Originally Posted by
oliver2002
I'm curating 1000$ collected at SMD 1 & 2 back in 2009-10 and relend it without withdrawal, and the losses are staggering.
Code:
Deposits
Your deposits $1,000.00
<snip>
Currency losses ($30.13)
Default losses ($330.75)
Subtotal ($360.88)
Total credit in Kiva $639.12
The biggest defaults were in the US. I remember making abut 10 loans in the US, all matched by capital one. All of them bent bust.
You have to keep in mind how these loans are made. It's easier to get credit in the USA than buy beer. This being the case, there's probably a good reason the person in question can't get a loan from traditional and even some of the non-traditional sources. I looked into the microfinance/peer-to-peer lending sites many years ago. A lot of them looked promising, but I waited until they had a couple of years' worth of data. Sure enough, many of these loans repaid with losses, if at all. I'm glad I stayed away from them.
My only loss on Kiva thus far was part of a rather large loan to a rather poor country. I do remember looking at it and thinking it'd take these poor guys 10+ years to pay off...but gave $25 just for grins. I lost $3. Not bad overall. I don't have any ill will towards the borrower. I hope their business does indeed prosper.
For better or worse, Kiva isn't Prosper or Lending Club -- you will NEVER make money on Kiva loans. All risk is placed on us, the funding members of Kiva. All of the currency losses also are placed on the funding members. Breaking even and (possibly) helping others is the best possible outcome, but that's about it.
If you're looking towards Kiva as a method for MS, it can be... but like all methods of MS, there is risk involved. With reselling products/gift cards, there's always the chance of cards being bad / getting lost / unscrupulous buyers. With reselling products, there's always shipping damage (been there), price hikes, and unscrupulous buyers. Other methods of MS also carry risk.