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Despite the poor turnout I decided to fund another 100 or so loans on Kiva. These are funds I don’t anticipate needing anytime soon I figure they may as well be put towards a good cause. Historically about 1.21% of funds lent on Kiva end in default (My % is 1.41%) so there’s a good chance I’ll be receiving the majority of the funds back.

Here’s how to get your loan matched and double your impact on Kiva.

• Join the bloggers team on Kiva
• Pick your loans (up to 4 will be matched)
• During checkout make sure your loans are applied to the bloggers team
• Post which loans you funded and want matched on the group’s messages. List either the loan number or URL on the team’s page on Kiva.
• Once I verify that the information I’ll make matching loans!

If you have any problems or questions, just leave a comment below. Let’s get loaning!

Looking back you can see that I funded 1,000 loans very quickly in the second half of 2008. I’d love to someday get my loan volume at that level again but right now my finances cannot justify it.

I ended 2009 with 1,126 loans. For 2010 I currently have 1,206 loans which means I funded 80 new loans this year. Below are my all time lending stats.

One thing you’ll notice is that my delinquency rate and default rate are higher than that of the average Kiva user’s. I expect over time as I continue to loan my average will fall more in line with the average rates.

I publish these Kiva updates to remind people that I am still actively lending. Hopefully this encourages others to support micro finance lending and helping others lift themselves out of poverty.

GroupOn and supporting sponsors will add $10 to every $15 purchase to make up the difference up to $500,000. That means only 50,000 of these GroupOns are available! This is a great deal for first time Kiva lenders or gifts to people you think would be interested in Kiva.

I also just noticed Big Crumbs offers 6.4% cash back for GroupOn purchases.

This is a great incentive to get people to invite friends and family members to a worthy organization. However one of the biggest problems that I’ve experienced firsthand is that people simply don’t care enough about any kind of charity or goodwill yet alone getting involved with charitable loaning.

In my experience people in my age group (early 20s) generally won’t get involved with any kind of charitable work unless there are other incentives involved such as a chance to socialize with friends or something to pad their resumes. I’ll try to invite a few people here and there but I’ve tried unsuccessfully several times in the past even when there was no incentive to do so.

I truly believe that Kiva’s mission of providing funding for micro finance institutions does in a way alleviate poverty (even if by the slightest bit) by allowing third world entrepreneurs to lift themselves out of poverty. Yes, there are flaws in the way the Kiva system works but they are acceptable means to an end.

I found out that Kiva has added the ability to view individual lending statistics in chart view as opposed to a table list view. You’re free to check out my lender page on Kiva.

In other related news the Bloggers team on Kiva (which anyone is welcome to join!) has reached 249 members and $57,525 in loans.

While I’m not involved in Kiva as I was in the past I still believe in it’s cause to help alleviate poverty by empowering third world entrepreneurs to lift themselves out of poverty.

Ever since Kiva added the sharing of currency exchange losses to lenders I’ve been really adverse towards loaning to field partners who don’t cover this risk. I feel that providing interest free funds and sharing in the risk of default or fraud (which is where the majority of my defaults have come from) is more than adequate. The KivaBank tool allows me to filter and select loans based on more advanced criteria. As a third party, the website only helps you filter loans, the funding and transactions are still done at Kiva.

I took the plunge and made two loans. The first contribution was $25 made to Abubakar Sadiq for a solar home system. The second was $100 made to Patience Ampong for a clean burning stove. Both loans have respective repayments of 6 months and 3 months so I can’t comment on that process until later in the year. I’ll surely post another update on how things go.

If you like the green focus and looking for an alternative for Kiva I wouldn’t suggest you hop on board just quite yet. Energy in common seems to be a really young initiative. There are usually less than 10 loans available at a given time and the website is still a work in progress. Keep an eye out for this organization though. Kiva proved that a platform for micro-financing fundraising through the masses can work and hopefully this survives its infancy.

With Microplace the goal is for “socially responsible investing” where you lend money to microfinance institutions and they in turn loan the money to various entrepreneurs. Microplace is an actual broker-dealer for microfinance securities and registered with the SEC while Kiva is registered as a non-profit charity. Microplace was bought by eBay in 2006.

Tracey Pettengill Turner, who founded Microplace, believes there are not enough charitable dollars to raise the capital needed by microfinance institutions. One of the key differences of lending on Microplace (as opposed to Kiva) is that you earn a return on your investment.

Investments and Returns

Browsing through various investments I found that investment yields range between 1% and 4% at this time. I don’t know if this is the historical norm or investments yields follow rate change pattern based on the credit environment. There are various loan lengths from a couple months to several years. Interest is paid quarterly on investments and principal is repaid at the end of the loan term.

One of my concerns is that Microplace doesn’t seem to the address the issue of defaults (if any) at all. There doesn’t seem to be any available statistics concerning past investments or details of what happens with defaults on the website. However each investment is accompanied by a prospectus of the underlying issuer.

Each investment available has a maximum available for purchase even though it is not shown on the website. Once an investment reaches the amount available for purchase I assume it’ll disappear from the listings automatically. If you want to find out how much of an investment is available left for purchase just type 99999999 as the investment amount in the “other amount” box and you’ll find out. Generally most investments where I’ve tried this have $100,000+ remaining so you usually don’t have to worry about investments disappearing left and right.

Funding Sources

Like Kiva, Microplace also uses PayPal as a payment processor. Unlike Kiva, Microplace also gives you the option of funding with a checking account for people who prefer not to bother with PayPal or don’t have an account. Microplace also allows interests and principal payments to be disbursed back to a PayPal or checking account.

Conclusion

My exposure and experience with Microplace is very limited at this time. I made a couple of investments because I was in a Christmas mood and none of them have been repaid yet nor have I received any interest payments yet so I’ll hold off on making any rash judgments. However, as with Kiva I suggest anyone investing to diversify their investments and like with all investments don’t use money you can’t afford to lose.

I’ll post an update to my MicroPlace experience in a couple months when I’ve experienced repayments and had more experience with the website.