Why do some loans have status Raised for many days?

[Guest]

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[Dagfinn]

I have tried to look around for answer to one question that puzzles me; in Aserbadjan they still after 10 days have not paid out the money raised - am I impatient or is there a matter of this MFI to be slower, than in Ukraine for example where they are paying ot the next day as it appears to me, or do the procedure vary from country to country?

I a just eager to see my small sum be put to work with the rest you the loaners, thanks!

[KivanSteven]

I wouldnt worry much dagfinn...at times one just needs to be a little more patient...I have had loans disbursed the same day as it was raised, and then I had one that took over three weeks...Im sure the MFIs all work differently, and according to their own schedules and methods, etc...sometimes they might just be extremely busy--which is a GREAT thing actually...what you can do if you are having trouble with waiting is make another loan...   satisfy the urge to see your loan in action...Im not sure which MFI's/countries get the loans out the quickest, but from my personal experience, I almost never wait, with the exception of only a handful, more than a couple days for loans to the western hemisphere, but dont let that bias you one way or the other, just my experience.

[Joe]

Welcome to Kiva Friends, Dagfinn.

As I understand it, some MFIs wait until they actually get the money from Kiva to give out to the recipient(s). If memory serves, sometimes they'll wait until a bunch of loans have been funded and then get the lump sum sent over to distribute to everyone.

Other MFIs that fund loans quickly usually have a cash reserve on hand, and once a loan is funded (or sometimes before), they'll give it to the business right away and then replenish their reserve when they get our money from Kiva.

I believe that's what causes some delays. Someone correct me if I'm wrong.

The longest I've waited for the Raised status on a loan I made to change was somewhere around 32 days. 

[Diane R]

Yes, remember Dagfinn that the businesses do not get money directly from Kiva.  The Kiva money goes to the local microlending agencies (MFIs) which then distribute to the borrowers on their own schedule.  It used to be that Kiva only sent money to the MFIs at the start of each month, but this might have changed.  So, a loan that is Raised at the start of a month might wait until the next month for Kiva money to go to the MFI, and maybe even another month for the MFI to give the money to the borrower!  Some MFIs, though, have an account of money which they give to borrowers right away, and when the Kiva money arrives the next month it fills in the account for the next person.

There are also some MFIs (Action Now: Kenya is one) where someone from the MFI "goes shopping" with the borrower, to buy their supplies with them, rather than just handing over the money.  It all depends on each MFI, they are all different.

There is also the sad fact that a very small number of MFIs have internal troubles (W.E.E.C. is one, GHAPE seems to be one) where borrowers can wait many months for their money.  I am waiting for two loans which were Raised on JULY 31 to become Active, but happily there are not many of these.

Good question, Dagfinn, and keep asking!  Soon you will be an expert about Kiva. 

--Diane.

[KivanSteven]

Its unfortunate when a newcomer encounters a slight issue, conflict, or problem with Kiva and the whole process because compared to how well things flow most of the time, these problems really are a pretty rare occurrence overall.  I had one loan default, (Witep-an MFI not an entrepreneurial issue), in the 13 months Ive been a member of Kiva.  It was one of my first loans, and though it didnt default until many months had passed, I still only had one or two other loans at the time that were being paid off.  But I didnt let it deter me from loaning further because I educated myself, primarily through kivafriends, and realized these are isolated issues and that Kiva, sooner or later, comes through to rectify the problem.  From the beginning, other than that single issue, I have never had another problem with any loan, any transfer of money, any repayments, etc etc....so things happen on occasion, but if I have one, two, maybe three loans default out of what will hopefully be 300-400 loans per year, then I can weather that problem because every other loan was successful and I cant deny the enormous significance of that.  So dont get discouraged is all Im saying...you might encounter an issue here or there, but there is no consistency to them, just sporadic and usually minor.  If the truth were far from that I would imagine many of us would not be the Kiva supporters we are.

[Claus-Peter]

Its unfortunate when a newcomer encounters a slight issue, conflict, or problem with Kiva and the whole process because compared to how well things flow most of the time, these problems really are a pretty rare occurrence overall. 

Hi Steve,

generally  

More in Detail, it is absolutely not seldom that the time frame for paying out loans is 10 days or even more. In addition, we should not think, that every item raised is an "attack against Kiva". For sure not ... When we are discussing such topics, we are doing that, because we hope to find areas for further improvements. This should not been mixed with the fact, that Kiva and the MFI's are doing in sum a very great job ...

42 % of my loan portfolio (yeah, it is of course a quite young portfolio) is raised, but still not active. From the statistic point of view, it takes on average 14 days, till a loan is paid off. But there is a huge spread within these numers. Some loans are getting active within hours as well. So a huge part of loans is waiting maybe 1 month or even more.

Claus-Peter

[Claus-Peter]

So, a loan that is Raised at the start of a month might wait until the next month for Kiva money to go to the MFI, and maybe even another month for the MFI to give the money to the borrower!  Some MFIs, though, have an account of money which they give to borrowers right away, and when the Kiva money arrives the next month it fills in the account for the next person.

Hi Dianne,

your description is absolutely right. This is exactely the status quo.

From my point of view, more MFI's should be able to pay out the loan immediately and not to wait for the Kiva money. Especially, when the MFI itself has already a longer Kiva history.

Why ? Because they can keep the Kiva money that is already paid back by the entrepreneur but not being repayed to the lender up to now.  This could be considered as a very good source of financing for the MFI's ...


Claus-Peter

[cpbailey]

Kiva is one source of funding for loans for the partners.  And Kiva borrowers are a small percentage of total borrowers for a partner.  I suspect that it is simpler to give a firm date to Kiva borrowers on when the loan will be ready rather than wait for loans to be repaid.

Plus, the reloan funds only works when the month to month loans are the same amount and have been steady for the duration of loans.  So if loans for a given partner are 10 months, only 10% of the amount is repaid on the first repayment date.  It isn't until loan volume is stable for 10 months that it can even work to fund Kiva new loans.

The best situation is for the partner to have another funding source for bridging the time.  THis increases reliability and predictability for all involved.  I believe Prisma has $50k for this purpose, and they fund very quickly by accessing this bridge fund.  For some partners it may be difficult to access capital, so we may be the best option they have at this point in time.

Colette

[Claus-Peter]

Plus, the reloan funds only works when the month to month loans are the same amount and have been steady for the duration of loans.  So if loans for a given partner are 10 months, only 10% of the amount is repaid on the first repayment date.  It isn't until loan volume is stable for 10 months that it can even work to fund Kiva new loans.

Hi Colette,

that is right ... Out of this reason I wrote "Especially, when the MFI itself has already a longer Kiva history."

Claus-Peter

[Dagfinn]

Thank you all for sharing your experiences - that was exactly what I was hoping for.  Let me also point out Ahimsa Steve, this is not in any way critisism to kiva, just a newbie trying to understand the ropes. I guess we Scandinavians are more outspoken from nature 

Having only 28 loans which of them 20 is still waiting I became unsure about what to expect.