Monday Jun 18, 2007

Microloans and Information Capital

On a sweltering June day in 1999, a few of us from the Sun Microsystems Somerset, NJ office attended the Rising Tide Summit, hosted by Silicon Alley Reporter editor and bubble boy Jason Calacanis. It was intense, even for an event in the frenzy of the dot-com boom. I have only two memories that have survived the post-boom memory contraction: I met BoingBoing editor Xeni Jardin in the basement, when she was both a Hamm and writing for SAR. That has only come up once in conversation since. The more lasting impression was Nancy Barry of Women's World Banking, who spoke about bootstrapping economies through microloans, offering startup capital to labor-intensive, often women-run and home-based businesses, with reasonable payback periods and interest rates.

It was that talk that started my periodic purchase of a cup of coffee for homeless people sitting outside on cold winter days. If I can spend $5 on multiple Dunkies visits, I can also spend a buck or two to keep someone warm. Microgiving. I joked at times that an "I Give A Buck" campaign, aggregating and distributing those dollars, would be feasible. Muhammed Yunus won the 2005 Nobel Prize in Economics for proving that microcredit is both effective and a real concept.

Thanks to , I have discovered Kiva.org, an online microcredit aggregator and facilitator that delivers on all of the above.

Kiva is a great example of what Sun calls bridging the Digital Divide. It's not about moving large sums of money, but moving practical sums of information to those most in need. A $100 million budget doesn't help someone who needs $300, if the money can't be delivered in local currency on short notice. Matching the source of $300, possibly from a dozen sub-$50 lenders, to the borrower is an informational problem; that's the digital divide in real-world, proper-sized granularity. Information is capital, in the sense that it can be used to create value, has forward and time value (both decreasing) and can be exchanged. And information is the capital for the digital divide.

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Hal Stern's thoughts on software, services, cloud computing, security, privacy, and data management

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