So we did it folks. We’ve donated a total of $1,950 to charities! Congratulations! After 39weeks of donations on behalf of others this campaign comes to an end. It started with me rolling the below list of coins. I then decided instead of donating all of these coins to one charity, I thought it would be of greater benefit if I split the donations up. I took it even further by deciding I would donate to causes suggested by others on their behalf. I figured if I could just get a few more people thinking about donating to worthy causes it would help. We tried to do as many Ottawa based charities as possible.

7,650 pennies
1,250 dimes
864 quarters
760 nickels
300 toonies (two dollar coins)
96 loonies (one dollar coins)
and misc amount of dollar bills I’d traded in for change over time.

Below you’ll see the final list of charities and causes that have been donated to. Originally we’d have ended at 34 weeks but this was extended by generous donation by the Chan family. So we’ve wrapped it up at 39weeks and $1,950 donated. Best wishes to all. – Ravi Shanghavi, Ottawa

-Ravi Shanghavi, is the CheapIndianGuy

Donations, and donations on behalf of.

1) Ituneskiller – $50 – Ottawa Food Bank
2) Nuria aka nuri787 – $51 – Canadian Cancer Society pledged to Julia Saltarelli-McCrea
3) Erika Saunders – $51 – Recyclore
4) DoctorPhil – $51 – Down Syndrome Association – National Capital Region
5) DJ Sinsear – $51 – Big Brothers Big Sisters of Ottawa
6) Margaret Sambol – $51 – Children at Risk Ottawa
7) Julia – $51 – NAAR – National Alliance for Autism Research
8 ) Norm O’Hara – $51 – Seva Foundation
9 ) Ravi Shanghavi – $51 – Hindu Temple of Ottawa Carleton
10) Darcy P. – $51 – Children’s Hospital of Eastern Ontario
11) Kishor Shanghavi – $51 – Save the Children: Cyclone Nargis
12) Henrik Schwerdtfeger – $51/Laptop – Martin Luther Kindergarten of Ottawa
13) D’Ermo Family – $51 – Conservation Halton Foundation In Memory of Matteo D’Ermo
14) Dan Lavine – $51 – Kids Help Phone
15) Deirdre Jorssen – $51 – Ronald McDonald House
16) Jalpa S – $51 – Jaipur Foot Camp
17) Mahesh Shah – $51 – Vishva Shakti Durga Mandir
18) Will Chan – $51 – Christmas Gift Exchange
19) Bill Murray – $51 – Multiple Sclerosis Society
20) Panthini Shanghavi – $51 – Feeding of poor street children in india
21) Bere H – $51 – War Amps of Canada
22) Amy Beck – $51 – Red Cross: Haiti
23) Ravi Shanghavi – $51 – Glebe apartment fire
24) Chris Doubt – $51 – Dick Aldridge Pancreatic Cancer Foundation
25) Sary M – $51 – UNICEF
26) Kajitha A – $51 – Children’s Aid Ontario
27) Brendan W – $51 – Ottawa Humane Society
28) Chantal F – $51 – Ottawa Regional Cancer Foundation
29) Diza W – $51 – Immigrant Women Services Ottawa
30) Mona T – $51 – Gloucester Emergency Food Cupboard
31) Bijal Dave – $51 – Parkinson Society Ottawa
32) Cassandra Q – $51 – Alzheimer Society of Ottawa
33) Ceaser R – $51 – Ottawa Boys and Girls Club
34) Lindsay Craig – $51 – Cancer Society Relay for Life
35) Carissa Chan – $51 – Ottawa Hospital Foundation
36) Sean Cooper – $51 – Ontario Society for the Prevention of Cruelty to Animals
37) Anand B – $51 – Canadian Liver Foundation
38) Robert A – $51 – Ottawa Dragon Boat Foundation
39) Carlos O – $51 – SchoolBox

Final Donation by Ravi Shanghavi of Ottawa

Relay for Life Donation - Ravi Shanghavi

This is a column by regular MDJ contributor Clark.

Kiva is a non-profit organization that offers an avenue for individuals to loan money to low-income entrepreneurs across the globe. FrugalTrader had written about the Kiva organization during its infant days and I think that it might be worth revisiting them again through my personal experience. The money loaned is used by the entrepreneurs to buy cattle, start/expand their grocery store or restaurant or for a host of other small businesses. Since these loans are given to the working poor, there is a risk of principal loss to the individuals (the lender) and Kiva does not guarantee repayment of these loans or a financial return on these loans. To put it bluntly, this is not a peer-to-peer lending investment vehicle like Lending Club or Prosper.

Why it works?

Kiva taps into the core beliefs that most human beings have generosity and empathy and underscores the fact that many poor people are willing to work hard and become successful, if presented with an opportunity. It should be noted that Kiva does not currently take any share of the interest rate charged by Field Partners and relies on voluntary lender donations, corporate partnerships and institutional supporters to run their operations. The entire structure depends on the collective efforts of (in no specific order) these support organizations, individual lenders, Field Partners and Kiva’s team of staff and volunteers. An examination of their statistics will offer an insight into their success till date. Please browse their Risk and Due Diligence page for each party’s role in sharing the risks.

The Entrepreneurs and their Interest Rates

Typically, poor people do not have financial assets to start a business on their own or use as collateral and may be illiterate (to fill out a loan application at the bank). They are prime candidates for falling prey to private loan sharks who charge exorbitant rates of interest and use the borrowers’ lack of literary skills to their advantage; usury is common among those circles. Banks do not provide microfinance products as it is not a commercially viable venture.

The entrepreneurs who get loans through Kiva still pay a high interest rate (but way less than that charged by their local private money lender). This is due to the fact that the costs of the money lent and loan defaults are correlated to the amount lent, while the costs of actual transactions take their toll too. According to CGAP,

“At first glance, a rate this high looks abusive to many people, especially when the clients are poor. But in fact, this interest rate simply reflects the basic reality that when loan sizes get very small, transaction costs loom larger because these costs can’t be cut below certain minimums.”

Kiva reports the interest rate charged by the Field Partner in terms of portfolio yield. The portfolio yield is not the exact cost of borrowing money for an entrepreneur. Instead, it is the total return for the Field Partner from its lending operations. Based on the type of loan, an entrepreneur may have an interest rate that is higher or lower than the portfolio yield for the Field Partner as a whole. Nevertheless, the portfolio yield seems to be a good measure of the average interest rate and fees paid by the entrepreneurs to Field Partners.

Based on Kiva statistics, the average interest rate and fees charged by Kiva’s Field Partners is about 36% (as of March 2010). You can find more information on the interest rates that Field Partners charge by navigating to the Field Partner pages, choosing the Field Partner that you would like to research and looking under the header “Borrowing Cost Comparison” on the lower half of the resulting page.

Choosing Entrepreneurs

How does one pick entrepreneurs to lend to? There is no denying that all entrepreneurs may be genuine since the Field Partners do their research and interview the borrower before posting their profile on Kiva. Nonetheless, circumstances may render a person unable to repay their loan. I think that there are two ways to go about it:

1. Treat it as a form of charity, albeit one where the Field Partner is bound to charge interest and benefit while providing an avenue for poor borrowers to uplift their own lives. If the loan is repaid in full, then another entrepreneur may benefit; else, if the lender is still willing and has the money, they could continue lending or find an actual charity.

2. Check the risk rating of the Field Partner and then lend. Field Partners serve as the face of entrepreneurs and the ability of entrepreneurs to repay their loans is reflected in the Field Partner Risk Rating that is given by Kiva staff. A Field Partner Risk Rating of five stars symbolizes lower risk and a single star indicates higher risk. The rating is governed by the evidence of the likelihood of a Field Partner repaying a loan, which is contingent on the entrepreneur’s ability as well as the Field Partner’s reliability.

My Experience and Thoughts

I wanted to test the waters and lent $25.00 in mid-Dec 2009. I chose the borrower based on the Field Partner’s risk rating and decided on one with a 5-star rating. The entrepreneur wanted a US$350.00 loan to increase the inventory for her home-based grocery business. Her loan was covered by 12 lenders (including me). Till date, I have received US$20.83 back in my account. The entrepreneur is on track to fully repay her loan, as originally slated, by June 2010.

Before deciding on an entrepreneur, I like to read about them to know a bit about their background. As an example, a single mother with three kids will get my attention than a couple with one kid. I understand that the number of kids alone may not be a true manifestation of a family’s situation but I believe that the higher the number of kids, the greater the chances that the elder ones will be (are being) pushed into the labor force to support the family. Maybe, the thousands of small contributions like mine will help them steer clear of that situation. This may not be the best way to make a decision but to each his own!

One aspect that could do with some streamlining is the free rein that the Field Partners currently have to set interest rates. I agree that their rates are still lower than that charged by the local money lenders but I find it tough to accept that some Field Partners need to have as high as a 53% portfolio yield to sustain their operations. The lenders, Kiva and the supporting organizations may treat this endeavor as a noble one but I wonder if the Field Partners got the message?

One Can Do More

In addition to lending money through their website, one can do other things to help Kiva in eradicating poverty. Please check out the various other ways through which you can spread the word and make a difference.

About the Author: Clark is a twenty-something Saskatchewan resident employed in the manufacturing sector. He repaid around $20,000 in student loans and has been working to build his investment portfolio as a DIY investor (not trader) while nurturing plans to retire early. He loves reading (and using the lessons learned) about personal finance, technology and minimalism.

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Copyright 2010 MillionDollarJourney – All Rights Reserved

Hiya! Ok just a quick fly by post on where I’ve been donating recently on behalf of others.  Below is a list of the organizations and the considerate who’ve requested donations on their behalf.   Please follow along on this journey at www.cheapindianguy.com !!

Cheers,

Ravi

-Ravi Shanghavi, is the CheapIndianGuy

Donations, and donations on behalf of.

1) Ituneskiller – $50 – Ottawa Food Bank
2) Nuria aka nuri787 – $51 – Canadian Cancer Society pledged to Julia Saltarelli-McCrea
3) Erika Saunders – $51 – Recyclore
4) DoctorPhil – $51 – Down Syndrome Association – National Capital Region
5) DJ Sinsear – $51 – Big Brothers Big Sisters of Ottawa
6) Margaret Sambol – $51 – Children at Risk Ottawa
7) Julia – $51 – NAAR – National Alliance for Autism Research
8 ) Norm O’Hara – $51 – Seva Foundation
9 ) Ravi Shanghavi – $51 – Hindu Temple of Ottawa Carleton
10) Darcy P. – $51 – Children’s Hospital of Eastern Ontario
11) Kishor Shanghavi – $51 – Save the Children: Cyclone Nargis
12) Henrik Schwerdtfeger – $51/Laptop – Martin Luther Kindergarten of Ottawa
13) D’Ermo Family – $51 – Conservation Halton Foundation In Memory of Matteo D’Ermo
14) Dan Lavine – $51 – Kids Help Phone
15) Deirdre Jorssen – $51 – Ronald McDonald House
16) Jalpa S – $51 – Jaipur Foot Camp
17) Mahesh Shah – $51 – Vishva Shakti Durga Mandir
18) Will Chan – $51 – Christmas Gift Exchange
19) Bill Murray – $51 – Multiple Sclerosis Society
20) Panthini Shanghavi – $51 – Feeding of poor street children in india
21) Bere H – $51 – War Amps of Canada
22) Amy Beck – $51 – Red Cross: Haiti
23) Ravi Shanghavi – $51 – Glebe apartment fire

Hiya folks, so thought I’d drop a line about where I’m at with cause. Recently I’ve made the below donations on behalf of those listed.  This week I’m working towards donating a laptop to a children’s day care, this can be attributed to Henrik Schwerdtfeger.  This wouldn’t have been possible without the efforts of Rob Alliman who helped me take part in a United Way raffle which allowed me to win this laptop.  The plan was to buy x number of raffle tickets based on the odds calculated from the number of devices available to be won.  Then donate the one laptop, and sell the rest for profit which would increase the total amount of money I will be donating.   The plan wasn’t as successful as I’d hoped but I will be able to make good on my promise to donate this laptop to the daycare.

You’re welcome to visit my site www.CheapIndianGuy.com and leave comments and suggestions.

-Ravi Shanghavi, is the CheapIndianGuy

Donations, and donations on behalf of.

1) Ituneskiller – $50 – Ottawa Food Bank
2) Nuria aka nuri787 – $51 – Canadian Cancer Society pledged to Julia Saltarelli-McCrea
3) Erika Saunders – $51 – Recyclore
4) DoctorPhil – $51 – Down Syndrome Association – National Capital Region
5) DJ Sinsear – $51 – Big Brothers Big Sisters of Ottawa
6) Margaret Sambol – $51 – Children at Risk Ottawa
7) Julia – $51 – NAAR – National Alliance for Autism Research
8 ) Norm O’Hara – $51 – Seva Foundation
9 ) Ravi Shanghavi – $51 – Hindu Temple of Ottawa Carleton
10) Darcy P. – $51 – Children’s Hospital of Eastern Ontario
11) Kishor Shanghavi – $51 – Save the Children: Cyclone Nargis

Pop over to CheapIndianGuy.com to see week 7’s donation!

-Ravi Shanghavi

Week 6 wraps up with a Donation to Big Brothers Big Sisters of Ottawa.  Take a peek.

Donations, and donations on behalf of.

1) Ituneskiller – $50 – Ottawa Food Bank

2) Nuria aka nuri787 – $51 – Canadian Cancer Society pledged to Julia Saltarelli-McCrea

3) Erika Saunders – $51 – Recyclore

4) DoctorPhil – $51 – Down Syndrome Association – National Capital Region

5) DJ Sinsear – $51 – Big Brothers Big Sisters of Ottawa