kaw753

You are forgetting the opportunity cost of the dollars lent. The loan takes time to pay back and that is costing you money.

How did you get 33,000 UR points for $9500 in lending? Since US Bank killed the Flexperks charity bonus on Kiva, it has been slow going.

calwatch

He's probably using Kiva to unload office supply store $200's and $100's. That's what I do, since running a bunch of $200s at Walmart is annoying at best, suspicious at worst. It's my go to choice for $200/$100 MS from the comfort of my home.

ChrisFlyer66

Either that, or just using kiva loans to meet the spend requirement for a signup bonus. So far I don't think any credit card issuer is denying points or closing accounts for funding kiva loans.

KRSW

$3k of that was this quarter's Chase Freedom, others were Paypal gift cards bought at ~4-5x points. There were a few Visa GCs from various sources. The rest was good 'ol Freedom Unlimited @ 1.5x points.

I would agree that there's a lost opportunity cost of investing, BUT, that $9500 is over 2 years. I normally only have $1k-$2k out on loan at any time on Kiva. Remember, MS with what you can afford / are willing to lose. There's nothing saying Kiva won't just close their doors one day without notice. The same is true with any other MS option -- one day the magic stops, hopefully with enough warning to be able to cleanly liquidate back to cash.

blitzen

Not sure if I would consider Kiva loans MS.
You are not buying GC > buying Money Order > ..... or other easy circular methods but you are using your money to issue micro loans.
1) currency losses
2) defaults
3) money is locked in the loan for 6,7,8,9..... month
4) you are missing out on interest (Amex Savings i.e. 1.55%)
All of the above doesn't really make it a MS opportunity ( 8 month loan = 0.75% Interest lost - 0.5% currency losses - 0.5% default > just the "value" of a mile/point lost / break even). My currency loss and default is I think around 1% each but I'm still using Kiva . It is more doing something good and once in a while help to meet minimum spend (which i would do anyway but if I use Kiva I don't have to track/remember/ ....).

CDO

Definitely risky !

sudden729

Yup! Kiva also recently changed it's default protection policy: https://www.kiva.org/blog/update-on-...ult-protection

In the past, the field partner had the option of making a repayment on behalf of the borrower if the borrower was delinquent. That option is no longer available... so expect to see spikes in default rates!!!

ChrisFlyer66

Wow, I hadn't noticed that before. I find it silly that they refer to it as an "exciting change" that was made based on lender feedback. I find it hard to believe most lenders don't want field partners to cover their losses.

taxicabnumber

You'd be surprised. FTers and MSers, while accounting for a non-trivial portion of Kiva loans made (not a majority or anything, but non-trivial), certainly aren't the majority of Kiva lenders. I went to a Kiva lender summit* a few years back, when I still lived in the Bay Area, and it was eye-opening. It was way more common to hear lenders say that they sought out riskier loans, were willing to lose money, etc. Most lenders view Kiva as charity, not as a way to generate spend/CC points/returns. The rationale is "I'm anyway forgoing returns by putting money in Kiva instead of investing. Why not try to maximize my impact?" They were very interested in the specific borrowers and the content of specific loans they were making (and most of them had never heard of Kivalens!) -- and didn't really care about things like loan duration, which is of course crucially important to MSers. To this end, while I as an MSer don't love this change, I actually don't doubt that it might have been brought on by lender feedback. All of Kiva's operating expenses come from donations, so it makes no direct difference to them financially whether field partners choose to cover borrower losses or not.

Also: Yes, Kiva knows about MSing and MSers quite well and are cool with us doing what we do -- "within reason". They didn't seem quite so thrilled by the people running hundreds of thousands of $ through Kiva per month (I had no idea that people were hitting Kiva quite that hard!), but were OK with those of us doing a few thousand here and there. They specifically mentioned FrequentMiler as a blog they read, although I don't know if they peruse Flyertalk at all ;-) On another note, they did express a hope that MSers would eventually start donating a little bit to Kiva (they do a lot of internal analytics on who donates, how much, when, etc. and one of the "most vivid" findings from some of these tests was how much less MSers donate relative to any other subset of Kiva user). I've started giving a little bit -- hopefully that keeps us in their good graces!


*Each summer, Kiva invites 100ish of its "very active" lenders to spend a day at Kiva HQ in San Francisco with talks, food, group discussions, etc. -- I highly recommend going if you get an invite (although as a nonprofit they don't pay for anything besides free lunch/snacks)! It was pretty cool, and all of the executives -- i.e., pretty much everyone listed on https://www.kiva.org/about/leadership -- were active participants in the day and were wandering around chatting with lenders etc. Great group of people.

calwatch

Honestly, I never noticed that option before but have noticed my delinquencies are spiking (now almost at 10%), and I've also been getting a few defaults. I am a sucker for green energy/farming loans and had a couple US loans that defaulted, which was a reminder not to loan within the US unless I did more detailed vetting of the borrower. Overall default rate of 0.50% which is not bad and certainly worth the ease of unloading cards - although I expect that delinquency rate will probably convert into a default rate of 2% when all is said and done.

I got invited to the Kiva summit a few times and didn't think about going since I'm not in the Bay, and it appeared they didn't do one this year, but will definitely look into going next time.

I'm surprised that anyone could get hundreds of thousands through Kiva - WOW! I do maybe $10,000 a year, spread out between funding other loans in the FlyerTalk team and my special interests. I am ramping down my lending as the office store deals get worse, interest rates go higher, and Plastiq, among other vendors, offer better pajama unloading opportunities. Also, rather than $100 or $200 loans, I'm doing $25 increments on more loans instead to diversify risk.

StartinSanDiego

I'm not in the "100's of thousands" MS category, but I've been in the top 1% for quite a while. The more I lend, the more serious I am about getting repaid. The "average Kiva lender" has a much higher default rate by percentage of monies lent, than my stats, but, I've loaned substantially more. Now my favorite loans are short term, repeat borrowers that successfully repaid other loans, with well vetted field partners.

sppe

Would it be possible to put $5000 or so on a new Amex Platinum to reach the minimum spend? I have a targeted offer for 100,000 points, and I don't mind the money being tied up for a long time. There's just not really anything else I can think of to buy. I'd rather the money go to a good cause and risk losing some, than buying stuff I don't need or trying to resell stuff.

I tried searching for issues with Kiva not counting towards minimum spend, and I couldn't find anything. Is it still safe, or do I risk losing the bonus?

ChrisFlyer66

I think it is safe.

calwatch

It's no different than any other Paypal transaction. You could be giving to charity too.
Incidentally Kiva is now matching cash contributions (my target was $500) so they know how many MS'ers they are and are trying to get some funds from them to support operations.

GarlicFlyer

I have put $6000 in Kiva over the past 3 years. I have had only one loan default, and that was for $25 to someone in the USA. I use Kiva to maximize the 5% PayPal quarterly bonus on Discover and Chase Freedom. I sometimes also use to empty gift cards.