A Little Spray and Pray

The title refers to the practise of angel investing by those wealthy enough to provide seed capital to start-ups too small to obtain same from venture-capital firms. The small investments made by the aforementioned angels are referred to as a "spray and pray" strategy that more than makes up for any risk taken should the start-up meet with success and allow them to realize a fortune before shares go public. Of course, if this happens, it seems to me that the angel's halo might be said to slip just a little off centre. After all, if you look to profit by your good-doing, aren't you really nothing more than a risk-taking, mere mortal businessperson?
Semantics aside, I was glad to read, in December 2010, that Grameen Bank founder, Nobel Peace laureate Muhammad Yunus, has been cleared by the Norwegian government on charges that the Grameen Bank in Bangladesh had wrongly diverted aid cash. A documentary recently made by Danish filmmaker Tom Heinemann had alleged that Yunus had siphoned nearly $100m of Norwegian aid off from Grameen Bank to Grameen Kalyan, a branch not involved in micro-credit.
A spokesman for the foreign ministry in Oslo said that the matter had been thoroughly investigated and that "We are fully satisfied that no Norwegian money is missing or unaccounted for ... Again we wish to stress that there is no indication that Norwegian funds have been used for unintended purposes, or that Grameen Bank has engaged in corrupt practices or embezzled funds."
The Prime Minister of Bangladesh, Sheikh Hasina, says that microfinance has failed to lift people out of poverty and that credit on loans is charged at an usurious rate. While this may be true in some instances, it is not universally the case. Yunus and his Grameem Bank were awarded the Nobel Peace Prize in 2006 for a reason and I doubt that it would have been for charging exorbitant interest rates. The problem is that so many who have jumped on the microfinance band wagon have done so with the sole intent of lining their own nests and some even send out thugs to use violent means to collect payment. Unfortunately, Yunus and his ilk have no control over such reprobates who sully the image of microfinance, but even as some take immoral advantage of the loan-seeking poor, Yunus maintains his original intent of acting as a banker to the underprivileged. He continues, for instance, with his bank's policy of rescheduling loan repayment in times of natural disaster. That, to me, seems to bespeak a halo that is still firmly in place, front and centre. Learning about Yunus and his Grameen Bank first inspired me in 2005, and continues to do so to this day. It is because I live in the privileged conditions granted to so many of us who dwell in the western world that the idea of taking part in microfinance appeals to my sense of what is the right thing to do.
A while ago, upon seeing my efforts to spread the word about the idea through my posts, a friend gave me the gift of money to loan through Kiva, an organization akin to the Grameen Foundation. Immediately, I made that first loan, and I was hooked. I have to date made twelve loans through Kiva to third world entrepreneurs, in my own little spray and pray strategy. In spite of what Sheikh Hasina and other naysayers may claim about its supposed failure, I believe in microfinance.