Rickety Kiva Map

Kiva Map showing Rickety micro finance loans over the globe
Kiva, back on July 23, announced Kiva Maps. To show you what it looks like, consider my own Rickety Kiva Map above. Each of the leaves represents one of my loans all emanating from Kaysville. Neat huh? It is just a Google map so you can zoom in for more detail. In Cambodia I have a number of loans as you can see in the detail map.
Kiva Map in detail showing Rickety Cambodia loans
Every day over 16,000 people all over the world are viewing Kiva. Kiva Maps also uses the Google Maps API on each Entrepreneur Profile page to show the geographic distribution of lenders to that Entrepreneur. Check it out by clicking “Map View” in the “Lenders to this Business” section.

Kiva did experience some problems shortly after going live with the feature. There were some Internet Explorer issues (as usual), and they also ran up against Google’s limit of 15,000 geocoding requests per day very quickly. Seeing Kiva laid out on a map will show how big this thing really is and encourage even more people to participate.

Below is the geographic distribution of lenders for one of my borrowers, pardon me, one of my entrepreneurs. Picks me right out in little old Kaysville.
Kiva Map showing Kiva entrepreneur linked to Rickety in Kaysville

Related Posts: Kiva

A Property Tax Alternative: The Home Consumption Tax

Jake pursues Daniel across the lawn for non-payment of property taxes.

Big Tax Increases

Last year my property taxes increased from $740.06 to $938.13, an increase of 26.76%. This year my taxes were raised to $1,062.94, an increase of 14.22%. So over the last two years the increase is an enormous 44.8%. As a software developer you might think my pay increases would counter this raid on my bank account. Really? 2006 saw a 3.8% raise and 2007 delivered a 5% pay cut. Additionally, in 2007 my wife switched from full-time to part-time work. Before kind hearted soul you rushes to send me a check I hasten to add my finances are in very good shape.

Property Tax Defects

If my property taxes seem low I must point out dear reader that compared to other states they are indeed low but in Utah we have a lot of other taxes to pay. My property taxes are in line with what my neighbors pay. So rather than write a post that only complains, I would like to propose a solution. But first let us look at the defects in the current system:

  • Assessments are hard to kept current.
  • Large increases in property values bring government tax windfalls.
  • Property improvements without a permit escape taxation.
  • The burden is on the homeowner to prove false an over valuation.
  • You can lose your home if property taxes are not paid.
  • A bureaucracy is needed to run the program.

I am sure you can think of some more problems with the way property tax is administered.

No More Property Tax

I sound like a campaigning politician with my No More Property Tax mantra. But consider that the quickest way to reduce cost is to cut out the overhead and/or simplify the process. The taxes must be collected so the key is to use an existing system of collection. Now it would seem fair to tax on something related to the property. In addition the tax should fall a little heavier on those able to pay.

Home Consumption Tax

Any heading that has Tax in it is not a very pretty sight. Nevertheless, as a separate line item on your utilities will appear a Home Consumption Tax or HCT. These are the utilities that will have the HCT:

  • Electricity
  • Water (excluding secondary water)
  • Garbage
  • Natural Gas

I was tempted to add phones to the list but they are heavily taxed already, and VOIP phones would avoid the tax. Besides, phones consume very little resources. Each of the items in the list can have a different tax rate if desired. Also the option to exempt from HCT the first $20 of say, electricity and natural gas could be implemented, thus helping the poor.

Summary

  1. We have scrapped an inefficient system.
  2. Utilized an existing collection process to fund county government.
  3. Based our new HCT on consumables that are billed monthly instead of yearly.
  4. Significantly reduced the chances of home loss through non-payment of taxes.
  5. Eliminated huge tax windfalls.
  6. HCT assessments are automatic and accurate down to the last drop, amp, and BTU.

Well, my friends, pick holes in my proposal but don’t tax me too much with your contrary insights. I do believe my HCT would work rather well.

My Experience with Prosper

Prosper Logo

Two months ago I funded my Prosper account with a few hundred dollars. Prosper connects those seeking a loan with lenders. Risk of default from rickety borrowers can be spread out by investing only $50 per loan. The interest rate is determined by lenders bidding the rate at which they are willing to loan.

When I am searching for loans to bid on I check off the homeowner box and select a B or higher Prosper credit rating. I allow any debt-to-income (DTI) ratio in the search. I then sort on hours left for bidding and select prospects with interest rates 10% or higher. I find the better the credit rating the lower the risk. The correlation is amazing.  I look for lower requested dollar amounts to be borrowed and those that need the money for credit card debt consolidation or for their business. Currently my lending is earning 17% but I am allowing for 7% of this to be defaults which will give be a net return of 10%. I shall not grieve though even if my net drops to 3%.

One can join a Prosper group and pick up tips on possible candidates for loans. I have loaned to a business borrower, based on a group tip, who had an E Prosper credit rating. I am rewarded with a return of 30% which bumps up my average return. I recommend you don’t have too many of these in your portfolio because of the risk of default.

[Read more…]

Kiva

Lend to the poor all over the worldKiva is the world’s first person-to-person micro-lending website, empowering individuals to lend directly to unique entrepreneurs in the developing world. I started using Kiva last year.

When you browse entrepreneurs’ profiles on the site, choose someone to lend to, and then make a loan, you are helping a real person make great strides towards economic independence and improve life for themselves, their family, and their community. Throughout the course of the loan (usually 6-12 months), you can receive email journal updates and track repayments. Then, when you get your loan money back, you can relend to someone else in need.

Kiva partners with existing expert micro finance institutions. They are experts in choosing qualified entrepreneurs. That said, they are usually short on funds. Through Kiva, partners upload their entrepreneur profiles directly to the site so you can lend to them. The power of the internet is used to facilitate one-to-one connections that were previously prohibitively expensive. Kiva creates a interpersonal connection at much lower costs due to the instant, inexpensive nature of internet delivery.

You can personalize a web page on Kiva, here is mine.

Articles about micro finance:
The Six Lessons of Kiva
Fight Poverty With Online Microlending
Business Lessons from Kiva
eBay’s New Direction: Micro-Finance