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Invest in people, not properties!

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  1. #21

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    Here you have a kiva loan at 71%: http://www.kiva.org/lend/562406 (though it's not exactly "interest rate", it's "portfolio yield", and also includes the fees. It's basically the cost of the loan, on a yearly basis.

    I don't think that 71% is very different from a loan shark, and I don't understand why Kiva would support such companies.

    Then they have loans like this, as 22%: http://www.kiva.org/lend/565431, and that's where I lend my money.

    Last edited by cheepo; 05-06-2013 at 10:07 AM.

  2. #22

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    Quote Originally Posted by cheepo:
    I don't think that 71% is very different from a loan shark, and I don't understand why Kiva would support such companies.
    Umm, loan sharks charge a lot more than that and when you default you get injuries.

    Seriously, if you need to know why the rates are high, the information is out there:
    http://en.wikipedia.org/wiki/Kiva_(o...Interest_rates

    http://pages.kiva.org/fellowsblog/20...interest-rates

  3. #23

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    Quote Originally Posted by cheepo:
    I never worked for an NGO, but I knew some people who do, and I see how they operate in Southeast Asia. It's true that some of the "field workers" of international NGOs earn good salaries, and their managers (in Europe, USA, etc.) earn very very large amounts but

    1) the NGOs are indeed large, manage many millions, and employ thousands of people. They do need good managers to operate properly, and in some ways are more difficult to operate than profit-making businesses because they have to jingle a big bunch of different things (fund raising, emergency aid, school building, or whatever) in very difficult conditions, in very difficult countries (where corruption is endemic, nothing works properly, etc.).

    2) Field workers live in difficult environment. If they receive peanuts, they would leave after a year or so, which means that there would be very large turnover, and nothing would be accomplished. They are not saints either. They want a life, like everybody else.

    This is not to excuse their exorbitant salaries, but to put it all into perspectives.
    All well and good, but I like the idea of a charity that is run by people motivated by a passion for the cause and not a fat expat salary. I am not talking abut paying the, peanuts but the lifestyle of the country managers I have seen goes well beyond what one would expect from an NGO and more in line with a senior banker.

  4. #24

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    I don't think it's unreasonable to ask whether a charity is tax deductible or not. The funny part is related to the amount of money involved and the fact that it seems to be your only concern.

    HowardCoombs and INXS like this.

  5. #25

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    iliketurtles:
    QUOTE:" Hey, Oldtimer. You're running a charity, right?I must admit to you that I don't consider your charity more or less worthy than, for example, save the Children.I have money I would like to donate regularly to a charity but there are so many worthwhile ones I don't know which to pick. If I did receive a tax exemption, it might help my choice.Would you consider me an awful, shameful, person filled with petty self-interest if I asked whether or not my donations would be tax deducted? Is the price of my donation worth my disgusting, shameless, self-interest?

    I have already said in my previous post, that we have tax exemption in HK. You will get tax deduction for donations made to Erase Poverty. Do visit our site: erasepoverty. hk or our Facebook page. You can donate through Paypal also. or you can transfer to our HSBC ac.


  6. #26

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    Quote Originally Posted by HowardCoombs:
    Umm, loan sharks charge a lot more than that and when you default you get injuries.

    Seriously, if you need to know why the rates are high, the information is out there:
    http://en.wikipedia.org/wiki/Kiva_(o...Interest_rates

    http://pages.kiva.org/fellowsblog/20...interest-rates
    The links you posted don't say "why the rates are high". I wrote to Kiva some time ago, and they basically replied "costs of lending money in some countries are high. If you don't like it, chose others who lend money at lower interest rates".

    Can anybody please explain to me why this microfinance company lends at 91% a year, while this one in the same country lends at 56% a year, and this one in a neighbouring poorer, country, lends at 37.6%?

    And more importantly, can you run a very small business successfully if you pay 91% interest rate?

  7. #27

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    Quote Originally Posted by cheepo:
    The links you posted don't say "why the rates are high". I wrote to Kiva some time ago, and they basically replied "costs of lending money in some countries are high. If you don't like it, chose others who lend money at lower interest rates".
    91% is indicated as portfolio yield, not the rate they charge customers. Pls use correct terminology.
    If you want to find out why, you should ask the partner directly as Kiva does not control the partner nor keep track of internal policies; the partners operate independantly.
    http://www.credituyo.com/
    http://www.mixmarket.org/mfi/credituyo
    Since you have interest, you should also participate in the discussions found here:
    http://www.kivafriends.org/
    Lots of people in there with concerns, questions as well as friendly discussions.

    And more importantly, can you run a very small business successfully if you pay 91% interest rate?
    The answer is obviously yes as evidenced by the success of microlending and its continued rise in popularity. Having said that, there are a lot of effort being put toward the direction of lowering the transaction costs.

  8. #28

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    Quote Originally Posted by kimwy66:
    Yes, you should. If your over riding concern with giving to a good cause is what you get out of it, then you deserve any scorn you might get for announcing your pettiness to the world. A good cause is a good cause regardless of tax status.
    Unfortunately though there are many "good causes". Just because someone gets a tax benefit does not make them a bad person. As MrMin is oft to quote "the first recipient of charity is the giver". Who really gives for the sake of giving - and not for the "feel good factor" it brings out in us? (if you're honest).

  9. #29

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    Quote Originally Posted by HowardCoombs:
    91% is indicated as portfolio yield, not the rate they charge customers. Pls use correct terminology.
    You can call it what you want. That's what the borrower has to pay.

    Quote Originally Posted by HowardCoombs:
    If you want to find out why, you should ask the partner directly as Kiva does not control the partner nor keep track of internal policies; the partners operate independantly.
    Kiva supports (by putting them on their portal) these MFI, so I can indeed ask Kiva directly.

    Quote Originally Posted by HowardCoombs:
    The answer is obviously yes as evidenced by the success of microlending and its continued rise in popularity. Having said that, there are a lot of effort being put toward the direction of lowering the transaction costs.
    And you have never heard of the farmers who are bankrupted by microcredit organisations, right? (basically they borrow too much and can't repay).

  10. #30

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    Kiva supports (by putting them on their portal) these MFI, so I can indeed ask Kiva directly.
    Kiva puts them up and also discloses all information about them. As to *why* they do certain things (like setting up interest rates) is not under Kiva's domain. You can ask but you wont get an answer. If you want an answer, you should follow my advice and ask the MFI directly.
    And you have never heard of the farmers who are bankrupted by microcredit organisations, right? (basically they borrow too much and can't repay).
    I've also heard of people who borrow too much at 3% and can't repay, and I've heard of ppl who borrow at 0% and cant repay and also people who win millions in lottery and go bankrupt.

    What is your point exactly?

    Microfinance works and it works at all sorts of levels of interest rate because the market supports it and its better than the alternative.
    Last edited by Editor; 05-06-2013 at 05:44 PM. Reason: Cleaning up a bit..
    MovingIn07 likes this.