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The Wiki Man

The Wiki Man

Rory Sutherland's fortnightly column on technology and the web

29 October 2008

12:00 AM

29 October 2008

12:00 AM

An amazing piece of financial analysis has been circulating by email recently.

If you had purchased $1,000 worth of AIG stock a year ago, you would have $44.34 left.

With Wachovia, you would have had $54.74 left of the original $1,000.

With Lehman, you would have had $0.00 left.

But if you had purchased $1,000 worth of beer one year, drunk all of the beer, then turned in the cans for the aluminium recycling refund, you would have $214 cash.

Even better, if a year ago you had decided to entrust your $1,000 to the needy rather than the greedy, you would have ended up today with $1,000.

This market-beating 0 per cent rate of return is available through a website called It’s a site dedicated not to charitable giving but to charitable lending — and to the refreshingly entrepreneurial idea that if you want to feed a man, the best thing isn’t to give him a fish, or even to teach him to fish, but to lend him the money to buy a net.

Or perhaps a fridge.

‘Tajeddin Babayev is a meat and fish vendor at the bazaar in the north-easterly Azerbaijani town of Khachmaz. He is 51 years old, married with three children and has been a vendor for the last 12 years. He is currently looking for funding in the amount of $725 in order to purchase a refrigerator for his business and to make some minor repairs.’

All prospective borrowers on the site are introduced with little written portraits like this, alongside a photograph. Hence, unlike money deposited with a conventional bank, it provides an emotional return on your investment: the pleasure of seeing where your money goes. It’s a little like It’s a Wonderful Life in miniature. You also get to choose the businesses you support (in a defiant act of political incorrectness, I once lent someone in Samoa $25 to open a tobacconist’s shop). The level of default is tiny. And, since you team up with other lenders to support each business (with 20 or more people each lending $25 to any single borrower), the risk is limited.

This is all based on the idea of micro-credit pioneered by the Nobel Prize winner Mohammad Yunus, founder of the Grameen Bank in Bangladesh, and his unexpected discovery that many of the world’s poor are often rather a good credit risk.

Although Bill Clinton is one of Kiva’s great supporters, this is actually a very Thatcherite form of charity — Thatchfam. I like the idea that any money which is lent in this way is far less likely to end up in corrupt pockets than money given — and less likely to be used to buy a fleet of Toyota Landcruisers for smug do-gooders on a year’s ego trip. I have hence created a Spectator Readers’ Lending Team on Kiva. is the place to join.

Lastly, the Wiki Man Word of the Month. A ‘skeuomorph’ is a superficial design element copied from similar artefacts to reinforce familiarity. Hence the decorative guttae on Greek stone temples are skeuomorphic, a visual link to earlier temples which were built of wood. The foil on a screw-top wine bottle is probably a skeuomorph. So, too, is the familiar yet entirely artificial click made by your digital camera when you take a picture.

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