Yesterday, I made three loans. My first prosper loan bid was accepted, but to be honest I’m not really sure what I’m doing.  This is probably a bad thing given a) I might lose money  b) I am suppose to be writing about prosper as a part of my series on earning money.  I promise I’ll get my act together and do some research ahead of my post on Propser.  I made a $50 loan for C credit rated borrower at rate of 13.95%.   Prosper effectively will take 1% off the top, so net I’ll receive 12.95% if the guy doesn’t default.   I have a few other bids on which the bidding period will end soon.  I’ll see what happens, and keep everyone updated.

The other two loans I’m much more pleased with.   I made two loans on Kiva.org one for $25, and one for $50.  For those who haven’t heard of Kiva, it’s in the microfinance space.  Grameen bank is probably the most commonly known microfinance institution given the founder Muhammad Yunus was given a Nobel Peace Prize in 2005 for his work.  Kiva partners with existing organizations such as Norwegian Micro Credit and Action Kenya to deliver financial capital to individuals. 

These loans do not pay interest, so if I break even financially that would be the best possible outcome.   The point of these loans is not to make money, but help individuals in developing countries who are already helping themselves.  The people who apply for these loans typically have small businesses that need capital to expand or allow them ride past hard times.   As the old proverb goes, give a man a fish he’ll eat for one day, but teach him to fish and he’ll eat for the rest of his life.  I’m a fan of this bottom up approach towards helping the developing world.  And there are no more deserving individuals than those who actively work to improve their own lives.   I also like fact the aid is structured as a loan.  I actually think when Aid is meant to be repaid it empowers individuals.  Pay kiva.org a visit, and make a loan or donation (I donated $25 to the organization on top of the loans).