Bugs and New Repayment System - Q&A With Kiva CS

[Guest]

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[dh]

Gerard,

Thanks for your response. My concern is that the system seems to have been developed to optimize accounting transparency to the exclusion of all other factors, including the users' lending experience, and that this will result in reduced lender involvement and reduced lending.

From my point of view, you have thrust a lot of unneeded back-office accounting complexity upon the lenders. I'm sure that the accounting wonks are delighted, but I don't believe that, for the typical lender, the benefits in transparency associated with foregrounding these details even remotely justify the increase in complexity. No matter, the new system helps the MFIs, and I can ignore the details. If you have a real concern with meaningful transparency, though, let me easily see which of my loans are delinquent, keep me fully informed on the current status of problem MFIs, and follow your own policies on declaring loans defaulted.

Of more concern to me is the change in the lending experience. Everyone benefits when a continuous stream of new loans and repayments encourages lenders to visit the site regularly. If I have a few credits coming in every day, I'll check in with Kiva, see what's available, and maybe add new money for that loan I can't resist. If repayments bunch up, lending becomes a chore and I won't drop by as often. Seriously, would you patronize a store where one day they give you a $100 credit limit and the next $500, where one day they're overstocked and the next empty?

Please find some way to reestablish a steady flow of loans and credits. Perhaps MFIs could have daily quotas, with loans popping up throughout the month rather than bunched at the beginning. Our electric company offers a levelized billing option, spreading out the peaks and valleys of seasonal variations in power consumption. Perhaps  Kiva could offer a similar option for repayments, gradually releasing them to individuals in a steady stream. Cash flow should not only be more liquid than under the old system; it should also feel more liquid.

When you create a personal one-to-one lending environment, you have to expect people to take things personally. The strong feelings expressed in this forum are in some measure an indication of Kiva's success. Keep in mind that if you neglect the lenders, you put the entrepreneurs at risk, and Kiva is ultimately about the entrepreneurs. When frustrations build up, I find that there is no better way to remember why we are all in this together than to make a loan. If you will excuse me, I think I'll do that now.

--Don 

[Eli]

Gerard,

Nothing was mentioned about the private data of borrowers being compromised on team lending pages or if this is being addressed.  I wrote to Kiva when I noticed the glitch via contactus@kiva.org on 10/31 and received a response from Liz on 11/3 thanking me for pointing it out. 

I also sent Private Messages to both you and Fiona on 10/31 via KivaFriends because I recognized the glitch on a Friday, and I thought private information was something that needed addressed immediately and thought you might check KivaFriends over a weekend more than you would at contactus@kiva.org.

The glitch is still prevalent this morning, and there is no mention of Kiva addressing this issue in your post. 

To me when a borrower request that their last name be kept private, it should be just that.  But once someone gives a loan to a recipient and credits it to a team, the full name is exposed on the team lending page, so no longer private.

Let me explain this visually:


'Carmen Rosa' "For privacy reasons, the Field Partner has requested that last name be undisclosed":



You can find the privacy post to the right of her image here:
http://www.kiva.org/app.php?page=businesses&action=about&id=73864


Then see how her full name of 'Carmen Rosa Maldonado Javier' shows up on a lending page:





Hopefully this will be addressed pronto.

Eli


EDIT:  I found one Iraqi loan that was compromised.  This is serious stuff.

[waywardcats]

I just want to note that while I no longer have a record of the exchange, I had reported a very similar issue a few months ago.  In that case it was with this loan to Yolanda. 



Yolanda's full name, and possibly also her specific location (I do not recall for sure) had been disclosed in a repayment notification email.  I received a quick response that bug was corrected, but it would be a service to our entrepreneurs and our partners for us to remain vigilant and report these errors when we see them.

-Kerry-

[Gerard]

Many thanks, Gerard, for all this. After a bit of study, much will be clearer. Just one question - rather than the torrent of repayments on the 15th monthly, wouldn't it be better all round to spread them, say Africa on the 5th, Latin America on the 15th and Asia on the 25th (with Middle East and Eastern Europe fitted in where convenient)?

Howard

The reason that repayments may be clustered around the 15th of the month is because that's when we bill our partners. It makes more sense and is simpler to keep everyone on the same billing cycle than to spread things out regionally. Because of net billing you'll see most payments paid into your account around the 15th, 16th, or 17th of the month, but you can still see payments later than that if the partner has to send us a wire for the balance.

[Gerard]

Thanks Gerard, this is helpful!

Kiva Lending Teams Question:  As a team leader, why do I get a message someone has joined a team but the team doesn't show up on their lender page and they don't show up on the team members page?

One possibility here is that they joined the team and then quit right away or soon after. This is the first instance I can remember seeing this. Initial thoughts are that this isn't a bug - just someone being fickle about teams. However, if you can confirm that a person did indeed join a team and didn't show up, please PM those details to me.

[RichardF]

One possibility here is that they joined the team and then quit right away or soon after. This is the first instance I can remember seeing this. Initial thoughts are that this isn't a bug - just someone being fickle about teams. However, if you can confirm that a person did indeed join a team and didn't show up, please PM those details to me.

Thanks, Gerard.  Since you consider this to not be a bug, then my request is to add another message to Team captains when a member quits a team.

[abc]

As a team leader, why do I get a message someone has joined a team but the team doesn't show up on their lender page and they don't show up on the team members page?

I haven't had this happen, but that doesn't mean much, since my open
teams are small.
Have any of you team captains to whom this has happened tried PMing
the people who were alleged to have joined, to see if they did this
intentionally? Might be a way of narrowing down the problem.

[AccountAbility]

Gerard - Thank you for initiating this dialogue.  At this time it is a critical communication link.

One aspect of your long post has me puzzled.  Your examples show the old system as having repayments scheduled based on the date fully funded on Kiva.  That doesn't track with virtually every loan I have going back--They all have repayments posted based on the disbursement date (in the Kiva system.)  Your example in the new system shows actual borrower repayments on the 23rd, based on the date fully funded on Kiva.  That seems unrealistic. The fully funded date would seem to have virtually no relationship to the actual disbursement to the borrower.  Will we as lenders still received the update emails (assuming so elected in the profiles) giving us an actual disbursement date?  Will this now be the actual disbursement date to the borrower.

Lastly, I hope Kiva will rethink the posting dates for repayment credits to lenders.  As someone has pointed out, this produces a significant degradation in lender experience.  Surely some of the more established MFIs can handle billings faster than 15 days after the billing cycle, and maybe a few could well use another few days or so.  There has got to be a way to move away from this feast or famine cycle of lots of credits all at once and then nothing for a month.

Dan

[Gerard]

Now I have 2 questions:

• How will Kiva explain to the lenders that a 4 month loan has really 5 repayments when the repayments are computed by weeks and not whole months, whenever the loan does not start at the beginning of the month? It is in this case not a bug, but it must be properly explained, otherwise contactus will be swamped by misled lenders or, worse, potential lenders will walk away as they don't trust the system.
• Often, at least in my part of the world, borrowers pay the same amount for each instalment. In the beginning, the remaining loan amount is high and so a large part of the repayment consists of interests. Gradually, the interest payments get smaller, but a larger part consists of the capital repayment. As we lenders get only the capital part, shouldn't we get rising amounts over the loan period? If we get fixed amounts during the loan period, it means that the MFIs are underpaid in the beginning and are subsidizing our lending activity. That is not what we wanted, is it? Or do borrowers by chance make fixed capital and variable interest repayments, which means for them decreasing instalments? I don't believe so. Has anyone spotted a repayment schedule with increasing amounts over the period?

On point one - yes, you're correct - we have to find a way to better explain some of the odd cases and non-traditional repayment schedules such as this one. That's something we'll work on and push as soon as we can.

On point two - the Field Partners get to set the repayment amounts and the schedules, so it is up to them how they would like to handle repayments. Most will keep the model where they repay the same amount every month. However, each Field Partner is different and will handle situations like this differently. That's one reason why we made this system - so that our Field Partners have the flexibility to report and make repayments as they see fit.

[Ulli]

One aspect of your long post has me puzzled.  Your examples show the old system as having repayments scheduled based on the date fully funded on Kiva.  That doesn't track with virtually every loan I have going back--They all have repayments posted based on the disbursement date (in the Kiva system.)  

Dan

Same here. All my loan repayments are counted from the disbursement date not the date when the loan was fully funded.

Ulli