I don't mean to offend anyone--because I know there are differing opinions on this issue--but I happen to think it is a good thing for borrowers to pay at least a nominal amount of interest, so they won't look upon their loans as "free money." However, I know they already
are paying interest, as you said, Matt. By the same token, I think the MFIs should not look upon our loans as "free money," because they obviously are not, in the sense that we are, at least, giving up interest, ourselves, on our money. I'm guessing the latter might be
one reason some of the MFIs feel an "obligation" to try return some of the savings they are enjoying (I don't necessarily mean this in a pejorative sense) to the Kiva lenders--or maybe not!
The question of paying interest to the lenders as a way of encouraging faster funding of slow-moving loans, though, is "interesting." I, for one, though, do not know if that would be enough of an incentive to get
me to loan to some of the slow-moving loans, because I'm such a "picture freak," and base many of my loans on the pictures! On the other hand, sometimes I tend to shy away from certain loans, not because the pictures are not "attractive," at least to a certain degree, but because I am fairly certain those loans will be slow to be funded, and thus my money will be "sitting around"
forever!
As a corollary, another "incentive" that would tend to nudge me towards contributing to slow-moving loans would be the knowledge that those loans would be disbursed fairly quickly (say, within a week?), once they
were fully-funded. As it stands now, it is oftentimes frustrating to me when I
do contribute to a slow-moving loan--or to one that I expect will be slow-moving--that once it
is fully-funded, it then takes who-knows-how-long to be disbursed. I haven't actually "kept tabs" on just which MFIs are the
slowest to disburse, but rather, those that are the fastest--which to me, is another incentive to loan.
In the end, I would say, try paying interest (at least in certain circumstances), and see how it works out. For me, I would say it
might work in certain instances, and might not, in others. Of course, to stray off-topic again, improving the pictures "never hurts," either, in my opinion, so before any of these MFIs start offering interest to the Kiva lenders, maybe
some of them should put that money towards better cameras, if not short photography courses for those taking the pictures--which pictures should be transmitted to Kiva in the highest resolution possible, in my opinion. In other words, having more "interesting" pictures, of "high quality," which show the entrepreneur in their work setting, if not engaged in their work--and which do not all "look alike," from one entrepreneur to the next (if possible), I think,
might obviate the problem of slow-to-fund loans at least to
some degree. This loan, for example
http://www.kiva.org/app.php?page=businesses&action=about&id=7959, was fully-funded
overnight, if I remember correctly, even though the entrepreneur is from Azerbaijan, and asked for a "large" loan:
