Micro Lending: Socially Responsible Investing

Micro-Lending History
Kiva is a program which allows lenders normal people to donate to people through something known as micro lending. The basic idea is to loan people who are struggling to get by money for capital and working capital (operating costs). It is considered "micro" because the loans are typically under $1000 and can be as low as $100. For many in the world who earn less than $1/day this is significant amount and can be enough to start their own business. The founder of the Grameen Fund Muhammed Yunnus recently won the Nobel Peace Prize for his work in microcredit. You can find more information about micro finance credit on Wikipedia: Microcredit

How does Kiva work??
Kiva acts as a portal and lets lenders donate to the organization which is funding the people requesting the loans. According to the Kiva website here are the steps that are taken:

1. Lenders pick a business and make a loan using their credit card
2. Kiva transfers funds to local partners. Partner disburses loans to each business
3. Over time, partner collects repayments and provides business updates at kiva.org
4. Funds are returned to lender. Kiva lender may withdraw or re-loan.

Kiva FAQ

Micro Place:
As I was doing research on Kiva and other Microfinance sites, I found one called Micro Place which offers people the opportunity to invest in a security which would then make this money available to the organizations that lend money out. You can essentially buy a bond that is backed by a company which has varying maturities (1-4 years) along with interest rates from 1-3%. Micro Place would be only an option only for those people who didn't have any problems with making money off loans made to poor people.

Criticism of Micro Lending:
It should be noted that Kiva and (to my knowledge) all other microcredit organizations charge interest on the loans that they give. There has been criticism of the micro-lending process. The interest rate can be 30-50% a year depending on the country. Additionally, there have been reports that certain people take out additional loans to pay back their previous loans, similar to what many poor people in the United States are forced to do once they are trapped in a cycle with Pay Day lending. One advantage that Kiva has, is that it is transparent and the lenders know who the money is going to and how the money is being spent.

Conclusion
I still believe that as a whole, microlending can provide benefits to many poor people in the world. There is the possibility of trapping users into a continuous cycle of loans to pay off the previous loan's interest. However, Kiva is transparent and allows the lenders to see exactly who the money is going to and how it is being spent. If you see any cases where it is apparent that the borrower is getting another loan jut to pay off the interest in the previous loan, please withdraw your money from that organization.

Any loss in transparency (as with buying a bond and investing in a micro-lending organization which then dictates who the loans are given to) could potentially lead to abuses by the lender authorities. Although earning interest offered by Micro Loan is enticing, the lack of transparency is a significant problem for me and I would not feel comfortable knowing that people might be taken advantage of.

I will definitely have to research this topic more to understand it more. I plan to read the books that I've listed in the recommended reading.

My New Gift:
Despite the potential problems with microlending I still believe it is a good cause and will support it. In today's world there is so much emphasis on material wealth particularly around the holiday season. But how many times have you received something material for your birthday or Christmas but absolutely hated it and never used it? I can't count the number of horrible gifts I've received in my life but here are a few examples:

• Hanson - Middle of Nowhere CD (I still have the CD shrink-wrapped and maybe it will become a collectible in the future.... just maybe)
  
• Hooded sweatshirt with pockets on the back (why would you need pockets in the back... unless you're inviting someone to feel you up)
  

From this point on, unless I know that a person specifically wants a certain gift and will be 100% happy with it, I will only be giving them Kiva gift certificates or other forms of socially responsible investing. This gift has virtually no environmental impact because you can pay with a credit card and send a printed gift certificate (or better you can just send them an email). Even if they don't like the idea of the gift, a borrower will be funded and the gift receiver will eventually get the cash back. It is a great cause and it really does improve people's lives.

If you have an extra $25 that could go to charitable causes, think about socially responsible investing and lending that cash to Kiva.

Recommended Links

• Kiva
• Micro Place
• Grameen Bank Information

Recommended Books

• Banker to the Poor: Micro-Lending and the Battle Against World Poverty - Muhammed Yunnus
• The Economics of Microfinance - Beatriz Armendáriz
• The End of Poverty: Economic Possibilities for Our Time - Jeffrey Sachs
  

My Decision to Become Vegetarian

Background
School is definitely not the best environment for healthy eating. I ate out at least once a day with most of those meals being really unhealthy cheap and greasy foods. It's not surprising that I was overweight and always feeling tired because of my eating habits.

After I graduated in June, I actually had time to start cooking for myself and eating healthier. I have to say that my primary goal was NOT to diet and lose weight, but instead to eat healthy. If I lost weight in the process, then it would be an added benefit.

My Steps
I didn't go on a fad diet, but began to eat things that every parent tells their children to eat more of. I increased my consumption whole grains, fruit, and vegetables and eliminated almost all soft drinks, candy, and anything that had high fructose corn syrup in it.

The initial results were pretty astounding. I lost over 30 lbs over the period of 3 months, going from 180 to under 150. The amount of exercise didn't change during this period and was pretty much limited to walking around. The biggest thing I noticed was that I had a lot more energy and didn't have to periodically take naps to get through the day. By this point, I was pretty much only eating meat when I went out to restaurant with friends, which was about twice a week.

After Thanksgiving I finally decided to become a vegetarian. At the time I decided that I would become a pescatarian (fish, dairy, and eggs were allowed). After a few weeks, I noticed that the only fish I ate was when I had sushi with co-workers for lunch. In light of this, I decided to all meats and become a lacto-ovo vegetarian for the reasons listed below. The information below was found in "The Food Revolution: How Your Diet Can Help Save Your Life and The World" by John Robbins.

My Reasons For Becoming Vegetarian

1. Eating animal products has a tremendous environmental impact
1. 16 pounds of grain are required to create 1 lb of beef
2. More water/pesticides/fertilizers are required to grow the grains that are fed to the animal.
3. Animal waste such as methane from cows and fecal matter from pigs contribute significantly to climate change and water pollution respectively.
   
2. Eating animal products can be bad for your health
1. Studies show that vegetarians live on average 6-10 years longer than meat eaters
   
2. Vegetarians on average have lower blood cholesterol levels and blood pressure
3. People on plant based diets have lower rates of breast, lung, prostate, and colon cancer

There is of course also the aspect of factory farming and cruelty to animals. However, for me, the most important reasons why I became a vegetarian are related to environmental impact and health. The benefits of eating fewer animal products are twofold: You can improve your health and reduce your environmental impact at the same time. I will be posting a review of John Robbin's book "The Food Revolution" in the near future with more details about health and environment.

I plan to go vegan (no animal products at all) soon and I will keep you updated on my progress on that. It definitely won't be an easy road, particularly when I go out to restaurants. However, I believe it is one worth pursuing for my own health, and the health of the environment.

Recommended Books:

• The Food Revolution: How Your Diet Can Help Save Your Life and Our World - John Robbins
• The Ethics of What We Eat: Why Our Food Choices Matter - Peter Singer

Recommended Movies:

• The Future of Food
• Green Genetics

Resources

Don't know where to find information? The pages linked below will give you a good sources to learn more about the subjects of this blog.

Recommended Books

Recommended Movies

Am I ready for Peak Oil?... Absolutely not

Today just after I had just finished grocery shopping, the power went out completely in the parking lot and the surrounding area. My roommate and I drove past our apartment complex and no lights were on except the emergency stairwell lights.

We wanted a warm meal so we decided to drive a few miles to get some food at a restaurant. After waiting about an hour, we drove back and found that the power was still out. We had some perishable foods, so we decided to go into the apartment and store those away.

There were a few emergency lights for the building and luckily one of the elevators was functioning (I live on the 11^th story of my building). I met a woman in the elevator who told us that we also didn’t have any water.

This really surprised me, because when the power went out when I lived with my parents, we would always have heat with the gas furnace and running water. I thought to myself and wondered why we didn’t have running water because a power outage shouldn’t really affect the water pipes. But then I realized that because our building was so tall, it probably needs pumps powered with electricity to get the water pressurized enough to flow to the higher floors.

I thought that the water supply would be independent of oil/energy but I was proven wrong. Even people who live in houses who don’t need a pump to pressurize the water are reliant on water utilities to create enough pressure to deliver it to their houses.

What have I learned from all of this? I am not in any way prepared for peak oil. I’m not even prepared for a mild disaster with a 3 days supply of food/water. I don’t have any backup batteries and only had a flashlight because my dad left it here when he helped me moved down. I don't have any source of heat without electricity or any emergency

So what are my next steps?

• Get a small supply of non-perishable food and a few large jugs of water.
• Get spare batteries and flashlights
• Get a solar/hand-powered radio
  

You would think that volunteering for the American Red Cross for over 4 years would be enough time to actually get a disaster kit, but apparently not!

Although these won’t prepare me for the “Long Emergency”, at least they will be small steps in the right direction.

Related Links:

• The Party's Over - Richard Heinberg: Book Review
  
• American Red Cross Store
  

Recommended Books:

• The Long Emergency: Surviving the End of Oil, Climate Change, and Other Converging Catastrophes of the Twenty-First Century - James Howard Kunstler
• The Party's Over: Oil, War And The Fate Of Industrial Societies - Richard Heinberg
  Review
  

Recommended Movies:

• The End of Suburbia

Recommended Movies

Below are the recommended movies for each major category. I have personally seen every one and whole-heartedly recommend them. The list is sorted in order of importance (in my opinion).

Some of the more popular movies have become mainstream and can be found at Blockbuster or Netflix. Unfortunately, most of these movies don't have major labels and you might need to buy it from the producers directly. I've linked the movies to Amazon (if available) or to the producer's website.

If possible, hold screenings of the movies for your friends (Please check with the producer to see if this is allowed/legal). I personally think that movies are a great way to introduce friends into the topic because it only requires a 1-2 hour investment.

Corporation

• The Corporation
• Enron: The Smartest Guys in the Room
• Walmart - The High Cost of Low Price

Credit/Debt

• Maxed Out
• America: Freedom to Fascism
  

Environmentalism

• An Inconvenient Truth
  
• The Future of Food
• Who Killed the Electric Car?

Media

• Independent Intervention
• Outfoxed - Rupert Murdoch's War on Journalism
• WMD: Weapons of Mass Deception

Peak Oil

• The End of Suburbia
• The Power of Community: How Cuba Survived Peak Oil
• A Crude Awakening - The Oil Crash