The Unexotic Underclass

You're the one making that assumption here. The parent commenter was just assuming that the two co-occur; the causal relation can easily flow in the other direction.

It should hardly be a stretch of the imagination that being poor gives you far less opportunity for a good education and far less time to do research. Not to mention the fact that the day-to-day stresses and crises of poverty make complicated decisions much more difficult to deal with succesfully[1].

TL;DR: Parent commenter assumed the two were correlated. You assumed that the causal relationship went "not-savvy decisions --> poor". "poor --> not-savvy decisions" is a much more well-supported direction for the causal arrow.

[1]http://www.washingtonpost.com/national/health-science/povert...

Funding makes it easier to pay your bills while you work on a problem, but can also remove a lot of the urgency about finding a solution that customers will love. If you depend on customers to pay your bills, however...

We also give aid to the West Bank and Gaza, so we're working both the supply and demand side there.

The first link you posted shows some 'portfolio yields' (pretty much interest+fees, which can kind of be summarized as interest rates anyway) of up to say 80% in South Sudan for 2012.

But that's not as crazy as you may think. After all, South Sudan has an 80% inflation rate in 2012, meaning the two are cancelled out.

This may not be true for every year, for every partner, for every country, but inflation rates of 20% are pretty average and typical for a lot of developing countries. Accompanying interest rates of 20% may sound ridiculous to us, but it's not considering all prices and income in nominal terms rise by 20% per year, too, making the ability to pay off your loan similar to if income/prices and interest rates were 0 throughout the year.

The second link you posted is hyperbolic bullshit (like microfinance producing 'zero impact on a good day' or irrelevant facts that are clear ad hominem attacks, like how the founders have 'newly minted MBAs', which we all know has become the international and universal sign of 'inexperienced privileged rich people without a clue' and just a cheap shot. He doesn't for example mention he himself is writing the article with a 'freshly minted MBA', because he indeed has an MBA himself)

David Roodman has written a great book, but any nuance it may have had is completely thrown out the window by the writer of the article. For a more substantial view read the following article for example (which is far from unbiased by the way, as Grameen was the genesis of modern microfinance, but it struck me as fair)

http://www.grameenfoundation.org/blog/david-roodman-does-his...

It continues about a crisis in Andra Pradesh, a region my girlfriend just came back from, on suicides related to microfinance. There's no link to Kiva at all, therefore it's thrown out there just to defame Kiva, it merely proves that not all lenders are good lenders, which isn't news. Loansharks have existed for thousands of years.

In India specifically I can recommend the documentary nero's guests. It's been a long-term problem even before microfinance took off and has caused hundreds of thousands of suicides in the past decades. It's tragic, but simply not indicative of Kiva. It's an illustration of globalization's need to compete with factory farms, requiring large investments in land and fertilizers, and a single drought can ruin 10 years of profits, and Indian farmers with no social security, no welfare, no pension, no savings, no insurance, they have zero opportunity to recover from that. That's horrible, but I hope it's clear the solution isn't to not allow any financing of any farmers. The solution is not to stop programmes like Kiva. These problems are unrelated.

It then talks about things like cockfighting loans on Kiva. There was one and promptly pulled, the lenders were refunded. Again, no substance, just an article trying to attack Kiva.

Then it mentions child labor, that's actually not on Kiva as child labor is illegal by international legal standards and Kiva abides by such standards. But it's an interesting discussion. A friend is traveling to Bolivia next month to report on child labor laws there, as it has just legalized the practice. I'd be happy to have a larger discussion on this, but as crazy as it may sound, I'm not of the opinion that child labor should be illegal everywhere. Yes, in a perfect world, child labor should be illegal. It oughtn't be dismissed so easily, here's a quick overview, some comments might be good reading, too, one from a former child laborer himself:

http://www.npr.org/2014/07/30/336361778/bolivia-makes-child-...

Then it attacks Kiva for keeping $88m in the bank in order to raise money from interests by investing that money. It's just utter bs. You can read about it here:

http://www.nextbillion.net/blogpost.aspx?blogid=3731

Anyway I can go on and on, but it's quite clear that Kiva is not the 'scam' that he literally calls it without nuance. I'm not championing Kiva as the perfect solution to all problems. It's just a tiny NGO that does some good work by lending a relatively tiny $50m a year worldwide.