kiva loans
December 12th, 2008
a while ago I mentioned I am trying out kiva, and i thought i’d give a bit of an update + some pics so you can check it out. I put in 100$ and so far have gotten 36$ back, which I re-lent out. here is my portfolio of 5 loans of 25$:
unfortunately, all of them are behind schedule with my money! i don’t wanna get all stewie on them, but a deal’s a deal ;) i seem to be doing under average for repayments but these guys are still trying to repay, even if its late. truthfully, i’m not really expecting to be paid back.
I’m approaching it more just out of curiousity, but I gotta say, it’d be a lot more fun if you had to manage the portfolio to get some kinda return. at least then you can turn it into a game, and have more fun with it. as it is right now, I don’t receive any interest and actually donate to Kiva almost every loan – so this is just leaking money, but in a good place.
3 Responses to “kiva loans”
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December 26th, 2008 at 10:10 PM although the premise of kiva loans is great, i would really like to know the logistics of how the loans are distributed and how the money is collected from the individuals. These people aren't in locals that are known for good money management or transparency. And that last point, transparency is what makes me nervous about this. At BNP where i studied money transfer systems in India in the legal dept, alot of the money transfering was being used too launder dirty money. Not to say all the people were in on it, but the innocent were being used by the criminals. Anyways, portfolio mangement would be nice, but i think it would be neat to know exactly, in detail, how they use the money, how they receive the loans, how the selection process works, perhaps testimonials from the people getting the money, overall maybe a little more transparency. The concept as a whole is great, and i support it, but in these parts of the world, you have to be careful with what goes where....
December 26th, 2008 at 10:23 PM kiva is very open and even tries to educate lenders about how it works. you can find a lot of info on the site. they value transparency quite highly. there was once a woman who used 500$ to fund her daughters wedding - the field partners reported it back to kiva and the lenders were made aware of what happened. there were mixed reactions but the point was that transparency was maintained. they have a bunch of useful FAQs and intros about how the process works. you can find it all on the site at the bottom. here is one about the risk structure: http://www.kiva.org/about/risk/overview there are many points where risk can leak in, ultimately, trust has to come in at some point, even in our banking system. i find kiva does its best to make everyone aware of those points and takes some counter measures by having profiles and ratings. and really, i think that's all they can do. i dont think you can have a system that completely replaces trust, you can mitigate it, protect with collateral, but ultimately, that's the magic ingredient to cooperation. there won't be a perfect loaning solution. this comes pretty close i find.