Kind of randomly yesterday, I was reminded of the emerging concept of microcredit, in which very small loans are made to entrepreneurs in preference to “charity” aid. Specifically, I saw a banner ad for Kiva.org on someone’s site and, intrigued, clicked through.

Kiva runs a modest web-based system whereby they profile small businesses which is requesting a loan for a specific amount towards a specific end. The loans are modest–I think that all the ones I saw were under $1000–and the loans are funded by a number of individuals like me.  In fact, they are only accepting loans of $25 per lender per business. (This seems a bit strange to me, but I haven’t looked for any deeper justification.) If you are so inclined, you can browse the various projects and pick one which is more pertinent to you; I looked into Africa and then decided to fund someone in Tanzania since I have good friends who  live there.

So, I loaned $25 to Anna Wikedzi who needs a refrigerator to chill the water she sells in Dar es Salaam. Her entire $625 loan has been raised, so her “case” has disappeared from the banner in the margin, to be replaced by another person seeking credit. I paid by Paypal and it could hardly have been easier; and the whole $25 should come back to me within the year. It almost seems like a no-brainer!

Kiva.org modestly asks for a 10% donation to help keep the site running, which of course won’t come back in cash, but which is also totally voluntary, and the amount can be adjusted as part of each contribution one makes to a loan fund.

Apparently I’ll be getting occasional updates on Anna’s progress, which puts me in mind of that charity for which Sally Struthers was a spokesperson. But in any event, it seems like such an easy way to do a little good that I hope the idea really catches on. Microcredit as a general idea (small loans instead of charity) has been around for many years — long enough that the Grameen Bank, whose founder won the 2006 Nobel Peace Prize, has catalogued several varieties of the idea. But the overhead to run a website like this is relatively low, and I suspect that many people who are willing to lend are happy to also make a modest donation to help fund the operation.

While I’m all for aid to the developing world, I also think that the idea of microcredit has a lot of promise for independent artists; one could almost imagine an indie record label backed by microloans from avid fans. I guess in some ways the Artist Share label is just such a thing.  In any event, I can’t see how it can be bad as long as people only take on the appropriate amount of risk in making loans.  (Given this year’s headlines, it seems plausible that average citizens might make better judgments in some cases than megabanks!)

Feel free to post in the comments or otherwise let me know if you see more cool examples of stuff like this.