Trying to understand the gripes listed above...

- "happily pass on the risk of default": yes, that's the model of most micro-financing. The platforms facilitate the transfer of money between the lenders (i.e., us) and the partners (e.g., microfinance institutions "on the ground" that disburse, administer loans to the actual end borrower). It seems to be pretty transparent that money we lend could potentially default.
- "don't share the profits they make": yes, they're a US non-profit entity. We're not shareholders in their company. The revenue that Kiva generates goes back into supporting the company. I don't think they've ever stipulated that lenders like us get dividends or any positive returns on our loans. Kiva does not "profit" from any returns on the capital that you or I choose to loan.
- "ding you for donations": Kiva has a full office of IT staff, field partner managers, marketing staff, corporate partnership staff, HR, finance/tax operations, etc. Some of that payroll and rent cost is offset from sponsorship and foundations, but much of it is via private donations. Kiva should make it clear that it's an optional donation, but it goes to support their basic operations.
- "recipients of the loan also pay interest for the loan": True. The micro financing institution (MFI) on the ground has to pay staff and rent to maintain an office full of people to recruit borrowers, administer the loan, collect on the loan, some provide educational programs, etc. The interest that gets paid by the borrower supports the actual local MFI, not Kiva.
- "which is shared by Kiva too": I'm confused by this. Kiva does not share in any profits from the MFIs. Kiva simply facilitates the transactions of interest-free loans from the Kiva lenders and the repayments from the hundreds of local micro-finance institutions. The interest charged by the MFIs goes directly to the MFIs. (And yes, some of those interest rates are VERY high to those of us who have easy access to capital. But servicing a loan in some parts of the world is very expensive - to collect the equivalent of $.50 a week from a lender could be an 5+ hour round-trip journey for someone on bus/bike/motorcycle/tuk-tuk.)

Microfinancing has its pros and cons, and the research out there is still mixed on the actual long-term benefits of microfinancing.

But I'm fairly close to the Kiva team and operations (having just spent a day with their leadership team a few months ago). Each of us can decide what they want to do with their money - eat, drink, travel, be merry, make loans, etc. But let's have an open, fact-based conversation...