Productivity and Positivity, Not Charity

I have never believed in charity.

I don’t believe the world becomes a better place just by transporting money from one person to another. Usually, the people who benefit most from this are the people doing the transportation. They either call themselves “charity organizations” or “tax offices”, depending on their resourcefulness in taking my money. The poor generate lots of jobs for people who transport money. Unfortunately, it rarely improves the lives of the poor.

What improves lives is not transporting value, but generating value.

We generate value by exchanging things. I give something to you that is more valuable to you than to me. And you give something to me that is more valuable to me than to you. By exchanging things we generate value. We exchange two euros for an ice cream, a million for a yacht, or a movie ticket for a kiss.

This is why I have joined

I believe the poor can improve their own lives through trade, not charity. I feel fortunate that I can play a small role helping people to trade. With Kiva I can lend money to the poor. They trade. And then they pay me back. I don’t care that they’re not paying interest on the money I lend them, because for me the value is in the enjoyment. I read stories, I pick favorites, I lend money, I see progress, I feel good. And after a while I get my money back. Hurray, that means I can do it again!

I exchange value and generate productivity and positivity.

It’s much smarter than charity.

p.s. Why don’t you join Kiva?

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  • BalancedPM

    Cool idea! Thanks for the info – I joined Kiva.

  • PDarrall

    In the main I agree and so have joined Kiva.

  • Mark Gibaud

    Hi Jurgen,
    I discovered Kiva several months ago and was about to join, but then I googled and saw some reports of unscrupulous lenders in parts of Central/South America and the Far East who charged ridiculous interest to their clients, and other dodgy stories.. I was left unsure of how ‘clean’ Kiva’s operation is.
    Did you do any investigating of this kind and find anything worth knowing?

  • Jurgen Appelo

    Sorry, I have no knowledge of that. I just know that Kiva is rated highly, and have only heard positive messages so far.

  • Toadi

    I don’t join Kiva or any other microlending companies different reasons.
    First of all the Garmeen bank and Professor Muhammed Yunus (who received nobel prize) are not able to scale the success stories.
    Also most other microlending companies are just used by financing companies to make money on lending money and making more consumer buying products.
    Actually you are using the most easiest route giving money for a fishing roth and don’t explain where to buy or even to use it. So the person ends up buying a fish and ends up with a debt.
    To be honest lots of charity organisations have large support and administration staff not benefiting poor people. But at least the have people in the field trying to make a difference in educating people.

  • Jurgen Appelo

    Sorry, but I find this a lot of nonsense. I don’t give a fishing rod to people who don’t know how to use it. The people themselves know best what they need money for and how they will be able to pay it back. For example, I’m lending money to a Mongolean taxi driver with a broken car. He knows quite well how to make money and pay back a loan. He just needs help fixing his car.
    You seem to assume that the poor are idiots, and that you are smarter, and that you know better what’s good for them. It is somewhat insulting.

  • Toadi

    There are studies done claiming we are pushing poor people even harder in debt. If you read up on some studies (eg. and you can find numerous others via google) you’ll see that being a little bit critical about initiatives is advised.
    I’m not claiming there aren’t individual cases where the money is well spent. Actually using 1 concrete example to disprove statistical evidence is not a valid argumentation.
    I’m not saying poor are idiots because there are idiots in all layers of the population.Yes I call people that lend too much and are not able to repay idiots. Actually the educated ones are the bigger idiots and it doesn’t matter if they are poor or rich. So I don’t mind saying this. Just see the debt crisis.
    Now to come back to my earlier comment. Handing out money without ‘educating’ people properly for me is a stupid move. Doesn’t mean all poor people need to be educated but I think we can agree poor people have less access to education.
    I haven’t looked into depth and did just some quick searches. But do you gain interest on the loans? No. Kiva gets 10% interest. If the lender defaults it’s on you. Actually Kiva has build a nice ris kfree lending business.

  • Jurgen Appelo

    “Kiva itself does not charge any interest; the loans made by Kiva members are passed interest-free to the independent field partner servicing each loan.”
    Only the local lenders charge interest. Which is obvious, otherwise they can’t survive. Of course, there are probably some bad apples among them. As in any industry. But you’re doing exactly what you are accusing me of: you discredit a whole industry based on some reports of incidental misconduct.
    Kiva is not part of that misconduct, and does their best to rate the lenders and only work with reliable ones. Kiva doesn’t keep interest.
    “Kiva itself does not keep any of the interest collected, but operates instead exclusively on donations.”
    You are obviousy misinformed.

  • Toadi

    As I told haven’t looked into Kiva itself. So I’m not claiming anything about their organisation itself. They even can do good in individual cases.
    But microlending itself isn’t a solution that can scale well in the battle to get rid of poverty. According to studies I tend to think it’s not the solution. Think education is still the best for to get rid of poverty.

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