WisBusiness: Third-world microfinancing is focus of Fluno Center gathering

By Brian E. Clark
WisBusiness.com

One hundred dollars isn’t a great deal to Matt Messinger, a 30-year-old professional who works for Renaissance Learning in Madison.

But to the Ugandan timber farmer to whom he made a no-interest loan, that amount of money is huge.

Messinger, who is working with an organization called Kiva.org, would like more people to know about this new micro-finance group, which is helping tiny businesses around the globe.

He said Kiva.org – which is based in Northern California – will hold a fundraiser starting at 5 p.m. Friday at the Fluno Center, 601 University Ave. The suggested donation for the event is $20, or $15 for students. All proceeds from will benefit Kiva.org, a registered 501c3 non-profit organization.

The evening will feature a panel discussions of three Madison business leaders, plus Premal Shah – president of Kiva.org and a college classmate of Messinger’s from his days at Stanford University.

The Madison business leaders are John Neis, managing director of Venture Investors of Wisconsin; Mohan Warrior, CEO of Alfalight; Toni Sikes, CEO of The Guild. Tom Eggert, adjunct professor at the UW-Madison School of Business, will serve as moderator.

Messinger said the panel will discuss social entrepreneurship, focusing on how local business leaders and new technology are allowing organizations to do good while doing well.

He noted that microfinancing got a considerable amount of positive publicity late last year when former economics professor Muhammad Yunus and the Grameen Bank in Bangladesh won the 2006 Nobel Peace Prize for their work to alleviate poverty.

The seeds of the Grameen Bank go back more than 30 years. Yunus, then teaching at Chittagong University, wanted to ease some of the suffering that accompanied a famine plaguing his country. In the nearby village of Jobra, he met a group of women who wanted to start their own businesses but lacked the money or collateral for a traditional bank loan. He added up what they needed and lent them $27 out of his own resources.

Since then, Grameen Bank has made loans of $5.3 billion to more than 5.3 million impoverished borrowers. Nearly all of the loans have gone to women.

Closer to home, the World Council of Credit Unions here in Madison got nearly $9 million in aid in 2006 from the Gates Foundation to set up credit unions in the Third World to make micro-loans.

Messinger said he sees the $100 he provided to the Ugandan timber farmer as a “partnership between the lender – me – and an entrepreneur.

“I made the loan back in August and fully expect to be repaid. It’s a great way to help with development through a program – Kiva.org – that people have described as something like microfinance meets match.com.”

Messinger said would-be bankers can go to the Kiva.org Web site and see a listing of small entrepreneurs from around the world and learn about their ventures.

“It might be everything from a woman in Kenya who wants to start a nail salon to man in Mexico who wants to improve his fruit cart to someone in Ecuador who wants to open an auto parts shop,” he said.

Messinger said individuals can loan amounts as small as $25 and Kiva.org will aggregate or group the money so that 16 relatively small loans could total $400 – a significant amount in the Third World.

“Kiva puts the money together and then works with microfinance partners in the individual countries,” he said. “The loan terms are usually about 12 to 18 months and people like me can track the success via journals posted through the microfinance partners.

“Kiva is the platform and is helping get small loans to people who need it,” he said. “It has lending partners in 20 countries who have the infrastructure on the ground to get cash to entrepreneurs to grow their businesses, and also track and post journals so we can learn what is happening back here.”

Messinger said Premal Shah was a successful businessman with PayPal.com before helping found Kiva.org. Others who work with the group include former employees of eBay/PayPal, TiVo, Google and MySpace, among others.

To register for the event, sign up online at http://webpages.charter.net/rswiii/main.html. The fundraiser is being sponsored by the International Professionals Association of Madison. For more information, please contact Messinger at matt.messinger@kivavolunteers.com.