We hit $8M today!!! WooHoo!!!

oliver2002 : In some respects I agree with you and in others I disagree. Kiva has managed to set up a platform where they have 0% of the risk and the investors carry 100% of it. It is too bad that they don't have at least a little skin in the game. Unlike other micro-lending sites, the only thing we stand to gain are miles/points and possibly a feeling of helping someone out. At best, we'll break even. Zero chance for positive returns.

At the same time, they do give you plenty of information to help guide your decisions. While the individual causes are important to me, using my money responsibly is more important when it comes to Kiva. I do know one of the defaulted loans I made wasn't the best business decision, but I liked what they were doing and probably would have outright donated to them if given the chance.

Here's a few of my guidelines I use with my own Kiva use:
1) Kivalens.org --- use it!
2) Partner age -- I only fund partners who have been around for at least 3 years, preferably longer.
3) Default rates -- I only do 0.3 or lower. Lower is definitely better here. There are some partners out there with 0% defaults, ie: they cover the losses from their own funds. I like these guys. Others are 0.03 or less.
4) DO NOT loan to anyone in a modern country, especially the USA. There are more sources for loans in the USA than anywhere. If someone can't get a loan through a traditional lender in the USA, there's a damn good reason -- STAY AWAY. The statistics for defaults of USA loans really drive this point home.
5) Look at how much the loan is for vs. economics of the country. If a single individual from a rural village in Rwanda wants $20k to sell high-end cosmetics, RUN AWAY. If same individual is in a decent-sized city, asking for $10k, then maybe. If they're in a rural village, asking for $5k for livestock and related essential items, winner.
5) Partner Risk Rating -- I only do 3.5 or higher. Not a hard rule and probably one of the least important factors in my process, but it's still part of the process.

If you think Kiva's rate of return is bad, you should take a look at Prosper / Lending Club. There's some real money pit loans to be had over there. I liked the concept, but waited to see what returns were before investing money there. I've not invested a single cent there.