INTEREST FREE LOANS

[Guest]

.

[RichardF]

I agree with Colette.  If Field Partners want to use a flat interest rate to tell borrowers how much they will pay for a loan, that's fine with me.  However, Kiva should report to lenders a comparably calculated interest rate from all partners, e.g., an average APR.  Who knows what we're really seeing now?

[AccountAbility]

To be clear, I agree with both of you regarding comparative rates on Kiva (or MIX).  I suspect, though, that the MFIs are simply quoting the rates they use for the borrowers.

Dan

[RichardF]

Okay, then I agree with Dan too!!! 

[Soriak]

Real transparency would probably require these three points to be noted separately:

* Fix costs for disbursing the loan
* Cost of training that is provided along with the loan
* interest on loan

Knowing only that an MFI charges, for example, 60% APR is not very helpful if that cost includes a course on running a business.

I'm not sure how reasonable it is to expect that level of detail though... but it would be very interesting to see.

[AccountAbility]

Precisely.

[cpbailey]

Wow, we should all go and have a drink or something!  I love it when we all can find common ground.

Kiva--do you hear?  On Kiva website, a common APR is desireable.  If there is a way to put a description of the training or other support that they get (value add) for that, it would be gravy and make the MFI look better for the price the borrow pays.  The borrower needs to get their costs explained in terms that are locally common, honest and easily understood.  Different regions will have different methods of calculating things, and different individuals will be have different levels of sophistications with money (as they do in the U.S.). 

Colette