As of this morning, I had two capital units worth of funds sitting in my Kiva account (for new readers, I make Kiva microloans at the rate of one per month, $25 each, and I recycle repaid funds into new loans at a rate of one per month; each $25 is thus one "unit"). Two loans were repaid very close to each other, hence the overlap.

But I've also been having difficulty lately finding Mexican entrepreneurs to loan money to. Perhaps Kiva has been hit with another wave of popularity like they were late last year, which saw every single loan throughout the system funded, leaving no one to lend to (a good problem to have!). All of the loan applications present on the system for funding right now are for home improvements.

I've been avoiding loaning money to these projects because of my interest in building business in Mexico. However, my awareness of several current U.S. trends helped to finally make the light bulb flicker on in my head - home construction and improvement projects rapidly move capital through markets. The Mexicans applying for these loans might not be creating new employment themselves, but they are buying building materials from someone, and that exchange could possibly help to create more employment. That this is the case can be ascertained by listening to or reading financial news about our economy, particularly the effect of the home loan debacle going on right now on construction, which in turn impacts building supply dealers (Home Depot, Lowe's, etc.), municipal sales tax income (where applicable), and so on. It's a ripple effect that can be positive or negative; by going ahead and making these loans, I am creating a positive ripple effect in the Mexican economy (not to mention helping someone create more value in a privately held asset - their home - which can later on be leveraged to build still more wealth).

So I searched through the available loan applications and found Juan Carlos Prieto Ávila who is seeking funds to help weatherproof his home. Juan lives in Nuevo Laredo, a town right across the border from the Texas town of Laredo, where employment within Mexico is high (relative to the rest of the country). Since part of my hesitation in making home construction loans was a question of income - how would the applicant produce one so as to repay the loan - knowing where the applicants live helped answer my question. Knowing that Juan lives on the border where economic activity is high is reassuring.

Finally, there's also my own recent experience that has helped me understand the reason people are seeking these loans rather than business loans. Basically, I am in the same situation as them in some respects. I work for someone else and I used that income to secure a mortgage so I could buy my condo now rather than saving up the purchase price of it. From my reading I've learned that many of these applicants are building their homes from scratch, but the same idea applies: the income exists to repay the loan, so it's better to have the home now rather than wait around in the hot sun for 30 years (or in the case of Juan's project, six months).