by Dawn Tay

IN AZERBAIJAN, south of Russia, Ms Qatiba Jafarova has bought two cows to expand her home-grown dairy business - aided by cash loans from Singaporeans she has never met.

The 47-year-old is one of the many beneficiaries of loans made by a growing number of Singaporeans involved in microfinance, a system of lending money to the working poor who do not qualify for bank loans because of insufficient collateral.

A "Team Singapore" group set up last August on microfinance website Kiva - www.kiva.org - has already garnered 74 members.

They have lent out almost US$10,000 (S$14,400) to start-ups in countries as far away as Peru, with no interest earned or repayment guaranteed.

On the site, lenders can find pictures and read journals to choose which businesses to fund, whether it is a farmer in Vietnam or a taxi driver in Togo.

Online progress reports keep the lenders updated on the status of their loan beneficiaries.

Loans to microfinance organisations range from a couple of dollars to a few thousand. Even though it's still small, Singaporeans' involvement in microfinance is slowly growing.

Aside from Kiva's Singapore group, local online communities have also sprung up on other sites such as Yahoo Groups.

Eight Singaporean Kiva members my paper spoke to all said that knowing that their "little bit goes a long way" towards empowering others was what encouraged them to start lending.

Said business consultant Aida Dali, 30: "Microfinance allows us to choose who we want to help. Right now, I'm choosing women entrepreneurs from countries I haven't made loans to yet."

Ms Aparna Krishnan, 30, a research associate in developmental economics at the Institute of South-east Asian Studies, said microfinance can be used to support vulnerable groups or small businesses that find it difficult to borrow from financial institutions.

"Examples would be loans to single mothers and destitute women who want to start businesses, and providing insurance and pensions for informal workers," she said.

dawnt@sph.com.sg

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