In all the recent posts I’ve been reading about peer-to-peer lending, including the excellent reporting by Jim Bruene at NetBanker and Colin Henderson at The Bankwatch and CommunityLend, I hadn’t come across Kiva.org.

I’m very excited about social personal finance and think it may well change the way people exchange money when they just need to borrow or invest a small to medium amount and don’t want to bother with a bank or credit union.

But tonight my aunt showed me Kiva.org, and I got to admit I was a little embarrassed to admit that I didn’t know what it was. It’s an amazing concept where anyone can make microloans to people in the developing world who need small amounts of money to start an enterprise. According to their website:

Kiva lets you connect with and loan money to unique small businesses in the developing world. By choosing a business on Kiva.org, you can “sponsor a business” and help the world’s working poor make great strides towards economic independence. Throughout the course of the loan (usually 6-12 months), you can receive email journal updates from the business you’ve sponsored. As loans are repaid, you get your loan money back.

You can cash out when you’re repaid or reinvest it into a new opportunity. I think this is genius. Did everyone else know about this and somehow I’m the last to the party? Hard to be shown up by my aunt after all…

I started tonight by investing $25. Kiva.org asks you for a 10% addition as a donation to keep them running. That’s optional. You can pay by PayPal or credit card. When you’re done you can easily send the info about the cause you donated to to your email list to spread the word. Nicely done.

Here’s who I donated to: Massan Aziado of Togo. Fantastic and inspiring!