Microfinance through Kiva update #2

Every fall I seem to write about my micro loans through Kiva. This is my third update even though it’s numbered two, had I an idea I would update every now and then I would have used numbers in the first. At present, I only have one loan outstanding and it is almost paid back. I have withdrawn my last $25 and when the last bit is paid back I will donate it to Kiva. While last year I was nearly certain that the three failed loans wouldn’t affect my loaning, it has. I have a sadness when I try to think all the loans I funded, all 6, and why I couldn’t fund more, because the partner organization took the money from the lendees and decided not to return it to the lenders. I was totally prepared for hardship on the part of the lendee and the inability to return the funds. It never occurred to me that I would face dishonesty and lose my investment. It wasn’t hundreds of dollars, it was just enough that I was unable to reinvest without dumping more into the program. I admit, I liked seeing how many people my $100 dollars helped. The first 3 people I picked resulted from 2007 in loss in 2009, yet I continued. I added $25 more to my account and helped 3 more groups, one in 2008 and two in 2009. The last one from 2009 is almost paid off but I need a break.

As a family, we have always been generous with the resources we are given, but as time goes on we find ourselves looking more at our neighbors. We have chosen to support our local food bank and other charities. I still have a heart for those in need worldwide which is why one of the charities I still support is Mully Children’s Family, a Kenyan family caring for Kenyan children in need.

Microfinance through Kiva UPDATE #1

I last wrote about Kiva over a year ago and I have an update to my loans. As indicated in my earlier posts, I have only loaned to individuals in Kenyan. After visiting Kenya in 2007 and seeing firsthand the poverty, I couldn’t help but help. I started with three loans and when Kiva let us reloan monies before the entire loan was paid back, I kicked in a bit more money and added one new loan in Sept 2008 and another in April 2009. Last year we received word that due to political unrest in Kenya, my three original loans might not get paid back and if they were paid back the the payments would be late. This year those three loans were officially declared defaulted. From what I can tell, my three people were paying back the loans but the field partner organization was not forwarding the monies received back to Kiva. I find this sad and a bit concerning. Kiva will continue to try to recover funds from the field partner, but no new loans will be dispersed to through that field partner. Just over 40% loans were paid back before the loans defaulted. I don’t think this experience will prevent me from making future loans. The loan from Sept 2008 was paid back completely. I currently have only one loan funded, it is also from Kenya and more than half of the monies have been repaid with no problems foreseen. In seven weeks I’ll have enough in my account to relend to a new person and I probably will. I may even add some extra in as it will be the Christmas season and our family contributes to charities instead of Christmas gifts. I always donate a portion to Kiva.

siggy

nablopomo2009

Microfinance through Kiva

I joined Kiva.org Apr 11, 2007, after watching a special featuring microfinance on PBS. Kiva provides a way for lenders to meet entrepreneurs based on a variety of criteria: country, gender and/or type of work. I believe that it took a few days for Kiva to have enough entrepreneurs for all of us to fund, after all a PBS special has a wider audience than anticipated . When searching for loans to fund, I decided that where possible, I would fund women in Kenya. I later revised that plan to fund both men and women in Kenya, much needs to be done to encourage all Kenyans to find employment and funding half the population was a bit short-sighted. When I first joined, loans were funded completely and lenders waited until full repayment of loans were made before using the monies again. Basically, repayments sat in limbo in either Kiva’s account or the Kiva’s partner’s account. Two days ago, Kiva changed the policy and now immediately places repaid monies into lender accounts. I happily discovered a little over $27US in my account and a Kenyan man desiring a loan. So my account is happily empty again.

Anyone can create an account on their own or I can send an invite. I have no idea what an invite gets me, except a statistic on one of my pages and a nifty email sent out in my name:

I wanted to let you know about Kiva , a non-profit that allows you to lend as little as $25 to a specific low-income entrepreneur in the developing world.

You choose who to lend to – whether a baker in Afghanistan, a goat herder in Uganda, a farmer in Peru, a restaurateur in Cambodia, or a tailor in Iraq – and as they repay their loan, you get your money back. It’s a powerful and sustainable way to empower someone right now to lift themselves out of poverty.

Please keep in mind a couple of things: these loans are interest free from us and the lender assumes all responsibility for loss. Some interest is paid by the loanee to the field partner, but not to us as lenders. Kiva has a very low default rate because entrepreneurs are interviewed and selected on a very rigid criteria by trusted field partners, but it does happen. Of the four individuals I have loaned to, all belong to one of two field partners. Both organizations have a 0% default rate, but do have a higher delinquency rate. I believe this is because last November there was significant unrest in Kenya. All Kenyan lenders received a notice that due to the political instability of the region, loans were likely not to be repaid. Fortunately, many entrepreneurs were able to recover from their losses and continue their businesses. I cared very little about the loss of the monies, I desperately hoped they would recover and continue to provide for themselves and their families. If a lendee is unable to repay the loan, the monies are gone.

This graphic is a comparison of one of the field partner lenders in comparison to all Kiva field partners.

siggy