Do Good With Your Money: An Introduction to Micro-Lending

by Emily Guy Birken · 10 comments

You may or may not have heard of micro-lending, the hottest new trend in global finance, but it is changing the way people borrow, lend and donate. Boiled down, micro-loans are small loans, generally from $100 to $1500, made to the working poor or other needy individuals who are unable to borrow money through traditional routes. Micro-lending first became an avenue for investors by helping impoverished individuals in third world countries—particularly women in rural areas—to borrow money for business, agricultural and educational ventures. The idea has spread so that you can now help individuals both far away and next door see their dreams become a reality. While some micro-lending will earn you a return on your investment, others are simply loans that will be repaid at dollar value, and some are actual gifts. No matter what, you can feel good about where your money goes. Check out the following four websites for ways to lend or donate your money:

1. is a micro-loan site that will earn you interest, generally 2-3%. For as little as $20, you can invest in a project that is meaningful to you from anywhere in the world. The money is then bundled with other investors’ dollars to go to a micro-financing bank, where it is then loaned to the project of your choice. Microplace ensures that 100% of your loan will go to the necessary projects. The best part is that you will earn a return on this investment. When the investment matures, you have the choice of withdrawing your initial stake or rolling it over into another investment.

2. is a nonprofit micro-lending site. With Kiva, you are making a donation that you will receive back. For as little as $25, you can lend money to an individual project anywhere in the world. The micro-finance bank will disburse the money to the borrowers, and you are repaid your donation as the micro-financier is repaid. You can then recycle your money to another loan, withdraw it, or donate it to Kiva for operating expenses.

3. is a website for writers, musicians, artists, and other creative individuals to generate funding for a project by requesting donations. With Kickstarter, the artist posts a description of the creative endeavor, and requests funds to help it come to fruition. In this case, you are a patron of the arts and making a donation, but the artist retains full creative control of his project. One of the most intriguing aspects of Kickstarter is the all-or-nothing funding. The artist requests a specific amount needed to create the project and has a time limit on getting the necessary pledges for that amount. If the time runs out and the project has not reached its goal, no money changes hands. It protects the artist from creating a project without funding, and donors feel comfortable taking risks on interesting concepts.

4. is a way to help American students who are trying to get through college. With this website, you can find a student (or graduate) who is in need of help either paying for school or paying off student loans. Your donation will go directly to either tuition or student loan payments, so you feel confident in your support of education. The cost of education has spiraled out of the reach of many students, and this website can give you the opportunity to help an individual. You can search profiles to find a student who attends your alma mater, is planning to go into your career field, or simply seems like a good kid who could use a hand.

Micro-lending and micro-philanthropy are ways for small amounts of money to make a big difference. If you are looking to invest or donate, think about making a micro-loan or donation.

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{ read the comments below or add one }

  • BJ says:

    I’d like to add another worthwhile website which surprisingly was not included. – makes it easy to help classrooms in need. Public school teachers post classroom project requests.

    They now make it easy by offering an auto-donate option. I have set this up to donate monthly. You receive an email reminding you of your donation so you can go online and choose a project or let them know that you leave it up to them.
    Teachers write you thank you emails and you can also request thanky yous from the students. They hand draw wonderful cards which you get in the mail.

    I’ve been donating to the 2 elementary schools that I went to in RI.

    Check it out.

  • KOUMAN says:


    Chers fondateurs de structures sociales charitables, de bénévolats, de ONG et d’autres bienfaiteurs.

    Nous sommes de jeunes gens ambitieux originaires de l’Afrique de l’Ouest précisément de la Côte d’Ivoire (ABIDJAN). Nous sommes un groupe de Responsables de notre Eglise, la Mission Evangélique Réhoboth..

    Certains d’entre nous sont des vendeurs de charbons de bois.

    A cet effet nous avons décidé de créer une micro entreprise à caractère social dénommée : LE BIENFAITEUR.

    Notre souci est d’employer nos fidèles démunis, chômeurs dans cette entreprise

    Ainsi nous voulons utiliser les recettes de nos ventes pour subvenir aux besoins de nos membres, orphélins, abandonnés par leurs familles et qui sont à la charge de l’Eglise et aussi venir au secour à toute autre confession religieuse.

    Notre souhait est de tendre la main à la population pauvre, misérable des quartiers précaires et bidonvilles à se ravitailler de charbon de bois de qualité à des prix dérisoires. Ce ravitaillement s’intéresse donc à tous ceux qui ne peuvent pas s’acheter une bouteille de gaz butane.

    Seulement n’ayant pas de moyens conséquents notre projet avance à pas de tortue. Et il risque de ne pas avoir une issus positive. Le problème de moyens financiers s’impose à nous avec acuité. C’est compte tenu de tous ces paramètres de nature à nous freiner dans l’évolution de notre entreprise à la fois noble sociale, humanitaire que nous sollicitons votre indulgence et votre soutien financier..

    Et surtout nous vous demandons de vous fier à votre sens d’humanisme et de partage.

    L’acceptation de notre demande d’aide serait pour nous une joie immense et un motif de réelle satisfaction.

    Nous avons déjà débuté dans quelques petits points de vente dans la ville..

    Chers fondateurs de structures sociales charitables, de bénévolats, de ONG et d’autres bienfaiteurs nous savons pouvoir compter sur votre disponibilité et sur votre générosité légendaire afin de donner un espoir de vie et un sens à notre micro entreprise.

    Dans l’attente d’une réaction favorable; veuillez revoir cher Monsieur, Chère madame responsable de structures sociales et d’autres bienfaiteurs nos remerciements anticipés


    Chef d’association

    05 BP 2612 Abidjan 05 – COTE D’IVOIRECEL:

    (225) 05 94 57 25 – (225) 21 36 57 77

    Email :

  • Glenn Makoushinski says:

    I have been investing with They have cometitive rates (relatively) up to 3.5% APY and you get to choose whom to support (my strategy is: first choose a predominantly non-black, non-muslim community; then choose highest return and then quickest payback.
    Click on “Website.” to claim your $20 to get your feet wet.

  • Thomas says:

    I donate to a few charities monthly, because there are many deserving charities who do wonderful work.
    The only thing wrong with trying to aid many worthy poor is the fact that many are scammers.
    I tried loaning funds to and took a financial beating. Out of 65 loans close to 30 defaulted. I learned a very painful lesson.
    I only donate only to those who do good deeds with my donations.

  • 401k says:

    Recent time many people invest their money in a share market to get huge money within short time. Few people getting successful but many of them lose their money. I think banking investment is better….

  • Hunter says:

    I think the banking / credit industry can learn many lessons from the Grameen Bank and Muhammad Yunus. While it is against the law discriminate based on gender when lending un the U.S. Their experience shows that women are a far better credit risk due to their focus on the family. I wonder if Fair Isaac Corp would share gender credit risk information?

  • Mitchell says:

    My wife and I love, we budget $30 per month to loan out. I look forward to doing this every month. I’ve always accounted for these loans as “gifts”, and am pleasantly surprised when the repayments allow me to make an extra $25 loan.

  • David says:

    I read a book awhile ago called the bottom billion and it went into this topic in great depth — recommended read for anyone interested in this. This is probably the best way to pursue a self-empowerment approach, and I know it has been particularly successful in China and India, with loads of companies branching out to offer micro loans to small income borrower’s looking ot make their way.

  • Jenna says:

    I’m a huge fan of, their gift certificates make great presents too.

  • indio says:

    I received an email that Kiva is going to expand to make loans within the US now. Previously they only made loans in developing countries, like Equador, Peru, Kenya, Cambodia, and eastern bloc countries. When you make a donation to a non-profit you never know how much of that actually makes it to a person who needs it. With Kiva you’re emailed updates by the borrower who gives a progress update. The borrower doesn’t feel as if they are getting charity so they work hard to show that they deserve and appreciate your trust in them. I’ve made several loans to a woman in the Philippines who really has the determination and drive to make her business a success. To date, I haven’t had anyone default on the loan but I don’t think that would stop me from reinvesting in someone else’s business idea.

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