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Comment by goodside | Hacker News Reader

It's only slightly misleading to say Kiva lets you lend to small businesses, but downright false for RWW to say it lets you invest in them. If you can't get any return on the loan, it's simply not an investment.

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I think the return of investment is the difference you have made in the entrepreneurs' life. It provides a long term sustainable income for the poor people.

I think that is the purpose of micro-finance. http://en.wikipedia.org/wiki/Microfinance

It's not a zero interest loan, is it?

Lending is the most common form of investment, and it's comparatively safe. Equity investment is what's risky and dangerous (unless you get into junk bonds, or lending to bankrupt companies).

It's not a zero-interest loan, but the Kiva "field partner" pockets the interest, so there's no possibility of return. From their website:

"Lending to the working poor through Kiva involves risk of principal loss. Kiva does not guarantee repayment nor do we offer a financial return on your loan. "

What are the regulatory obstacles to running a business that does offer a small return? I have to assume there are some, no, or else you get loan sharks.

That's what Prosper was doing but the SEC forced them to temporarily stop lending and jump through more hoops.

http://www.techcrunch.com/2008/11/26/sec-outlines-its-reason...

I'm not sure where they sit now, but when you browsed Prosper you could find people requesting loans for business (not just personal items like cars).

Why is it slightly misleading to say it lets you loan to small businesses?

Because every other small business loan on the planet (that isn't between family members) involves interest and the possibility of profit for the lender. It's not necessarily the case, which is why I said "slightly" misleading, but it still needs to be pointed out much more often than it actually is in media coverage of Kiva. This might be partially because reporters are sympathetic to Kiva and don't want to say anything that would rain on their PR parade, but I think it's just as likely that the people reporting don't realize these loans are complete charity.

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