|silver band 'Aesthetic Peru' by Adrian Miranda|
Yesterday I posted a great giveaway from Novica.com. On 2/23 one lucky reader of this blog will be randomly selected to receive a $50 gift certificate to this terrific online shop. (If you haven't entered the random drawing yet, after this post click back a day for details).
Novica is a very interesting company. One of their goals is "to completely re-invent the way that artisans sell their handcrafted treasures." To do this they connect the customer to the artisan without a bunch of middlemen. They have offices in Africa, Asia and Latin America & have partnered with the IFC Worldbank, National Geographic and others to fulfill this mission.
|this graphic & all images in this post are courtesy of Novica|
Another way that this company supports crafts-people is through 0% micro-loans. The artisans use these loans to purchase supplies, tools or other services needed to expand their small businesses.
Where does the funding for these loans come from? Regular folks like you and me. I went to microfinance.Novica.com, found out more about the process and looked through a list of creative people in need of small loans. They explain what they will use the funds for, plus share a bit about themselves and their craft on the Loan List page. To the right of each name, you will see the size of their request, as well as how much still needs to be collected. There is also a button to click when you find someone that you want to help out.
I ended up contributing to 2 micro-loans. Adrian Miranda is a jewelry designer /silversmith located in Peru. He has new designs in mind that he wants to play with and is needs new tools and materials. Click on his name to read about this artist. If you want to see his pieces currently available, look here.
|onyx waterfall necklace 'Night Rain' by Adrian Miranda|
My second small loan was to leather-jewelry designer Nueng Pakdee from Thailand. (You can see his pieces here). I was drawn to his bio as much as his bracelets. I also noticed that he was very close to reaching his funding goal of $350. Hours later, I noticed that a few more people got on board today and now this fellow's loan is fully funded!
So here is what happens next:
(1) This artisan will pick up his $350 loan from the Novica office in his region. He will use it to try and expand his business. In Mr. Pakdee's loan request, he stated his need to hire an assistant as well as to purchase leather in larger quantities (to get better pricing).
(2) Over the next 6 months he will pay back the full amount of this no-interest loan. Each time he makes a payment, the lenders' accounts will be credited. At any time, I can check the loan activity in the Artisan Loans section of MyNovica. The repayments to my part of the loan will appear in the Credit Balance column on that page. The other lenders & I will receive an email update once he has repaid the loan.
(3) I can access my Available Loan Credit at anytime. I can withdraw it, make another loan with it, or purchase a handcrafted item from Novica. If I buy a piece from the site using available loan credit, Novica chips in a 15% bonus balance towards my item purchase. Additional options include gifting a loan or helping to fund a new region that this company is moving into. For details click here.
Now, there is no guarantee that a borrower will not default on a loan. If that happens, I wont get my money back... But I have a great deal of faith in people. I think most people just want to improve their lot in life while fulfilling their creative dreams. (Also most will want to keep in good standing with Novica by repaying their loan in a timely fashion. )
|leather wristband bracelets 'Reggae Sway' (pair)|
I also think it helps that these are 0% interest loans. Having no interest makes repaying the loan seem realistic. There has been negative press about micro-financing the last couple of years, mainly because of the obscenely-high interest rates charged by some other small credit lenders. I remember this 2010 article in the New York Times that had me questioning the viability of this type of lending system.
Why charge no interest on a loan? On their FAQ page, the folks at Novica state: "If we're receiving 0% funds from customers and lenders, we feel we should charge 0% to our participating artisans. Our economic incentive is for each artisan to grow their business and be successful."
|leather wristband bracelets 'Infinite Red' (pair)|
Want to know more about micro-credit and how it improves the lives of people who otherwise would not qualify for a traditional bank loan? Visit this page which will lead you to the section titled Information on Micro-credit. You will find answers to several insightful questions on this interesting (& controversial) topic.
If you have the time, pop over and read about a few of these talented artisans. While some are on the Loan List page, others are showcased throughout the main site. Every product page also has information about the person who created each item. And if you find something that catches your eye, be sure to leave a comment on my blog before 2/23 to enter the random drawing for a $50 gift certificate.