and your accumulated merit - sufficient enough to start you on the noble path. But I repeat my warning to you personally and your collegues to be more tolerant, charitable and less arrogant. I stated no firm views to argue for or against when I posted this discussion. I was hoping for a different response it's true but I was expecting a measured, thought out response of some kind, not an immediate criticism of something Buddhists all over the world accept and are supporting.

#10 Khyenrab

Khyenrab

    Advanced Member

  • Members
  • PipPipPip
  • 489 posts
  • Gender:Male

Posted 20 September 2008 - 07:42 PM

But I repeat my warning to you personally and your collegues to be more tolerant, charitable and less arrogant.

You don't even know us, Michael... ;) You're making some very strong statements there. Based on what??

#11 Michael John Smith

Michael John Smith

    Advanced Member

  • Members
  • PipPipPip
  • 167 posts

Posted 20 September 2008 - 08:22 PM

I am basing my impatience with the members of Dharmaling mostly on posts on the Dhamaling.ning network where we have been exposed to extreme prejudice against homosexuals, intoleranance of other religions and running arguements between people of different views taking place where one is critising the other directly for judging people when they are only commnting on thoughts.
As I'm being asked to explain, I would like to put it to the Community of Dharmaling - not Rinpoche, I hasten to add - what are your opinions about building a mosque in Ljubljana, and what are you doing to support it? Why are no Buddhists from Slovenia or Hungary interested in celebrating the UN Day for Peace tommorrow or joining other Buddhists worldwide in the network http://ipeace.ning.com ? What in fact is the blockage preventing Dhamaling members from joining the rest of the Buddhist community worldwide (I have many members as my friends on Facebook, for example, but never read any posts or comments from them on any group or cause). What in fact do you do except sit on your cushions?

#12 Pamo

Pamo

    Advanced Member

  • Members
  • PipPipPip
  • 202 posts
  • Location:Samsara

Posted 20 September 2008 - 09:32 PM

Hello,
Michael, when i was reading your first posts from this thread i wondered, why business in finding a good way to loan to the poor; why not finding a way to give to the poor!? it must be; there is! And then i read Simona's post...

Why are no Buddhists from Slovenia or Hungary interested in celebrating the UN Day for Peace tommorrow or joining other Buddhists worldwide in the network http://ipeace.ning.com ? What in fact is the blockage preventing Dhamaling members from joining the rest of the Buddhist community worldwide (I have many members as my friends on Facebook, for example, but never read any posts or comments from them on any group or cause). What in fact do you do except sit on your cushions?

Indeed! :) not cushions as cushions but there's so much more then sitting behind the screen! how do you know there is no interest in celebrating peace? - in general!, not just as a click on the net! how do you know there is no interest in connection with other Buddhists worldwide? - contacts have been established in person and are being nourished and enjoyed on a personal level! where do you see the blockage? there's indeed a lot more of debates and friendships and life apart from one website! but even as about "the life on the website", we are people, arent't we, trying to connect honestly, not just shooting posts here and there for the sake of them alone. Of course we can connect well like this too, i think, but again, if our motivation is such...to connect. What do you think?
...what is connection....

#13 m_v

m_v

    Advanced Member

  • Members
  • PipPipPip
  • 93 posts
  • Location:Hungary

Posted 20 September 2008 - 09:34 PM

---

#14 Michael John Smith

Michael John Smith

    Advanced Member

  • Members
  • PipPipPip
  • 167 posts

Posted 20 September 2008 - 10:05 PM

I reply thus. Firstly connection is everything. There must be some effort to apply oneself to giving comfort to those in sansara. The purpose of our meditating is to realise suffrring, the causes of sufeering, happiness and the auses of hapiness. But we cannot succeed until we think of others in this world of samsara. We cannot succeeed in simple gestures towards others in the world that basically agree with us. We must reach out to those who really need succour. We must of course eventually give up or relenquich our ego. For now our saving of face. Samsara is very deep, very extensive. In order to liberate ourselves AND others from it we must apply ourselves. We must get serious. I don't happen to belive our activitis recently are contributing to this. On-line or off-line there is no difference, we must have a kind heart, not just satisfaction with an inner-peace, a poziac happiness. We must apply ourselves to Buddhism in action. We must use what we learn on our cushion for the benefit of others, not just mime some dedication. We must be like the Dalai Lama who is not afraid of showing off to the world his acccomplishments - even at our stage. I dare to critisise because I see nothing of this on Dharmaling on-line. I admit I have not been with you in person but I repeat from what I have learned on-line there would be no point in this. I am still very dissapointed. When writing of my shedding tears at the Dharma coming to Slovenia I was told not to be emotional. At my worries about Tibet, I was told not to worry. Only Rinpoche has advised me correctly to convert my emotions using the Tonglen practice, etc.

#15 Pamo

Pamo

    Advanced Member

  • Members
  • PipPipPip
  • 202 posts
  • Location:Samsara

Posted 21 September 2008 - 12:38 AM

Good evening again Michael,
with your words you express more or less the same. We just have a different way of giving. Nothing wrong in that, right? And it shall be so until we are capable to act wisely in any situation, upon any problem. To give well. So to really give. But you cannot blame people for not being wise, right?
But, in forums, we can only re-act upon words typed in the boxes, no any other sign of communication is given here. We can guess what others would need, but that's difficult, especially if we don't know each other a bit better. So sometimes it can help if the expectations are simply stated - if there are any - so to not be ignorant (in most common sense of this word) and just talk about the subject; express one's own opinion, simply, as the forums are generally meant for, as i see; but to be a bit more careful.

I dare to critisise because I see nothing of this on Dharmaling on-line.

to give you your own answer :)

Only Rinpoche has advised me correctly to convert my emotions using the Tonglen practice, etc.

because, you see, we are all learning, just like you.. :) so, let's not harm each other

I don't happen to belive our activitis recently are contributing to this. On-line or off-line there is no difference, we must have a kind heart, not just satisfaction with an inner-peace, a poziac happiness. We must apply ourselves to Buddhism in action. We must use what we learn on our cushion for the benefit of others, not just mime some dedication.

yes! and isn't this very post just a good practice for that! I sound like a preacher :) and i am one to myself alone, too :) ....how difficult it is to express really honestly without hurting, projecting... i think this is our good practice...to look for and find the way!

#16 Michael John Smith

Michael John Smith

    Advanced Member

  • Members
  • PipPipPip
  • 167 posts

Posted 21 September 2008 - 05:56 AM

Thank you for your wisdom. I am beginning to wonder if keeping mindful is not even more difficult on a Dharma network than in everyday life. I am wishing everyone peace on this international day of peace.

#17 Simona

Simona

    Advanced Member

  • Members
  • PipPipPip
  • 458 posts

Posted 21 September 2008 - 08:11 AM

But I repeat my warning to you personally and your collegues to be more tolerant, charitable and less arrogant.

I will report it to the police, because you went a bit too far. You have no right to threaten me personally.

#18 Michael John Smith

Michael John Smith

    Advanced Member

  • Members
  • PipPipPip
  • 167 posts

Posted 21 September 2008 - 08:58 AM

My dear young lady. There seems indeed to be a problem with communication here. I am English and I write my sentances seperated by punctuation marks but in fact they are linked, one to the other, and the intent is that they all be read, one after the other. You have taken one sentance out of context as we say. Nobody is threatening you or anyone personaly. The warning given was not intended as a threat.

#19 Simona

Simona

    Advanced Member

  • Members
  • PipPipPip
  • 458 posts

Posted 21 September 2008 - 10:36 AM

Ok :bow:

#20 Pamo

Pamo

    Advanced Member

  • Members
  • PipPipPip
  • 202 posts
  • Location:Samsara

Posted 21 September 2008 - 02:45 PM

Thank you for ...

uf, such a strong word for sharing the view with you. But i pray for wisdom. As in different ways you expressed many times you do too. And all that come here to share this space, i believe. Maybe in this prayer we connect? :)
All the very best,
pamo




0 user(s) are reading this topic

0 members, 0 guests, 0 anonymous users