June 28: How to Be a Microfinancier

(Dominican children) Buenos Dias!
Good morning Hank, it's Thursday, June 28th. Welcome to my new backyard. Hank today we're gonna learn how to be microfinanciers. It's kinda like being a regular financier, only it's free, and instead of being evil it's good. Hank, the Dominican Republic resort we stayed at was pretty swank, but we took one day to go to the real Dominican Republic, where, like, regular people live. And what we learned there was that regular people in the Dominican Republic live in poverty. In fact, about 60% of people live in extreme poverty in the Dominican Republic, and about half of those people live on less than one dollar a day. People in extreme poverty have almost no interaction with regular banking. In fact, when we were there we  saw people who didn't know if you signed a check on the front or on the back.
They don't have any opportunity to have access to banking because they don't have the kind of collateral that loans require. So they end up in this cycle of poverty, right, where they can't get a loan to get a business, and without a small business they don't have any job opportunities because there aren't really any jobs because the economy doesn't function very well and the reason the economy doesn't function well is because no one can get loans to start businesses.
So microfinance organizations take the poorest of the poor and they offer them opportunities. Now the only type of other loan that these people can get are from loan sharks, who often charge a thousand percent annual interest. Hank when we were in the Dominican Republic we met with that wonderful group of women who were just about to graduate from their microfinance training. They'd spent five weeks learning the basics of banking and also thinking about what kind of businesses they were going to start, and then we showed up for their graduation ceremony which was held in their neighborhood.
The woman on the bottom left in this picture was opening up a shoe store, the woman next to her was going to sell Avon products. The woman directly two rows behind her was opening up a cafeteria.
Here's the remarkable thing about this microfinance organization we met with: Their loan payback rate is more than 98%. That's higher than like, most American banks. Because these women know that this is an excellent opportunity to have a chance to get out of poverty, they're really good about paying back their loans. And then once they pay back that loan, they take out larger loans to continue to grow their business. In fact, as we were driving back from that neighborhood, we saw a sprawling complex of restaurants that was all started by one woman who got one one hundred and eighty dollar microfinance loan.
Hank, I think we can agree- (coughs) hold on. (coughs) I swallowed a gnat. Stupid nature. Hank, I think we can agree that microfinance is an awesome idea. The problem is that usually the people who start these microfinance organizations are like really really rich. However, there is now this amazing website, kiva.org, K-I-V-A-.-O-R-G that allows you to be a microfinancier. You give money directly to someone who's living in extreme poverty, and then they pay you back. Hank, it's like charity, only it doesn't cost you any money!
So, Hank, as a project, I propose that you and I over the next week give several gifts to Kiva.org. Maybe the Nerdfighters will join us. Hank, I've gotta go back inside and paint my office, I'll see you tomorrow. (cute Dominican children)