Interest Payments to Lenders

[Guest]

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[Jundee]

Since the issue has been raised a few times & I've found no poll on the subject, I've decide to post my first poll.

I know it's not very scientific but it should give us some general idea how members feel about the subject.

[KivanSteven]

I said I dont care one way or the other...not that I dont care, but in other words whatever way it goes it will go.  I dont think Kiva needs to offer interest to be successful or attract members or achieve their objectives so why start.  If they do it most likely will come from the entrepreneur and if so Im pretty much against that.  I dont want to make an interest off of poor people.  I dont want to be helped by helping them.

[AccountAbility]

Since the issue has been raised a few times & I've found no poll on the subject, I've decide to post my first poll.

I know it's not very scientific but it should give us some general idea how members feel about the subject.

Since there is a whole thread on the pros and cons of paying interest, if you want a general idea how members feel, read through that lengthy discussion.  Polls are kind of useless for this type of question.

Dan

[Henry]

I didn't get to vote!  for some reason it's locked...maybe i voted already...  hey polls are fun, keep making them!  We aren't doing brain surgery here.

[Jundee]

I said I dont care one way or the other...not that I dont care, but in other words whatever way it goes it will go.  I dont think Kiva needs to offer interest to be successful or attract members or achieve their objectives so why start.  If they do it most likely will come from the entrepreneur and if so Im pretty much against that.  I dont want to make an interest off of poor people.  I dont want to be helped by helping them.

Exactly how I feel.

[RichardF]

I think it's safe to project MicroPlace will be offering interest to lenders long before Kiva gets around to it, even if there's still next to nothing about it at SVMN or anyplace else.

[Steff]

I think paying interest negates the basic idea of Kiva.  Maybe that is just me.  But it is nice now to feel you are loaning without expecting financial gain.  That was a big draw for me. 

[krizzz]

Only if the interest is available in Kiva Credit only. If the amount slowly accumulates, and can be used to help out more and more people each time a loan is paid of I'd say it's 

[KivanSteven]

If Kiva ever does offer interest at the expense of the entrepreneur, I do hope they will allow us the option to forego our interest in order to reduce the interest that the entrepreneur pays, bringing it down to what it would be based on the way it is now.  That way Kiva could keep the members that want interest and also keep the members that have no desire to accumulate interest...assuming it ever comes to that.  I do hope they realize what a turn off interest would be for thousands of members.  Of course a turn on for thousands as well, so then if they ever do go the interest route I hope they somehow make it optional or find a way to please everybody because that has proven to be an extremely divisive and sensitive issue.

[Jundee]

If you're into Kiva as an investment to make money for yourself I would think that there are better opportunities else where.

I would think that if interest would ever be offered to lenders it would be very nominal & ultimately would be passed on to the entrepeneur.

Nobody is going to get rich from a $ 25.00 investment.

[KivanSteven]

I think if Kiva ever offered interest it would be a decision based on what is best for kiva more so than what is best for its members (not saying it would or wouldnt be).  It would be a way to enhance their services and attract more people.  I think Jundee is right and interest rates would be comparable to a savings account, 1% or so, but hey why not use it as a savings account and help people with the money you dont need and arent using at the moment.  Thats what Im starting to do, saving for my daughter whos only 6.  She obviously doesnt need the money now and 2 loans per week will add up quite a bit over a few years.  When the amount lended gets pretty high, Ill eventually pull it out over the course of a year and put it in some mutual funds or into a certificate of deposit...then ill begin making loans through Kiva again and start it all over.  I never realized until recently how incredible Kiva would be if people would place their money into it while they dont need it for the foreseeable future.  Its worth losing the 1% interest or so.

[KivanSteven]

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[ScottandMark]

I'd love to see a small interest payment that could only be used within Kiva as a credit - ie: that would build up my lendable capital over time so I could fund more and more folks, but could not be withdrawn with my original capital.

That way we coould each help more and more folks.

Just my two cents.



--Scott

[Diane R]

I've been mulling over the idea of interest paid as Kiva credit.... the practical problem with that being that it's only reinvest-able in $25 increments.  *IF* there came a time when interest was paid to lenders and we didn't have the option to opt out of it, I think I'd insist on Kiva credit only... and then I'd donate the fractions-of-$25 when forced upon me. 

--Diane.

[Spartan]

Only if the interest is available in Kiva Credit only. If the amount slowly accumulates, and can be used to help out more and more people each time a loan is paid of I'd say it's 

I agree. 

[AccountAbility]

I'd love to see a small interest payment that could only be used within Kiva as a credit - ie: that would build up my lendable capital over time so I could fund more and more folks, but could not be withdrawn with my original capital.
That way we could each help more and more folks.
Just my two cents.

--Scott

This sounds remarkably similar to perpetual motion machines--Kiva takes money away from either borrowers or MFIs to give to lenders as interest who can then relend it back to borrowers or MFIs.  Sounds like the same money. So where do we propose to take the money from to pay lenders interest?

Also, it is somewhat premature to think about Kiva loans being like a savings account, when we haven't yet resolved the legal question of whether the asset survives death. (See other thread on that one.)

Dan

[eliztravels]

Many of the borrowers are so extremely poor, and ask for so little, and pay such a high interest rate already, I don't like the idea of making money at their expense.  I would, however, prefer not to be asked for a donation each time I loan, as I'm not an American tax payer and the tax receipt is useless to me. That would be more of an incentive to me than interest. (Not that I need an incentive, as I am having to strenuously resist becoming addicted)   To achieve this I'd be in favour of Kiva charging the well-established MFI field partners a tiny percentage to cover the costs Kiva incurs in raising funds for their clients.

I know there are financial institutions that issue Guaranteed Investments Certificates and then use the funds for micro-financing.  I think this is good idea for those who want/need to make some money on their investment.  (Anyone out there know of such an institution with micro-financing GIC's for folks like me--when I had some money to invest awhile back I couldn't track one down, except one that required a minimum $50,000?)

eLiz

[Soriak]

Do you mean something like e-bay's new https://www.microplace.com/ ?

The interest rate is very low (about 2% or so) so if you're looking for an investment, that's probably not worthwhile.

I'd suggest keeping charitable lending and investment separate - you can always use the higher return from your investments to boost your kiva credits

[eliztravels]

Seems to be I've heard of a microfund GIC with a somewhat more competitive interest rate than microplace.com about 4%.  But since my google search hasn't turned up anything maybe I'm not remembering clearly. 

[petra]

Since the issue has been raised a few times & I've found no poll on the subject, I've decide to post my first poll.

I know it's not very scientific but it should give us some general idea how members feel about the subject.

i am all for making money in any kind of way, but this money is to help them! you will get your money back eventually.
if my loan makes 1 person happy, and makes their life a little bet better, then that is my profit!

[KivanSteven]

Well said Petra...if Kiva ever goes the way of offering interest, they need to ensure it is only optional because in reality they may turn off lots of current and potential Kiva users if its established that loaners make money off of their entrepreneurs...it just runs contrary to the standards of micro-lending to the poor in my opinion.

[Peter S]

i am all for making money in any kind of way, but this money is to help them! you will get your money back eventually.
if my loan makes 1 person happy, and makes their life a little bet better, then that is my profit!

Petra - well said, I agree 100%

And...     to Kiva Friends   

[Steff]

Petra - well said, I agree 100%

And...     to Kiva Friends   

I feel exactly the same way.  If Kiva did start paying interest and did not offer the option of loaning without getting interest I would no longer loan.  Once in awhile it is nice to do something for someone without expecting to get anything back except the knowledge that you made a good difference in someone's life.

[Dagfinn]

The whole point in my view is to like if you help a friend - you get your money back without interest.  The nice thing here is you have an option to do it againand again, helping more "friends" all over the globe and if that day come - you may stop and help yourself - that is hw I see it.

When speaking of interest - maybe what could be done is to tell those field partners that charge a big interest on their microloans that we are not especially pleased - I have noticed some that charge no less interest than ordinary businesses.

- which goes to proof that the transparancy offered here is a very good thing so thank you kiva!