Happy 2010! I just reviewed my 2009 Kiva microlending portfolio, here's an update! www.kiva.org/lender/saloni
As a high school student, I contribute to Kiva to help woman attain financial stability in developing countries. I also use the principles of economics to spread the risk of my lending portfolio. Using the profits from my own non-profit handicraft business and occasional birthday gifts, I have helped 43 women thus far. I focus on women with low socioeconomic status and need less than a $1000 loan. I lend the repaid money to other entrepreneurs, creating a perpetual cycle of giving and receiving.
Highlights of my Kiva portfolio
Ø 100% of loans to women
Ø Does not fund loans that promote gambling or alcoholism
Ø 43 loans funded in 18 countries
Ø Smaller amount for each loan to spread the risk and help more women
Ø Favors Kiva MFIs with a 4 or 5 star rating to minimize the risk of defaulted loans
Ø Focus on entrepreneurs from countries with low per capita income
Ø 63% of loans funded in countries with less than 5,000 USD per capita income
Ø 77% of my loans on Kiva request less than 1,000 USD
Ø 100% of my loans as of Spring 2009 are dedicated to Maria Shriver’s Womens Conference Team
Ø My loans make up 4% of all of Maria Shriver’s Womens Conference Team loans
Why I loan only to women in poor countries
A loan is not only money, but also an opportunity. By helping women with an entrepreneurial drive, I have helped them live out their dreams of financial independence and self-sufficiency. The synergetic combination of women and entrepreneurship can change Third World societies in unimaginable ways. Considering the social, economic, and political obstacles disadvantaged women have encountered throughout history, empowering women is necessary now more than ever in a world that is still ravaged by wars and populated by the impoverished. With loans as small as $125, these entrepreneurs can make ends meet on their own terms. If you give a woman a fish, you feed her for a day. If you give her a loan, you give her a fishing pole, a stand at a local market, food for her family for life, and a perpetual boost for their nation’s economy. A woman is not only an anchor for her family, but also for humanity.
How I reduce the risk of loans being defaulted
By understanding basic economics and the fundamentals of finance, I have learned how to make smart and small investments and how to disperse the risk of losing my money by funding several entrepreneurs. Favoring quantity over quality, I lend smaller amounts to many entrepreneurs rather than committing hundreds of dollars to a certain individual. By lending to entrepreneurs whose field partner risk rating is 4-5 stars, I spread the risk of losing money on a loan. By dispersing my loans geographically, I further reduce the risk of loans being defaulted because a country’s socioeconomic circumstances could dramatically change, affecting an entrepreneur’s repayment. According to Reuters UK, women are also more fiscally responsible.
What I have learned in terms of economics, business, and humanitarianism
By examining business plans, evaluating repayment terms, and judging the risk of a loan, I have learned much about making smart investments with humanitarian intentions. I discuss this learning as well as issues such as recession and poverty in my blog, Miss Economist (see links below). The bigger lesson I have learned is the importance of philanthropy. By helping those in less fortunate circumstances, I have realized how empowering women can change the world.
My next steps
Now that I have established 43 loans, I aim to not only continue funding more businesswomen but also to communicate the benefits of microlending to the youth and women of the world. By promoting philanthropy and humanitarianism, I will spread the message of microlending and empower women. In addition, I hope to pursue a degree in economics from a prestigious university such as Stanford or University of Chicago and use those skills in the real world.
If you can help in any way, please let me know!