Concern over Kiva

[Guest]

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[Dagfinn]

If a newcomer check out the message Kiva greets her/him with I find these as parts of the claims one is invited to buy into as positively wrong and/or highly misleading.
What makes it worse is that Kiva have been told of these for months at end without taking corrective actions - what does that say about Kiva? 

Claim
The people you see on Kiva's site are real individuals in need of funding - not marketing material.   
Fact
The people you see on Kiva are almost without exception individuals that have got their funds from local MFI’s that are on Kiva in order to attract cheaper finance trough refinancing.

Claim
Kiva's mission is to connect people through lending for the sake of alleviating poverty.
Fact
Kiva’s original mission of connecting people through lending have over time taken lesser and lesser focus and no development are known that focus on this mission of theirs.

Claim
Kiva partners with existing expert microfinance institutions.   
Fact
Judging from past performance that is in a handful cases disputable.  Kiva has worked hard on several fronts to aid the MFI’s and deserve some merit for doing so. 
Their effort helping those in need seem less commendable.

Claim
Kiva provides a data-rich, transparent lending platform.   
Fact
One merely have to browse Kivafriends to understand Kiva is perceived as far from transparent, on the contrary they demonstrate repeatedly as being sunstruck from internet fame and at times appear as blatantly datapoor and self righteous like last documented with Bosnian loans were they blame paying entrepreneurs for ZzZ not paying and with online bookkeeping that does not support their case or are not transparent – any way a violation of their claim.

Claim
The individuals featured on our website are real people who need a loan and are waiting for socially-minded individuals like you to lend them money.   
Fact
Yes, they are real people mostly but the quality is not top notch as it used to be.  Double listings and examples of definite non sound business request are part of the portfolio listed.
Transparency have seen a major setback now when some loans are not translated.

Claim
When you do, not only do you get a unique experience connecting to a specific entrepreneur on the other side of the planet, but our microfinance partners can do more of what they do, more efficiently.   
Fact
Highly questionable.  The MFI have to make photos, produce write-ups and in general have a high administrative burden to get funds through Kiva.

Claim
Throughout the course of the loan (usually 6-12 months), you can receive email journal updates and track repayments.   
Fact
Usually loans now are spanning 6 to 24 months and more.  Email journals are often automated and impersonal giving no connection between lenders and the entrepeneurs.
The repayments have undergone some improvements but the data may lack quality or often are not timely delivered.

- Dagfinn A

[charity]

This is an update on your loan to Charity Uzor in Nigeria.

Charity sells foodstuff and school sandals and with the last loan her sales increased and the children school fees are paid on time. She and her husband plans to move into a better accommodation. Thanks to kiva lenders.

Personally, I disagree with all of the "Facts" stated below, and this journal entry that I received today is just one example of why.  I feel that Charity in Nigeria (with her 10 month loan through an MFI that we have seen no problems with) is real, and I feel connected with her, despite the fact that her loan was dispersed to her 9 days before I helped fund it - I am happy Kiva and the MFIs have worked out an efficient way to keep the connection we all like, without making the connection inefficient to the point that it becomes unfeasible, and this is transparent to us.  I feel as if I have somehow, in a small way, made a positive difference in this Charitys life, helping to fulfill Kivas mission.

Sure we have concerns and questions with MFIs, currency risk, and transparency, and I think Kiva is being very active in trying to address our concerns (and we don't raise easy questions) - they have a KF liaison and monthly community conference calls, the arrangements with Ernst and Young and Moodys, etc. While I think it is important for us to ask questions and provide criticism as a users community, I personally think we spend too much time focusing on the negatives here and not enough time on the positive.  I mean, almost every time I go and read some of the Kiva Fellow blog, I am impressed and excited over what Kiva is doing. 

[Bastet]

^ pretty much what she said

No organization is perfect, and no organization stays the same over time. Things change, they need to change, and nothing is ever ideal. That's just one of those things. As far as I can see, Kiva is doing a damn good job, and just making some mistakes along the way. These things happen. Mistakes get made. Original ideals might end up being unattainable or even damaging to the organization as a whole, and so the focus needs to shift.

Honestly, if you've got so many problems with Kiva, why stick around?

[Dagfinn]

When to listen to the heart and when to use the mind is always a question and more – how to combine the two I find the most difficult of all.

With my heart I see Denisa having two jobs to make ends meet hoping that in the future do more on her farm.  I was happy to be one of those able to aid her on her way and felt very good when I received a personal response from the administration.  It had the qualities of person to person lending which I praise highly as I believe that is also a peace effort as well as alleviating poverty.  Something in great demand in a region were many civilians have to pay the price of Western policies carried out the hard way, even with bullets.

Next time they visit she is a way on another job but they dutifully report greetings from her mother.  But then Kiva stops all lending to ZzZ claiming that the entrepreneurs are behind in payment, though the bookkeeping posted document the contrary.

My main point is that this is one example where Kiva achieved their mission advocated but for reasons that not posted publicly do not make sense and definitely are not transparent they stop.  I think during my two years on here that there are a community that would leap at the chance to provide funding in the most difficult of times like in a country like Bosnia and Herzegovina.

I can go on with others, like Elena in Moldova.  Her books show me that she pays
steadily and on time (except for September if not that is the case of late updates as we see often) but the MFI is behind.  Being the poorest of poor countries in Europe and having seen similar conditions in that area my heart cries out for the work people like her do when she hardly spend on herself but provide a much needed health service in a geography were the government have little or no positive influence of their quality of life.

I for one have NOT the same hurry as Kiva abandoning people like Elena, it is in times like these we should stay shoulder to shoulder with each and every one of them.

I think many of us have similar stories from earlier on (but after when Kiva launched their team functionality a shift in the mentality came along among lenders and maybe Kiva itself) and and have asked ourselves what can be done.  So the mind kicks in and one cannot help but notice that the Kiva story is as before but the execution of it not.

It is precisely for that charity that I voice my concern as if Kiva becomes just another organization we can all have a stronger and more personal person to person involvement many other ways and with zero overhead, that is one blessing of the internet age.

Your words on focusing on the positive is correct and we tend to lose out that.  But again, it is precisely the excitement that makes me cry out for Kiva to reach its full potential!

A word for you Bastet, I have not asked for Kiva to stay the same – I point out that it needs to communicate truthfully and transparently as it executes its operations.  The most surprising point is your line where you presume I have so many problems with Kiva and why I stick around.

I do stick around Bastet as I believe Kiva is some of the best we have – and I want Kiva to strive to be the best there is.  Pretend that all is ok or leave is not constructive if progress is to be made.

Be well, Dagfinn A

[granite]

I guess I do still feel the connection to the loan recipient only because I know if they default, then it is reflected in the money I get back.  That does fly in the face of my only loan to have defaulted was from FSMA where internal fraud caused the MFI not to pay back, not the lender.  That represents 4% of my loans paid back but actually .9% of my over all money invested.  I guess it's a reminder that the money does go through several hands to get to the recipient and back to me.  Much like taxes... it all goes into a big pot and gets dispursed from there.... but it's the theoretical ear marking that at least keeps the connection real for me.

I do agree that transparency could be better.  I had considered doing a Kiva day at a local group where people could log into computers choose their loans and get their first KIVA experience.  But having to explain the nuances of how MFI's pre-payout the loans and the perceived disconnect from that makes me uneasy to the point I've put that kiva day idea on hold.  I'm still also trying to wrap my head around group loans and if they are purely a community building exercise as some claim or if a high level of pressure is placed upon those who are struggle. 

Lending is a complex thing which can be at odds with the more simple message that Kiva sends.  It sounds simple to send money to family to buy a goat and then recycle their payments towards other families.  But as Kiva grows up and as we become more invested, we're learning it just isn't that simple.  Considering the large amount of money moving between Kiva and MFI's while considering it is all being done $25 at a time, it truly is staggering what is being accomplished.

I have no idea if I'm over thinking these things and if my concerns are real or merely theoretical but I think that stems out of Kiva at times in the past not totally being clear and perhaps being guilty of over simplification.  I do appreciate their efforts to fix this and it seems clear to me that they are.  However their plans are ambitious for the next 5 years and hopefully they can become large while still staying true to their roots.

Despite these misgivings, I do like Kiva, I do "invest" in Kiva and perhaps have a bit more tied up in their than I like to admit.  So perhaps as I do get more invested in Kiva perhaps my scrutiny has increased and perhaps others have too.  Perhaps this results in some more criticism of Kiva as a whole, this is actually a reflection of their success and people's desire to contribute to something great. 

[scottylend]

I must agree about the infrequency of journal updates.  I've got quite a few loans and have received nothing outside of the automated 'money has been distributed to...' emails which is not what I was expecting at all.

[JoanW]

As Charity points out - we should spend more time focused on the positive - and, yes, a lot of time is spent on the negative.  Also KFers do ask pretty tough questions. I don't know how that compares to non-KFers...but I have always felt that KFers are more interested in, care more about, pay attention to Kiva than a typical Lender. After all, if we did not care or have a strong interest in Kiva, we'd just drop off our $25 and move on.

Kiva does spend a fair amount of time & energy trying to answer the questions - a KF Liaison, conference calls, etc. Those were (I believe) a response to KFers passion for Kiva and wanting to understand as much as they could about how it works, as well as help Kiva be the best it can be.

Having said that, Dagfinn points out what is obvious to many here - but may not be obvious to someone new to Kiva. Things on Kiva do not work as described. This is not about how they work, or how they could work better - it is just that they work differently.  I would not agree that all his "facts" are facts, some area arguably opinions - but the point he is making is that Kiva should look at how it may be misleading the new person by not updating it's messages to reflect the way Kiva is growing and changing.

Just looking at my loans - only 12% had a meaningful update or anything beyond the "Thank you for the loan, it's been disbursed" form entry. While I love each journal update I get, this is clearly an area where the reality is different than how it is advertised.

[granite]

Has there been further talks with Kiva about this?  I went to do my loans this month and I've noticed more detailed interest information as well as information as to whether or not loan was already given out?  Certainly a step in the right direction.

[Dagfinn]

You are absolutely right granite - I have tried from time to time pretend I am new to Kiva and the last changes are a major step in the right direction and pleases me immensly!

I think a lot, maybe most, of the critisism pointed out are now void  Kiva

Be well all, Dagfinn A

[granite]

Yeah... pretty much everything but the journal frequency issues.  Which personally I'd rather MFI's work on the business of giving out loans than journal entries.    If every one of my loans sent me a journal entry every month I'd probably have to turn the E-mail notifications off.

Thanks Kiva for the changes.