Do it yourself microfinance

Poverty alleviation meets online dating, with a dash of eBay.

Published December 18, 2006 8:12PM (EST)

I just helped Mawule Agbeka, a woman in Togo, buy a freezer. And I feel a little dirty.

I made a loan of $25 via Kiva, a Web site that facilitates microfinance loans to entrepreneurs in the developing world. Agbeka's Kiva page says she is trying to borrow $1,000 to buy a freezer so she can diversify her retail cereal business into frozen goods. Ironically, although in recent months I've posted several times on microfinance and Nobel Peace Prize winner Muhammad Yunus, I learned about Kiva from a blog posting by a friend and former Salon colleague Chad Dickerson. But that's how social networking in the 21st century works. You learn from a blog posting by a friend who lives a block away in Berkeley, Calif., that he just made two $25 loans to two women in Kenya (and expects to be paid back, albeit without interest) and you decide, hey, I gotta get me a piece of that action!

Kiva has received no end of great press since its launch in October 2005. But the process of reviewing loan applicants in Africa, online, has left me feeling a bit off-kilter.

Here's why: Kiva works like an online dating service. Except instead of reviewing potential partners for sex or romance, you are evaluating loan applicants on their business plans and relative plight status. You can look at their picture, read their profile, sometimes even peruse a daily journal. You can search the Kiva database according to your preferences -- except instead of looking for "fans of noir films who live within 25 miles of Berkeley and get turned on by Mayan archaeology" you can limit your criteria to "Azerbaijani women involved in agricultural production." In classic social networking fashion, you can even see who in Berkeley has already made loans to prospective applicants in Ghana. Who's friending who?

And just as with online dating, the wrong choice of a phrase can be immediately or arbitrarily off-putting. One Kenyan distributor of fresh fruit to hotels wrote that as part of her own "contribution" she was going to adopt an HIV-positive orphan. Call me a disgusting cynic, but the first thought in my mind was, "What does that have to do with whether I should loan her money? Did she include that promise in her profile because she thought it would make her more attractive to Western loan donors?" I instantly hated myself for even thinking that, but it is impossible to review the profiles of these struggling entrepreneurs and not make a decision about whom to loan to without feeling the urge to base it on random subjective factors.

A BusinessWeek profile of the emerging crop of microfinance sites summed up the problem in one line: "Widows in Africa are almost always funded immediately, but men in Central America often have to wait longer." (I wanted to address this injustice, but Kiva's database currently includes no Central American men looking for loans.) The concept of the relative marketability of how poverty looks is innately distressing. And yet, it is the very personalization of the process that makes the whole online enterprise so compelling. Clicking through these databases is addictive and irresistible -- anyone who has made a serious foray into online dating knows that. But to combine that potency with poverty alleviation packs an extra wallop.

I could not help but be reminded of Muhammad Yunus' epiphany, as described to Oprah, when he learned how small the amount of money was that was necessary to help a woman in Bangladesh free herself from a usurious money lender. How could he do otherwise than to lend her his money? To combine that feeling with a process that takes advantage of the Internet's possibilities -- personalization, low overhead, ease of use -- is brilliant.

I am routinely astonished by the world as it emerges before me, but wrapping my brain around do-it-yourself microfinance has been one of those moments where I feel the earth move under my feet. It is a concrete manifestation of how the Internet is redrawing the world's lines of communication. Suddenly I have visions of poor women in Ecuador trooping to their local Internet cafe, where they will tweak their Kiva profiles in the hopes of generating more loan income. And on the other side, there are the affluent Californians, searching the microfinance databases for vegan farmers engaged in harvesting ecologically sustainable biofuels. It's a big world out there: You will find the loan applicant of your dreams.

And get ready for the logical next step. While trolling an online dating site, you discover that one of the criteria by which you are rating prospective mates will be, who do they lend to?

Oh come on, not another African widow! Next!

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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