Today, we’re approaching 1,000 members!

Four members from 1,000; $89k from our 8th million.

Well, it's been a year since I updated my stats, so here's where I stand as of Jan 2020:

Started in Dec 2015.
Amount Lent: $18,900
Amount Defaulted: $22.97
Amount of Currency Rate Loss: $0.41 (unchanged from last year)
Total losses: $23.38
$23.38 / $18,900 = 0.001237 or 0.124%. (Note that this is lower than last year)

US inflation for the same time period was 9%.

So, I've made 690 loans, got the chance to help out at least that many people, and earned ~66k UR points for $23.38. Still not as great of a return as the prior year, but still a good deal in my book.

Defaulted loans: 4 total.
1) $25. Total loan was $8050 in Rwanda. Debtor paid back $22.95, thus $2.05 loss. I'm not upset about this one.
2) $50. Total loan was $500, in the Philippines. Debtor paid back $37.08, thus $12.92 loss. Annoyed by this, but still they paid back 74% of the loan, so I can't be too upset.
3) $25. Total loan was $900, in Ghana. Debtor paid back $23.25, thus a loss of $1.75. Not upset at this.
4) $25. Total loan was for $$1,000, in Lebanon. Debtor paid back $18.68, thus a loss of $6.32. Biggest 'loss' I've had so far on a loan. Still works out to 74% paid back.

I post this info, not to toot my own horn, but rather for others to see what it's like to make loans on Kiva. I will say that my stats are substantially more favorable than the total Kiva users. For example, I only had 0.122% losses due to default, whereas the total Kiva users have 1.76%. My currency rate loss works out to 0.000022%, whereas the total Kiva users have 0.32%. You better believe that the Default % of Kiva Partners is one of the first things I look at.

After nearly 10 years of investing and reinvesting 1000$ collected at SMD 1 & 2, I took a look at the stats this year, and the result is horrid:



Kiva has a very nonchalant attitude to the money it handles, its as if they are passing on monopoly money. The associated companies they lend to who who actually do the final microlending are rather shady and not vetted in advance or held accountable when things go bad. Sad situation.

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.

In 1,088 loans totaling $28,980.00 I’ve had $69.48 in currency losses and $740.79 in defaulted loans. I tend to make occasional loans with higher risks but high returns if the borrower succeeds. E.g. I knew lending to a furniture rebuilder in Nairobi’s Kibera neighborhood was risky due to instability and possibility of uprising, and unfortunately that’s what occurred. The borrower paid back part of the loan, but Kibera exploded into disorder.

I’m okay with that, honestly. And I’m glad Kiva has organized the technology at this end, the connections with local micro lenders at the other, and I believe they’ve aspired to keep that end clean. But I’ve been many places the micros operate, and in some cronyism, corruption, etc. are powerful streams they’re fighting in their up current swim.

I just started. I have maybe 20 loans under my belt, I just dipped my toe in the water. I only did it when I noticed the AA moderator JDiver posted something, that ended up in my feed. Since he was always so helpful on that forum with the banal questions I and some others would ask. And it looked like a good way to help out.

In my short time what I have noticed is that women pay back better than men. I prefer loaning to agriculture or ongoing businesses, like resale and transportation. Like KRSW I have not loaned to a modern country. I have stayed mostly in Central/South America, Africa and have had a couple to the Baltics and Pakistan. What do they call it, the underbanked?
As per KRSW, I will start to use Kivalens. And I really appreciate ALL the advice I have seen in this thread. I wanted to step it up, but now I have more direction in choosing. I am not really worried about a little breakage since it seems like a worthy endeavor. I am glad I finally found it. It gives me something to do, on the computer besides arguing on Omni.

I have been on Kiva for about 10 months now and all my lending has been in the name of the FT team. I haven't just posted in this thread to make myself visible.

So far I have invested in 222 loans and out of those the larger investments have been $XXX. I lend mainly to women, since I believe the entrepreneurial skills of women are important for solving the microeconomics in the 3rd world. To me it's not surprising that my top 3 countries are as follows:

El Salvador 22.52 %
Timor-Leste 14.41 %
Honduras 12.16 %

One can tell that I have flown to SAL and DIL.

I personally recommend lending to productive individuals that will use the capital for manufacturing new items, doing other manual labour or running a useful business. For instance I have loaned for beauty services only very selectively, while raising farm animals has always my backing (somekind of Victorian wisdom, I suppose). Also rendering food services is something I find constructive. I have avoided e.g. medical bills, because I think Kiva should be used to foster becoming financially empowered in a constructive way. My sentiment is very similar to the one of George Peabody. For a good/sensible cause, my coffers may provide up to XXX of dollars, since I then trust the loan will also be repayed. My only serious slacker has been a Ugandan woman, that wanted to buy items for her general store. I guess the energy saving bulbs vanished or something... The loan hasn't defaulted, but it's lagging behind badly. Either way, I didn't follow my doctrine, which I should've. Interesting to see what happens with a female Bolivian police officer, that wanted to lend for selling appliances. No, I don't expect honesty for being a law enforcement officer. I decided to see what happens when one loans $25 to a Bolivian police officer.

Looking forward to visiting more of the countries I lend to. Some of my countries are based on a big likelihood it will happen, it's just a matter of when.

Happy lending!

That's a new one for me. Will look into what it does.
I was first thinking are you looking at the age of the debtors - especially *cough* the ladies.
Hear, hear.
True, for instance the ones needing money to repair their car (e.g. a taxi) will need more, while lending to cosmetics is risky. I know beauty is in demand in all parts of the world, but honestly speaking it's not a sensible business everywhere. Overall it anyway falls under the category of not being maybe as much of constructive financial self-help as I'd like it to be, but indeed, I've lended to such cases as well and so far the selected ones have paid as expected. *knock, knock* I do however approve the lending reasoning when e.g. an existing hairdresser/barber wants to improve their shop or get more stuff. Then there's an actual business sentiment there. Miss X just wanting to become an entrepreneur with $2000 of cosmetics in e.g. Rwanda or Nicaragua is just *cough* outright ludicrous, where as miss Z and her pupusas in El Salvador is absolutely bueno - too bad I can't have the interest paid in ones and delivered to my home.

That's how I got started as well. I'm hoping to hit my next personal lending "milestone" the latter half of this year, and I have JDiver to thank for getting my started on Kiva.

I've been on Kiva a little bit now, and I've been fortunate enough to get semi-regular updates from their management team and occasionally have the chance to pop out to their offices to meet with their teams for a day. I know we all lend for different reasons, but I wanted to share a couple thoughts and tidbits for consideration...

- Yes, like with any business or platform, there are occasionally the bad nuts. Kiva does do regular audits of their microfinancing partners; those who are "fail" are kicked off the platform. Others are put on probation and given some guidance on how to improve. There are Kiva Fellows who are on the ground around the world who check in with these partners, not only to provide guidance/assistance but also to spot-check for compliance. (These fellows will pick a random set of loan recipients and do surprise checks to ensure that 1) these individuals actually exist, 2) they're actually working with the local partners, 3) the funds disbursed are actually being used for the stated purpose.)

- All of us loan for different reasons. If you're expecting market returns, you should probably resort to more "classic" investing instruments. However, just like regular financial services, if you chose to invest in "bad" entities or take on greater risk, don't be surprised if you suffer larger losses. I won't belabor this point.

- I would ask folks to keep in mind Kiva's core goal: to serve the underbanked and provide opportunities to those who are most vulnerable. This fundamentally means that risk needs to be taken. I'll share a conversation I had a few years ago with the Kiva team. We were discussing the default rate and the fact that it was about 1.5-2%. You might think we talked about ways to lower that number, but in fact, we discussed why that number actually needed to be *higher*! You see, if you make only low-risk loans, you're really not serving the most vulnerable. You're serving the lowest-hanging fruit who are already most likely to be able to get credit and repay loans.

- Reaching individuals in the most impoverished and rural neighborhoods is expensive - it can take a full day of travel just for a loan officer to visit a client to collect a loan repayment. That's part of the reason why you'll see the interest rates be so high for some customers. These partners are also often providing more than just a loan. They're providing education on budgeting, savings, and marketing. They're helping develop cooperatives and increase the use of technology to ensure clients are getting the best prices. This all costs money. By providing zero-interest loans, we are already help cut out some of the costs that would otherwise have to be passed to the borrowers.

- To truly reach those who are the most vulnerable involves making loans to those in war-torn countries, seeking out refugees, reaching populations who have never traded with money and now are learning a completely new world. This involves risk. These are the folks who are most in need - but also more likely to not be able to repay. So Kiva is finding the difficult balance between promoting their core mission whilst trying to be responsible stewards of a two-sided platform. They know that they may one day push too far and suddenly the flow of monies available for loans starts to decline...and that would obviously be detrimental to their mission.

Anyway, congrats to the team for making it to $8MM already! Onwards and upwards.

It’s impressive how you’ve followed up, attended meetings, met with Kiva execs. Thank you, JY1024, for your thorough follow up and for taking the time to share.

No change in status, but the "loans at risk" rate of the lender is now 99.57% while their default rate is still 0.32%, so I guess I'm not the only one stuck in this limbo.

It's surprising there haven't been any posts on this topic. Are Kiva operations currently restricted due to travel bans and repatriation? Are repayment rates starting to fall?

My default rate was already relatively high (1.37%) but I don't think it has increased substantially. If all delinquent loans remain unpaid (they won't) that number would go up to 2%. Some of the US based borrowers are still making payments as of a couple of days ago. Due to higher interest rates a couple years ago, along with easier Plastiq unloading, I had greatly downsized my use of Kiva for MS in 2019. Even with the change to disallow gift cards on Plastiq, I still never ramped up because I knew the economy could turn south (although I was thinking of a general bubble burst, not this). Due to crisis I'm going to Costco more often which means I unload my VGC bought at a discount there, and for regular spend.

I only have limited info, but I can add the little I know...
- Kiva Fellows scattered around the world are following the guidance of their respective governments re: returning home and/or quarantining.
- Some microfinancing institutions/partners have already announced that they are tentatively suspending loan repayments, as they do not want to endanger their staff nor borrowers with their usual in-person collections.

I'd suspect that delinquencies will start to rise. Unclear if defaults will increase in the long-term (though I suspect they will), as defaults are a lagging indicator to delinquency rates.

FYI: Almost 40% of scheduled repayments were missed this month. Most of my loans are in Asia, Central America, and South America.


As always, if you want to avoid delinquency and default, don't lend in Africa, except for Senegal. Do not lend in US.

Don't expect defaults to rise anytime soon. I had people stop paying for 18 months and the loans were still not counted as defaulted.

5/4/2020 update... my delinquency rate shot up to 40%. Kiva is basically dead for a while.