Article on giving money to extreme poor.

[Wisconsin Beth]

Here's a link to an article on Slate about a program that simply gave a lump sum to people in an extremely poor section of Uganda.  Apparently 4 years after being given the money, the people who rec'd it were generating 41% more income than before getting the money. 

www.slate.com/articles/business/moneybox/2013/05/unconditional_cash_transfers_giving_money_to_the_poor_may_be_the_best_tool.html

[whoisjohngalt]

I didn't understand - were those poor people in US or Kenya?

Bc if they were in Kenya - I believe it 100%.  If in US - don't believe it for a second

[Wisconsin Beth]

Kenya.  NOT the US

[movingforward]

I skimmed the article so might have missed it but I didn't see what criteria they used when selecting candidates.  Of course, if you select candidates who have a better aptitude with investing and dealing with money they are going to be better off.  It doesn't sound like they just gave it to random poor people which could definitely change the outcome.

[Tiny]

May 29, 2013 12:51:42 GMT -5 movingforward said:

I skimmed the article so might have missed it but I didn't see what criteria they used when selecting candidates.  Of course, if you select candidates who have a better aptitude with investing and dealing with money they are going to be better off.  It doesn't sound like they just gave it to random poor people which could definitely change the outcome.

It was a random group choosen from all the people who applied for the money.   The people weren't 'investing' as we think of it - they are/were subsistent farmers.   The article hinted that the young people who got the lump sum, no strings attached money used that money to become skilled at a trade:  carpentry, hairstylist, metalworker, etc  

It kinda makes sense expecially when you think about the fact that they are 'subsistent' farmers.   Anything at all that has long term effects (an animal that they can use byproducts from - wool? milk? eggs? - or an easier way to irrigate their crops (versus women/children lugging buckets of water) or the chance at an education (to learn a trade)  would potentially make their lives better - over the long term. 
 
Of course, I'm sure it helps if the country they live in is experiencing a time of 'peace' - since any miltary upheavals could quickly set back much of the improvements.

[Wisconsin Beth]

But they'd still have the skills and in theory could set up shop again. 

It was an interesting experiment, in my opinion. 

[zibazinski]

My aunt contributes to an organization that makes small loans to women. She's been using the same 250 bucks for years now. I do heifer international. I believe in hand ups not hand outs. Handouts never solves any problems but creates more.

[Plain Old Petunia]

May 29, 2013 14:16:28 GMT -5 zibazinski said:

My aunt contributes to an organization that makes small loans to women. She's been using the same 250 bucks for years now. I do heifer international. I believe in hand ups not hand outs. Handouts never solves any problems but creates more.

   You're describing Kiva.

kiva.org

[haapai]

It's a fascinating article, but it downplays the prior instability of the area too much.

If you follow the link to the abstract, you will discover that these cash infusions were made in an area that was until quite recently, very unstable.  (They were also twice as large as the Slate article implied.)

The instability had probably wiped out most of the existing small businesses and the capital of the existing tradespeople. 

That unusual vacuum probably made those who received capital infusions unusually successful (lots of unfilled demand, little competition).  This may be a better model for reconstruction than poverty alleviation. 

[garion2003]

I've been lending on Kiva for a while now. I do small loans, 25$ at a time. Probably have 125 out circulating currently, been paid back on a few loans and use that to relend. Haven't lost any money yet.

[movingforward]

May 29, 2013 17:49:53 GMT -5 Plain Old Petunia said:

May 29, 2013 14:16:28 GMT -5 zibazinski said:

My aunt contributes to an organization that makes small loans to women. She's been using the same 250 bucks for years now. I do heifer international. I believe in hand ups not hand outs. Handouts never solves any problems but creates more.

   You're describing Kiva.

kiva.org

Just checked out the website.  Very interesting... I like the concept a great deal.  Thanks for posting it.

[zibazinski]

I like it and she likes it because it is usually women who end up working to support their family. I'd do it but I'm a huge heifer fan so I'm committed there.

[Nazgul Girl]

    I've contributed to Heifer International and also to Kiva, and have been happy with both.   At the moment, we're contributing to two area food banks, and the occasional disaster relief fund, such as the one for NYC relief for Sandy victims.   I think it's time for me to make a Kiva loan. 

    Okay, I just loaned a 51 year old lady in Georgia ( Russian Georgia, not U.S. Georgia ) $ 25 to buy farm animals to increase the produce that she and her family will have available to sell.   

    Anybody else ?   Share your stories here.   I'm very interested.

[movingforward]

I just loaned the last $25 needed to a lady in Bohol to purchase ingredients for her home-cooked food business.

[Nazgul Girl]

   Cool.   Hopefully our loanees will do well.    I tend to pick farmers, for some reason.   Must be my good Scottish/Canadian farming background.   That's why I like buying chickens, ducks and goats for Heifer International recipients as well.

[motherto2]

Kiva sounds interesting - will have to give it a look.  I love the idea of donating to a small business that could really use the help.  Thanks for the info!