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June 28: How to Be a Microfinancier

2007-06-28 · John · watch on YouTube · Global development · advocacy activism

John recounts the brothers' visit to poor neighborhoods in the Dominican Republic, explains how lack of credit traps people in poverty and how a microfinance organization's borrowers repay and grow, and proposes that he and Hank (and maybe Nerdfighters) lend through Kiva.org.

What is said

00:00:00 — Greeting from the new backyard; 'how to be microfinanciers'; the day in the real Dominican Republic; poverty figures; no access to banking and the cycle of poverty

  • ★★ John announces they will learn how to be microfinanciers, joking that it is like being a regular financier, only free and good instead of evil. (playful) — 00:00:00 · microfinance
  • ★★ John says the brothers' Dominican Republic resort was swank, but they took one day to visit 'the real Dominican Republic', where regular people live in poverty. — 00:00:00
  • ★★ John says about 60% of people in the Dominican Republic live in extreme poverty and about half of those live on less than one dollar a day. — 00:00:00 · extreme poverty
    • number check: about 60% — doubtful
  • ★ John says that on the visit they saw people who did not know whether a check is signed on the front or the back. — 00:00:45
  • ★★★ John explains a cycle of poverty: without collateral the very poor get no bank loans, so cannot start businesses, so there are no jobs and the economy stays weak. — 00:00:45 · extreme poverty

00:01:14 — Microfinance organizations vs loan sharks; the graduating women and their businesses; 98% repayment; the $180 loan that grew into a restaurant complex; swallowing a gnat

  • ★★ John says microfinance organizations offer opportunities to the poorest of the poor, whose only other source of loans is loan sharks. — 00:01:14 · microfinance
  • ★★ John says loan sharks often charge a thousand percent annual interest. — 00:01:14
  • ★★ John recalls visiting a group of women graduating, in their own neighborhood, from five weeks of microfinance training in banking basics and business planning. — 00:01:14
  • ★ Pointing to a photo, John lists the women's planned businesses: a shoe store, selling Avon products, a cafeteria. — 00:01:43
  • ★★★ John says the microfinance organization they met has a loan payback rate above 98%, higher than most American banks. — 00:01:43
  • ★★ John says the women repay well because they see the loans as a real chance out of poverty, and then take larger loans to grow their businesses. — 00:01:43
  • ★★ John says that driving back they saw a sprawling restaurant complex started by one woman with one $180 microfinance loan. — 00:02:12 · microfinance

00:02:36 — Kiva.org lets anyone be a microfinancier; proposal that the brothers give to Kiva over the next week; sign-off

  • ★★★ John says microfinance is an awesome idea. (hedged) — 00:02:36 · microfinance
  • ★★ John says the problem is that the people who start microfinance organizations are usually really, really rich. — 00:02:36 · microfinance
  • ★★★ John recommends Kiva.org, which lets anyone be a microfinancier: you give money directly to someone in extreme poverty and they pay you back. — 00:02:36 · Kiva, microfinance
  • ★★ John sums up Kiva lending as like charity that costs you nothing. — 00:02:36 · Kiva, microfinance > «it's like charity, only it doesn't cost you any money»
  • ★★★ John proposes that over the next week he and Hank give several gifts to Kiva.org, and hopes the Nerdfighters may join. (hedged) — 00:02:36 · Kiva, Nerdfighteria

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