MIFEX - concerns, updates

[Guest]

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[Natasha]

I have just noticed that MIFEX has been given a "paused" status on Kiva.  I have some really wonderful education loans with MIFEX, so I sincerely hope that they will soon be able to resolve any financial issues that they are currently experiencing and are able to start operating on Kiva soon.

I have also some loans with OI WEDCO that are also overdue. Since there are repayments on these loans, I am quietly confident that these will be repaid soon.

To share an e-mail from Liz from Kiva on this topic:

Hi Natasha,

Thanks for your email.

I know that OI-Wedco was hit hard by the unrest in Kenya in previous months.  However, I also know that OI-Wedco staff have been in close contact with Ben Elberger, Kiva's Microfinance Partnership Manager in charge of communicating with OI-Wedco and that they have indicated that they are moving forward with the collection of loan repayments and loan re-scheduling, as appropriate. 

Here is a update from Ben:

"Regarding OI-WEDCO, as you likely know most of our partners choose to automatically report repayments on Kiva and note only the exceptions, delinquencies, to the rule.  For OI-WEDCO, they've asked us to turn off this function for their old loans because of the delay and are reporting all repayments to us in Excel sheets that we manually enter.

In terms of updates on the groups, we are working with OI-WEDCO to get these posted to Kiva.  Unfortunately, OI-WEDCO's staff is currently being pulled in many directions as they rejuvenate the organization and reschedule loans and, with internet access poor, it is taking some time to post updates.  I apologize for this delay and appreciate your patience."

As this update makes clear, we are still working with OI-Wedco to collect repayment data and updates.  But, we will certainly provide more information as it becomes available.

Regarding Mifex, we recently posted a status update on their partner page:

In early May 2008, MIFEX's risk rating was adjusted downward, from 3 to 1 stars. This adjustment was made because MIFEX has recently come up against liquidity challenges that have affected their repayment performance on Kiva. The Kiva risk rating is driven not only by factors directly related to the Kiva funding relationship (such as repayment performance over time, verification of audits, and journaling coverage) but also factors outside of Kiva (such as recent financial audits, outside funding sources, changes to an MFI's overall portfolio), so these challenges have temporarily driven down MIFEX's risk rating.

We're still working with Mifex to collect repayments, and we'll provide a further update, as we are able.

Best wishes, and please do not hesitate to email me with any further questions.

Liz

[Canadian Here]

Has anyone ever seen a once 'paused' MFI return to active status with KIVA?
I have 4 MIFEX loans, 2 of which have become delinquent.
The remaining 2 loans with this MFI have been remitting irregular payments
which I have been assured is 'typical' for this particular MFI. It's difficult for me
to believe that all 4 borrowers are delinquent in their payments. None are
agricultural loans.

Thanks.

Lorna

[Peter S]

Has anyone ever seen a once 'paused' MFI return to active status with KIVA?

I can't say I have.  I think GHAPE might have been "paused" once (it's now "active") but there's no way of telling for sure.

This prompts the thought (which I am sure has been expressed here before at the forum) that Kiva's Field Partner pages should ideally, in the interests of better transparency, have some kind of "change log" -- for changes to status (pilot, active, paused etc), and also for changes to risk star rating -- which would briefly record the date of the change, and the reason(s) for the change.  This would place current information about status and risk rating in a more useful context.

In the case of MIFEX, they had loans in the process of being offered for funding when the reduction from 3 star to 1 star risk rating took place -- see discussion here. I felt at the time and still do feel that this was absolutely not the right way to handle things, from the risk transparency point of view.  When Kiva realized that it was necessary to reduce the risk rating for MIFEX from 3 stars to 1 star, any loans then currently fundraising should have been withdrawn and lenders refunded.  Those loans should then have been re-listed so that every lender on them could be aware that the MIFEX risk rating was 1 star.  This, for anyone with the correct instincts for transparency about financial risk, should have been very clearly the only possible way to proceed in that situation, and it's regrettable that did not happen.

Since Kiva stresses transparency as a guiding principle, it seems only fair to point out occasions like this where they appear to fail to live up to their own expectations...

P

[Diane R]

When speaking with the Kiva team last Monday night, providing lender input for future directions for the site, I brought up concerns about MIFEX at least twice, and did not get any response from anyone.  (Granted, I brought up a number of concerns amid a larger number of comments and kudos and stories, perhaps they had other things they preferred to do with that time.)  I should have explicitly asked for a comment, since it is concerning me greatly.  (I invested in several MIFEX loans with my late Dad's memorial portfolio, and if I'd known they were in trouble I would have tried to stay away.)

I actually looked up the emails of the MIFEX principals last night and am considering emailing them.  Their loans are universally in arrears, and some quite worrisomely so.

--Diane.

[Canadian Here]

I can't say I have.  I think GHAPE might have been "paused" once (it's now "active") but there's no way of telling for sure.

This prompts the thought (which I am sure has been expressed here before at the forum) that Kiva's Field Partner pages should ideally, in the interests of better transparency, have some kind of "change log" -- for changes to status (pilot, active, paused etc), and also for changes to risk star rating -- which would briefly record the date of the change, and the reason(s) for the change.  This would place current information about status and risk rating in a more useful context.

In the case of MIFEX, they had loans in the process of being offered for funding when the reduction from 3 star to 1 star risk rating took place -- see discussion here. I felt at the time and still do feel that this was absolutely not the right way to handle things, from the risk transparency point of view.  When Kiva realized that it was necessary to reduce the risk rating for MIFEX from 3 stars to 1 star, any loans then currently fundraising should have been withdrawn and lenders refunded.  Those loans should then have been re-listed so that every lender on them could be aware that the MIFEX risk rating was 1 star.  This, for anyone with the correct instincts for transparency about financial risk, should have been very clearly the only possible way to proceed in that situation, and it's regrettable that did not happen.

Since Kiva stresses transparency as a guiding principle, it seems only fair to point out occasions like this where they appear to fail to live up to their own expectations...

P

I agree, Peter. That course of action would have been more transparent to KIVA lenders...oh well, maybe next time!

Lorna

[Canadian Here]

I got a somwhat uninformative email from KIVA yesterday concerning MIFEX. In it Kiva stated that there would be an announcement made "soon" (undefined time) concerning the status of this MFI and the liklihood (or not) of receiving further loan repayments from them.
To date, all four (4) of my MIFEX loans are now delinquent. :-(

Lorna

[Evelyn Yvonne Theriault]

Hi again Lorna,
I've also been waiting impatiently for news about this situation and wondering what the enormous delay (2 months  ) was all about!
The other day I took the time to read over some of KIVA's former announcements when there were MFIs in difficulty. I found the announcements by choosing DEFAULTED loans on the LEND page and then following the links to the MFI pages. I found KIVA gave extremely complete explanations of what had happened in each case. I could also see that there were some instances where KIVA might have received advice to not make any informal comments until it had completely "dotted it's i's and crossed it's t's".
I think I have a better understanding now of why KIVA has to err on the side of caution in releasing information about MFIs - especially since KIVA's high profile gives it the power to visit great damage on an MFI.
So, I've decided to cultivate a virtue I don't have much of - patience 
Evelyn

[Canadian Here]

Evelyn:

I understand all that, too.

Kiva could easily provide us with a date for an 'official' announcement, though. "Soon" just does not cut it for me.

Lorna

[AccountAbility]

I guess "soon" is better than "later". 

Dan

[saabnet]

I guess "soon" is better than "later". 

I hope they don't use soon like I do... "Soon, I'm going to start exercising again..."

-Scott