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You, Too, Can Be a Banker to the Poor

Times columnist Nicholas D. Kristof on fighting poverty in the developing world with a click of your mouse.

OPINION features excerpts of pieces by columnists from the Op-Ed page and other sections of The New York Times. All columns from the last seven days are available at nytimes.com; Op-Ed pieces (by columnists and outside contributors), plus Editorials and Letters to the Editor, are at nytimes.com/opinion. Please let us know what you think of OPINION at upfront@scholastic.com.

One of the most popular ideas in the war against poverty is microlending—making small loans to poor people to start businesses and build a better life.

That's what I did recently. From my laptop in New York, I lent $25 each to a TV repairman and a baker in Afghanistan, and to a single mother running a clothing shop in the Dominican Republic.

I did this at Kiva.org, which provides information about entrepreneurs in poor countries—their photos, loan proposals, and credit history—and allows people to make direct loans to them.

You can browse, find a borrower who interests you, and then make a loan of $25 or more. These small loans are almost always repaid.

I recently visited two of my new business partners in Afghanistan.

On a muddy street in the capital of Kabul, Abdul Satar, a bushy-bearded man of 64, sat i-n the window of his bakery selling loaves of bread for 12 cents each. He was astonished when I introduced myself as his banker. He then paid me "interest" in the form of bread. It was delicious.

Abdul Satar borrowed $425 from a variety of lenders on Kiva, who besides me included Nathan in San Francisco; Cindy in Houston, and "Emily's family'' in Santa Barbara, Calif.

With the loan, he opened a second bakery nearby, with four employees. Now, when Abdul Satar buys flour and firewood, he benefits from economies of scale. (As production increases, the cost of producing each loaf of bread falls.) "If you come back in 10 years, maybe I will have six more bakeries," he says.

My other partner in Kabul is Abdul Saboor, who runs a small TV-repair business. He used the loan to open a second shop, employing two people, and to increase his inventory of spare parts.

Kiva works with a local lender in Afghanistan that finds borrowers and vets them. The local group is run by Storai Sadat, who was in medical school in 1996 when the Taliban came to power and ended education for women.

"Being a finance person is better than being a doctor," she says. "You can cure the whole family, not just one person."

Microfinance institutions like Sadat's typically focus on lending to women. But it hasn't been easy for Sadat to connect Afghan women with donors through Kiva: Many Afghans would be horrified at the thought of taking a woman's photo, let alone posting it online.

A young California couple, Matthew and Jessica Flannery, founded Kiva (which means "unity" in Swahili) after working in East Africa. They realized that a major obstacle to economic development was the unavailability of credit at a reasonable cost.

Americans are often suspicious of foreign aid and who it actually goes to. But groups like Kiva let Web surfers connect directly with grassroots projects abroad.

You may not have the chance to meet your borrowers as I did, but you'll still feel plenty of satisfaction being an aid worker yourself.