In 2006, Muhammed Yunus was awarded the Nobel Peace Prize for his and the Grameen Bank’s efforts to empower the rural poor in Bangladesh through micro-finance. It was a monumental decision that highlighted a paradigm shift in the minds of many. Most economic aide is delivered to larger organizations with the hope that it trickles down to those who need it. The harsh reality is that the aide is whittled down to a fraction of what it should be by the time it makes it to the poor. Contrarily, Yunus and the Grameen Bank devised a micro-loan system that distributed money where it was actually useful, sometimes in as small an increment as $20. The result was an empowered population (mostly women, in fact) that repaid the loans with startling efficiency.

Today’s leaf, Kiva, takes microfinancing to another level. Kiva allows anyone in the world to become a micro-lender just like the Grameen Bank. The network pairs lenders with projects, all while documenting every little story. I’m infatuated by the entrepreneurialism rampant in this model. On one hand, this idea transforms the act of charitable giving so that a person no longer pitches money into a sea of funds, never knowing what it will be used for. Instead, that same person can choose a project of his/her liking to invest in and track its progress throughout. What’s more is that the money is systematically repaid just like any other bank loan. At that point, it’s up to the lender to decide whether to collect and move on or reinvest in another project. One caveat to the lending process would be that the lender never actually makes money on the investment because the interest on the loan goes back into the program. Still it’s an innovative way to contribute while still being able to make your money back.

On the borrower side of the transaction, the vein of entrepreneurialism is even richer. Here is a story of poor, impoverished people that are written off as useless until of course they prove their worth by taking a small investment and turning it into a profitable one. It goes to show that while we think they need charity, in reality, they only need confidence and a few resources. Give a man a fish or teach a man to fish, you choose.

Kiva’s identity is somewhat tragic, however. It is an example of how a savvy organization, full of innovation and vitality, can be done a disservice by a lackluster image. I would never reduce an organization down to a logo and website, but the reality is that your image communicates credibility and validity. And in matters of money, especially money-lending, legitimacy is so important. I’m not sure I completely trusted Kiva’s legitimacy when I first encountered it. That’s why I hope that Kiva finds an identity that adequately communicates its merits, because I want so badly for Kiva to succeed.

Off to loan some people some money…

Explanation of the Leaf of the Day.