Errol Damelin is Founder and CEO of Wonga.com, an online-lender for small, short term loans based in London, UK. Today, he would like to share something he is passionate about: kiva.org, a non-profit organization for social lending.
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The world of banking has traditionally been one of monolithic institutions pushing services to the masses, but peer-to-peer lending is bringing a unique social twist to this slow moving sector. Consumers can now cut out the banks and lend to each other via commercial sites such as Prosper and Zopa.
A particularly exciting example of the power of ‘social finance’ is a non-profit organization called Kiva.org, which allows individuals to make small loans to low-income entrepreneurs in the developing world.
This use of P-2-P technology is simple yet empowering, allowing people in the developed world to easily support people who are striving to build a better future for themselves and their families. And because the money is invested in young business ventures, your cash can have a really meaningful impact on both the people you choose to help and the wider communities they live in.
By providing affordable working capital to someone building a long-term project, you’re also helping contribute to the local infrastructure – generating jobs and supporting useful community services. Recipients of your funding can put it to good initial use and then continue thriving long after the money’s repaid, so it’s a really sustainable way to make a difference.
An additional social feature of this type of microfinance is that you can read people’s profiles before deciding who you most want to help out and then track their progress with email and web updates. It’s a personalized experience that connects people from very different backgrounds around the world.
My own company, Wonga.com, lends £1 interest-free for every new cash advance we process and, the way we see it, you get a much higher return on your money than the interest paid by any bank account. If you have a minute, please check out www.kiva.org or join the Wonga lending team at http://www.kiva.org/team/wonga to see who we’ve helped and read some fascinating stories.
Errol Damelin is a global entrepreneur with start up experience on three continents. Errol loves building innovative businesses with inspirational people. With Wonga, he wants to responsively provide a genuine alternative to slow, rigid and long-term sources of credit.