The reason my family and I are going to stop lending here.

[Guest]

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[greybuffalo]

Kiva to us,undererneath the veneer appears now to be money grabbing.
We have been lending solidly for about a year,yet I have found that when a borrower pays back some money and I would like to use that to pay part of my new loan, one cannot? and I cannot withdraw because,they say it is too small to withdraw.
All that money that Kiva holds,must earn a tidy sum for them in interest and you will notice that before they had a contact email,now it has vanished???
It seems a bit hostile to us....for that reason,sadly we feel that this organization has changed into a entity and we will not be contributing here again.

[cpbailey]

I know rumors say that we will be able to reinvest the repaid amounts in the future.  I suspect that at least some of the delay is that there will be programming and testing to ensure that it is accurate.  Also, the partners who are on autopost for payment will have to have some time to correct payments when they aren't made.  A final consideration is that Kiva has two repayment types from the field partners.  The first occurs when the partner gets more loans in a month than it makes in repayments.  This is then netted out and the partner only receives the difference at the end of month.  The second occurs when a partner for whatever reason must make a net repayment (Kenya has a number of partners which are not qualified to receive new loans, probably some because Kiva is now over 30% of their assets.  Also, MBK which may be taking a break  Moldova finds it is not making enough loans under $1200 to post regularly).  Net repayments are done on a quarterly basis when a partner owes money.  Making these calculations and taking into account partial repayments when the rest of the loan is not repaid (such as SEED).  Has many areas, and as you said there is a lot of money involved.  Kiva cannot afford to make mistakes and have to rework them to speed up this process.

Finally, the interest that Kiva gets becomes part of the operating fund.  I know of few charities which say give us a little money to use for a few months and then anything to pay for operating expenses is totally optional.  The interest Kiva gets is overnight funds rate.  It must be available to repay us.  This rate is fairly low.

If you feel it is not to your taste, then simply wait for the new system.  We all hope it is sooner than later.  It would mean a lot to know that I can help more people quicker with what small amount I feel comfortable investing and reinvesting.

Colette

[Jan & John]

and you will notice that before they had a contact email,now it has vanished???
It seems a bit hostile to us....for that reason,sadly we feel that this organization has changed into a entity and we will not be contributing here again.

I just checked the contact us - and you are right - http://www.kiva.org/about/help/email - the link is not active...
Kiva has had many growing pains since I joined in November but Kiva Friends have taught me to be patient...
...so I am sure it is down for a reason ? and will appear again soon...
Someone else will surely give you links to the discussions on why we don't get paid back till it is totally paid off - I am waiting patiently for my first pay back in July - and then I will definitely be lending again.
Jan

[Tomcat]

The contact email seems to be working okay now and was working this morning when I emailed them, getting a personal response back in about 7 hours. It must have been a temporary problem.

I too would like to be able to reloan money immediately as it is repaid rather than waiting until the loan is fully repaid. But I read the details on the website and knew how the system worked before I made my first loan, so I knew exactly what I was getting into. If Kiva eventually starts crediting payments back to lenders immediately, that'll be great, but I'm sure that making the change will be much more complicated than it might seem at first glance, so I'm not holding my breath waiting for it.

Tom

[charity]

greybuffalo:  I am sorry to hear you have been so disappointed.  I obviously cannot speak for Kiva, but I wonder if some things have just been unfortunate mistakes/growing pains, and not out and out purposeful bad practices.  For example I saw that you said you could not withdraw money because Kiva said it was too small to withdraw.  I have only withdrawn money once, and it was less than $25, and I was able to withdraw this amount with no problem, it just took a few days for the paypal transaction to complete. 
I also know that on some of the most recent blog entries on Matt Flannery and Kiva (see the 3-1-08 post at: http://www.socialedge.org/blogs/kiva-chronicles), they have been asking people to reinvest or withdraw the returned money, and have also stated intentions to allow for people to reinvest money paid back on loans not fully paid back later this year.

[AccountAbility]

Greybuffalo, I too am sorry that your experience with Kiva has turned unsatisfactory. Kiva is a very lean operation with a small staff doing an incredible amount of work as Kiva grows exponentially. 

Initially, the funds held by Kiva, either in transit or awaiting full paybacks on loans, were quite small and the interest earned was just a drop in the bucket compared to the expenses of maintaining the operation. Even with this interest, Kiva has sought charitable donations to at least break even. 

Now that the monies held in transit and on partial loan paybacks has grown substantially larger, Kiva has been researching ways to start giving those partial loan repayments back to the lenders sooner than at the final payoff of the loans.  As has been mentioned, this is more complicated and administratively costly than first appears, although I have little doubt that Kiva will figure out a way to accomplish this.

But in any event, the availability of your loan funds was explained in the FAQs on the website from the beginning.

Regardless of your final decision to stay with Kiva or not, thank you for allowing some of your funds to be used this past year by needy entrepreneurs around the world.  You truly have helped give them a hand up -- and that is ultimately what Kiva is attempting to do.

Dan

[Robert]

Greybuffalo, if you don't like the fact that partial loan repayments are withheld by Kiva, you can fund loans that are repaid in bulk at the loan term. They are not easy to spot as there is no sort function available for this option, but we know that many loans offered by Caurie Microfinance in Senegal are fully repaid only at the end. Right now there are 4 such loans on offer: http://www.kiva.org/app.php?page=businesses&partner_id=105&status=fundRaising&sortBy=New+to+Old. Like that, your money will be fully working in Africa while you don't have it.

Robert

[cpbailey]

Robert,

I like your creative solution.  Senegal is an interesting country as it is a democracy, too.

Colette

[ulrike]

Hello Greybuffalo,
I admit that I thought the same as you a few weeks ago. I like the idea of microlending, because my money will help several people . But after reading the different issues on Kiva friends and the blog of Matt, who explains why in 2005 it really seemed too complicated to develop a different system and how money is flooding from the MFI to Kiva, I continue lending. I hope though that Kiva will develop soon a system, which will recredit  our accounts every 3 month (to avoid the costs to send the money around the world and  because Kiva has to be sure that the money is repaid before beeing able to  credit on our accounts).

Greetings from France
Ulrike

 

[Cactusjack]

Hello greybuffalo,

I disagree with you wholeheartedly. The monthly cost to keep Kiva going is huge. You have to remember that at this point in time that Kiva is a 30 million dollar organization. Do you think the money to keep Kiva going grows on trees. Sure, there are a number of corporations that help cover some of Kiva’s costs but not all costs. PayPal does the financial transfer work for free so I am told. But someone has to cover the payroll and all of the other costs. The outstanding people who work at Kiva (have you checked out their profiles) are top notch corporate people. While I am sure they could make far more money in private industry, they don’t work for Kiva for free. I feel quite sure that the interest that Kiva makes on that “float” of incomplete paid loans is a major source of income to keep Kiva going and making “free” loans for you. They could take that float income away by crediting you with repayments as paid but you might see a $2.50 per loan fee to replace the lost float interest income. As long as Kiva doesn’t start giving out million dollar yearly bonuses to the top executives I have no problem with them using the interest on the partial repaid loan float to help support the organization and keep loans free. If Bill Gates, Warren Buffett, Angelina Jolie, the U.S. Government, or anyone else ever picked up the overhead costs of Kiva I would be first in line demanding that loan payments be credited as they are made.

Being a computer programmer in one of my past lives I can tell you that programmers don’t come cheap. And Kiva has outstanding programmers. How do I know? Simple, just look at the Kiva Web Pages and how informative and efficient they are. The Kiva Pages are excellent and I see new changes almost weekly. Have you noticed that the pictures are now larger, there are 20 loans per Page in stead of 10 saving you from having to page so much?  Now the total number of loans to be funded is in the upper left of each Loan Page. At the top of the Loan Page you now have the weekly loan statistics that that cycle through about a half dozen stats. There have also been major improvements to the Portfolio, Loan, and Lender Pages. All of this cost money and Kiva must find the funds to cover the costs somewhere.

If the problem is just being able to make more loans quicker there is an easy solution for that. Just select short term loans to fund. I have been a lender for 13 months. To begin with I paid no attention to the length of my loans. Most were 12 to 18 months. About 5 months down the line I was checking out a lender who had over 200 loans with many repaid. I noticed when checking out the lenders portfolio that many of the paid loans were for 4 months or less. At that time what I enjoyed most was the selecting new loans. The light came on in my head that if I selected 4 month loans and shorter that my turnover would be greater and I could be selecting many more new loans to fund. So starting in September of 2007 I started selecting shorter term loans. So far in the first 17 days of May I have made 27 loans. 24 of those loans were re-loans. Of those 27 loans made in May, 2 are for 1 month, 5 are for 2 months, 5 are for 3 months, 8 are for 4 months, and the remaining 7 are for 6 to 12 months. After 3 months of 20 to 30 loans maturing a month I am going to look for slightly longer loan terms in the future. It is wearing me out finding new loans. So too much of a good thing can turn out to be bad. Regardless of the length of the loan I am a sucker for Butcher Shops and Fish Sales.

I hope that you don’t give up on Kiva. They do an excellent job at no cost to you, i.e. free. But to keep their service free someone has to pay hundreds of thousands of dollars a month to keep the service going. Your “float” interest is of one of the incomes that Kiva uses to keep the service free. I think that Kiva does a fantastic job with what few funds that they receive from all sources.

My thanks also goes out to the officers of Kiva who I am sure work for less than is available from profit making corporations.

Jim aka Cactusjack
A Happy Kiva Camper