Using Kiva to manufacture spend
Nov 16, 2012, 5:35 pm
#1
Original Poster
Join Date: Nov 2009
Posts: 1,060
Using Kiva to manufacture spend
I've been aware that FTers are using Kiva to manufacture spend or generate points. I have nothing against Kiva personally, nor have I done my due diligence about this company.
However, I would warn all FTers that there is a risk in doing these kind of Kiva spends. Even if some of you have done your due diligence, and find that the company backing Kiva is financially sound and a legitimate operation there is always a possibility that Kiva can close down overnight. I strongly doubt that Kiva or its parent company has any credit rating, so Kiva loans are going to be akin to junk bonds. If a default happens for whatever reason, I would expect that all outstanding "loans" will be something that FTers will not get back, not without a costly and long drawn out litigation... assuming that Kiva is based in the US.
So, while I know many kind folks think that Kiva spends is a win-win scenario for all, I would exercise restraint. If you are churning $10k through Kiva, make sure you can cough up that $10k to pay your CC bills if the need arises.
However, I would warn all FTers that there is a risk in doing these kind of Kiva spends. Even if some of you have done your due diligence, and find that the company backing Kiva is financially sound and a legitimate operation there is always a possibility that Kiva can close down overnight. I strongly doubt that Kiva or its parent company has any credit rating, so Kiva loans are going to be akin to junk bonds. If a default happens for whatever reason, I would expect that all outstanding "loans" will be something that FTers will not get back, not without a costly and long drawn out litigation... assuming that Kiva is based in the US.
So, while I know many kind folks think that Kiva spends is a win-win scenario for all, I would exercise restraint. If you are churning $10k through Kiva, make sure you can cough up that $10k to pay your CC bills if the need arises.
Nov 16, 2012, 5:41 pm
#2
Join Date: Oct 2009
Location: Land of the parrots and parrotheads
Programs: Several dozen
Posts: 4,820
Very sound advice.
I've been aware that FTers are using Kiva to manufacture spend or generate points. I have nothing against Kiva personally, nor have I done my due diligence about this company.
However, I would warn all FTers that there is a risk in doing these kind of Kiva spends. Even if some of you have done your due diligence, and find that the company backing Kiva is financially sound and a legitimate operation there is always a possibility that Kiva can close down overnight. I strongly doubt that Kiva or its parent company has any credit rating, so Kiva loans are going to be akin to junk bonds. If a default happens for whatever reason, I would expect that all outstanding "loans" will be something that FTers will not get back, not without a costly and long drawn out litigation... assuming that Kiva is based in the US.
So, while I know many kind folks think that Kiva spends is a win-win scenario for all, I would exercise restraint. If you are churning $10k through Kiva, make sure you can cough up that $10k to pay your CC bills if the need arises.
However, I would warn all FTers that there is a risk in doing these kind of Kiva spends. Even if some of you have done your due diligence, and find that the company backing Kiva is financially sound and a legitimate operation there is always a possibility that Kiva can close down overnight. I strongly doubt that Kiva or its parent company has any credit rating, so Kiva loans are going to be akin to junk bonds. If a default happens for whatever reason, I would expect that all outstanding "loans" will be something that FTers will not get back, not without a costly and long drawn out litigation... assuming that Kiva is based in the US.
So, while I know many kind folks think that Kiva spends is a win-win scenario for all, I would exercise restraint. If you are churning $10k through Kiva, make sure you can cough up that $10k to pay your CC bills if the need arises.
Nov 16, 2012, 8:05 pm
#4
Join Date: Oct 2012
Location: 5280/8150
Programs: Flying and sleeping
Posts: 341
All true I guess, but its not really Kiva we should worry about. They've been around, facilitating loans, for a long time. It's their partners around the world that deserve scrutiny. Kiva is kind enough to provide delinquency rates and default rates for each loan servicer, so it's easy to make the right choice.
For myself, I use Kiva to provide micro loans to third world entrepreneurs, not to generate spend.
For myself, I use Kiva to provide micro loans to third world entrepreneurs, not to generate spend.
Nov 16, 2012, 8:53 pm
#5
FlyerTalk Evangelist
Join Date: Aug 2011
Location: Austin, Texas
Programs: Airline nobody. Sad!
Posts: 26,062
There's risk in almost anything involved in this game. If something was very little risk, it would get outed so fast and then heavily blogged and then shut down almost as fast. This is not a game for people who are risk averse. Like djrez4 I will be using Kiva to micro-lend, any miles earned are truly gravy.
Nov 17, 2012, 3:59 am
#6
Join Date: Mar 2010
Location: mountains of western NC
Programs: Life, Love and Laughter
Posts: 8,539
There's risk in almost anything involved in this game. If something was very little risk, it would get outed so fast and then heavily blogged and then shut down almost as fast. This is not a game for people who are risk averse. Like djrez4 I will be using Kiva to micro-lend, any miles earned are truly gravy.
Nov 17, 2012, 5:04 am
#7
Join Date: Mar 2010
Posts: 468
Frequent miler had a post yesterday about putting many thousands per month into kiva and doing frequent withdrawals. In the comments, a very similarly worded caution to the OPs was posted. I read the warning of the OP and that of the commenter on FM as with concern about Kiva's own stability as an organization rather than regarding the risk on individual loans. In both posts, no specific cause for the concern was noted.
I agree that putting more money into any single organization or plan than one could afford to lose is a bad idea. That is just simple prudence and common sense.That said, I have to wonder if there is a reason for these warnings here and on Frequent Miler? Is there any cause for concern re the underlying organization at Kiva? I certainly am not aware of any, and both posters say they have not done due diligence and uncovered any.
I agree that putting more money into any single organization or plan than one could afford to lose is a bad idea. That is just simple prudence and common sense.That said, I have to wonder if there is a reason for these warnings here and on Frequent Miler? Is there any cause for concern re the underlying organization at Kiva? I certainly am not aware of any, and both posters say they have not done due diligence and uncovered any.
Nov 17, 2012, 5:21 am
#8
Join Date: Mar 2010
Posts: 468
Perhaps I should add that I do make Kiva loans as well, and like onthego15 and others who posted above, I believe in the work that kiva is doing and find the miles to be gravy. I also am not participating anywhere near the Frequent Miler level.
So what concerns me re the OP's post is that, though the OP says that he or she has not done due diligence on Kiva itself, this warning could discourage participation by new lenders and perhaps for no good reason. I do agree with the OPs general statement that no one should put more money into kiva loans than they can afford to lose, but that, again, is just common sense.
So what concerns me re the OP's post is that, though the OP says that he or she has not done due diligence on Kiva itself, this warning could discourage participation by new lenders and perhaps for no good reason. I do agree with the OPs general statement that no one should put more money into kiva loans than they can afford to lose, but that, again, is just common sense.
Nov 17, 2012, 6:28 am
#9
Join Date: Mar 2010
Location: mountains of western NC
Programs: Life, Love and Laughter
Posts: 8,539
I've been lending with Kiva for 2 1/2 years. My own default rate is 0.4% Kiva's default rate since its inception is 1.00% I think that is exceptional, especially when you consider that Kiva is all about lending to people all over the world who have little access to credit.
I see no reason at all to worry about Kiva's stability.
However, there is a risk in getting into Kiva lending just to cycle money through and maximize miles/points/cash back. Some folks who do this a lot (withdrawing all or virtually all of their money each month) now have to wait weeks for their withdrawals to be mailed to them. Kiva does this rarely, but it has happened.
As far as I know, making occasional withdrawals is not a problem.
I see no reason at all to worry about Kiva's stability.
However, there is a risk in getting into Kiva lending just to cycle money through and maximize miles/points/cash back. Some folks who do this a lot (withdrawing all or virtually all of their money each month) now have to wait weeks for their withdrawals to be mailed to them. Kiva does this rarely, but it has happened.
As far as I know, making occasional withdrawals is not a problem.
Nov 17, 2012, 6:38 am
#10
Join Date: May 2009
Location: South Park, CO
Programs: Tegridy Elite
Posts: 5,678
I've been aware that FTers are using Kiva to manufacture spend or generate points. I have nothing against Kiva personally, nor have I done my due diligence about this company.
However, I would warn all FTers that there is a risk in doing these kind of Kiva spends. Even if some of you have done your due diligence, and find that the company backing Kiva is financially sound and a legitimate operation there is always a possibility that Kiva can close down overnight. I strongly doubt that Kiva or its parent company has any credit rating, so Kiva loans are going to be akin to junk bonds. If a default happens for whatever reason, I would expect that all outstanding "loans" will be something that FTers will not get back, not without a costly and long drawn out litigation... assuming that Kiva is based in the US.
So, while I know many kind folks think that Kiva spends is a win-win scenario for all, I would exercise restraint. If you are churning $10k through Kiva, make sure you can cough up that $10k to pay your CC bills if the need arises.
However, I would warn all FTers that there is a risk in doing these kind of Kiva spends. Even if some of you have done your due diligence, and find that the company backing Kiva is financially sound and a legitimate operation there is always a possibility that Kiva can close down overnight. I strongly doubt that Kiva or its parent company has any credit rating, so Kiva loans are going to be akin to junk bonds. If a default happens for whatever reason, I would expect that all outstanding "loans" will be something that FTers will not get back, not without a costly and long drawn out litigation... assuming that Kiva is based in the US.
So, while I know many kind folks think that Kiva spends is a win-win scenario for all, I would exercise restraint. If you are churning $10k through Kiva, make sure you can cough up that $10k to pay your CC bills if the need arises.
There's risk in almost anything involved in this game. If something was very little risk, it would get outed so fast and then heavily blogged and then shut down almost as fast. This is not a game for people who are risk averse. Like djrez4 I will be using Kiva to micro-lend, any miles earned are truly gravy.
Nov 17, 2012, 7:20 am
#11
Join Date: Aug 2009
Location: RDU
Programs: A few
Posts: 5,499
Nov 17, 2012, 7:25 am
#12
Join Date: Dec 2009
Location: NYC (often in Thailand, Israel and Sweden)
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Posts: 382
I hardly think that these loans are large enough to finance criminal activity. The repayment rate is very good if you do your due diligence, and you help turn people's lives around....what's bad. BTW, my repayments after five months are 40 percent, so things are going just fine.
Nov 17, 2012, 7:30 am
#13
Join Date: Aug 2009
Location: RDU
Programs: A few
Posts: 5,499
I hardly think that these loans are large enough to finance criminal activity. The repayment rate is very good if you do your due diligence, and you help turn people's lives around....what's bad. BTW, my repayments after five months are 40 percent, so things are going just fine.
I don't mean to p*** too much on anybody's fire, but I have looked at Kiva a few times and concluded it's not for me. There are other ways for me to make my contributions to society that I fundamentally feel more comfortable with.
Nov 17, 2012, 7:33 am
#14
Join Date: Mar 2010
Location: mountains of western NC
Programs: Life, Love and Laughter
Posts: 8,539
I also suspect that your suspicions of fraud and criminal activity are baseless.
Nov 17, 2012, 7:35 am
#15
Join Date: Mar 2010
Location: mountains of western NC
Programs: Life, Love and Laughter
Posts: 8,539
I commend the positive aim. I really don't see how you can do any real due diligence though. In deal terms, the seller is always providing you with due diligence materials. That is a recipe for abuse. Easy enough for a small time drug runner to post some pictures of some lady in the village making mats claiming she needs the money to feed her starving children.
I don't mean to p*** too much on anybody's fire, but I have looked at Kiva a few times and concluded it's not for me. There are other ways for me to make my contributions to society that I fundamentally feel more comfortable with.
I don't mean to p*** too much on anybody's fire, but I have looked at Kiva a few times and concluded it's not for me. There are other ways for me to make my contributions to society that I fundamentally feel more comfortable with.