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

[Guest]

.

[wthepoo]

waywardcats -- thanks!  I must have just missed that post.  I haven't had any scheduled to complete lately, so I assume it is, in fact fixed :-)

Sorry to disappoint you, but Kerry referred - I think - to loan confirmation mails while you seem to ask for mails confirming the complete repayment of a loan.

AFAIK, there are no such mails since partial repayments have been introduced. But you can see from your repayment confirmation mails ("Your Kiva Credit is now available for use") which loans have been completely repaid (this is an excerpt from one of mine, dating 10/10/2008):

Hi Wolfgang ...,
We'd like to give you a repayment update on the loans you've made
through Kiva.

A total of $ ... has been newly repaid!

Your funds are now available as Kiva Credit. Click here to re-lend,
withdraw or donate these funds! Or you can show your friends some Kiva
Love with a Kiva gift certificate.
https://www.kiva.org/app.php?page=account

Below is the repayment update on your Kiva Portfolio:
-------------------------------------------------------------------------------
Ntinda East b Group in Uganda (Activity: Used Clothing)
You Loaned:$25.00
Newly Repaid:$2.10
Total Repaid So Far:$4.19 (16.76% of your loan)
View loan profile at:
http://www.kiva.org/app.php?page=businesses&action=about&id=35963
-------------------------------------------------------------------------------
Kabumbi B (i) Group in Uganda (Activity: Home Products Sales)
You Loaned:$25.00
Newly Repaid:$2.09
Total Repaid So Far:$2.09 (8.36% of your loan)
View loan profile at:
http://www.kiva.org/app.php?page=businesses&action=about&id=38924
-------------------------------------------------------------------------------
...
-------------------------------------------------------------------------------
Alexander Atamanchook in Ukraine (Activity: Retail)
You Loaned:$25.00
Newly Repaid:$12.48
Total Repaid So Far:$25.00 (100.00% of your loan)
View loan profile at:
http://www.kiva.org/app.php?page=businesses&action=about&id=57378
-------------------------------------------------------------------------------
Irina Fyodorova in Ukraine (Activity: Clothing Sales)
You Loaned:$25.00
Newly Repaid:$12.49
Total Repaid So Far:$25.00 (100.00% of your loan)
View loan profile at:
http://www.kiva.org/app.php?page=businesses&action=about&id=57381
-------------------------------------------------------------------------------
Maria Anabela Chamorro Tzoc in Guatemala (Activity: Crafts)
You Loaned:$25.00
Newly Repaid:$1.40
Total Repaid So Far:$2.79 (11.16% of your loan)
View loan profile at:
http://www.kiva.org/app.php?page=businesses&action=about&id=57743
-------------------------------------------------------------------------------
Manuela Guachiac Rosario in Guatemala (Activity: Crafts)
You Loaned:$25.00
Newly Repaid:$2.09
Total Repaid So Far:$4.18 (16.72% of your loan)
View loan profile at:
http://www.kiva.org/app.php?page=businesses&action=about&id=57759

To view your Kiva loan portfolio go to:
https://www.kiva.org/app.php?page=account

Best wishes,
Kiva Staff

______________________________
Loans that change lives
http://www.kiva.org/

Copyright Kiva 2008.  Kiva is a U.S. 501c3 non-profit organization.
****************************************************************

Maybe that helps, too?!
Best wishes,
Wolfgang.

[Odette]

Gerard,

In response to your post:

Odette - this thread is intended to be a forum for those issues. If you have remaining questions, you can post them here, or PM me and I'm happy to answer them. I'm not sure what's more "corporate' about this system!

As I've said before - intended benefits are higher liquidity (partial repayments vs end of loan repayments), increased transparency (see the due dates for all of your repayments, more accurate disbursal dates, the ability to post loans with non-monthly repayment terms), easier posting for our partners (more loans on the website and greater choice is certainly a benefit) and the continued longevity and scalability of Kiva overall.

I do not have remaining questions.  Thank you for your patience in explaining PA2 over and over again but in spite of reading them over and over, my pretty little head seems incapable of absorbing accounting procedures.  I do understand Kiva wanting the repayment from the MFI’s before crediting the lender accounts and the how the repayments will be listed.  But……I still do not understand why a 3 month loan is not really a 3 month loan.

Perhaps I posted in the incorrect thread.  If so, well, that happens…..often.

Kiva has gone through many major changes and growth over the last two years.  And yes, I do feel that Kiva is moving in a more corporate direction.  This is simply my opinion and was not meant to offend you or anyone else.

As for any more ‘changes’ with Kiva in the near or foreseeable future…….Mother Mary spare me!

Odette

 

[AccountAbility]

Sorry to disappoint you, but Kerry referred - I think - to loan confirmation mails while you seem to ask for mails confirming the complete repayment of a loan.

AFAIK, there are no such mails since partial repayments have been introduced. But you can see from your repayment confirmation emails...[that show 100% repaid].
Best wishes,
Wolfgang.

It is not exactly a bug, but in the new system there is no differentiation showing a borrower fully paying back except that 100% notation in the email.  The transaction detail uses the same identical repayment type and wording for all repayments that formerly was used for a full repayment.  If the email telling us that the borrower has fully repaid cannot be replicated in the new system, it would at least be very useful to code/show that final repayment differently in the transactions and exports. (One more way of losing the focus on the borrower.)

On an unrelated note, I continue to get "phantom" notices in my Some News for you, from team messages that are not on the team message board.  These come frequently enough that they push any notice of a journal right into cyberspace.  Since the space for the messages is limited, could there at least be a way to see previous messages that were there before being pushed down by these "phantoms".  (I have one right now from a Kiva friend if you need a specific example.)

Dan

[waywardcats]

Sorry to disappoint you, but Kerry referred - I think - to loan confirmation mails while you seem to ask for mails confirming the complete repayment of a loan.

Wolfgang.

Ah, yes sorry Sarah, I did mis-read your post.  I was in fact thinking of loan confirmation emails.

-Kerry-

[JohnR]

Thanks, Gerard, for all the explanations.  I still don't understand something though.  You said,

At the end of every month, Kiva requires that our Field Partners indicate whether or not they’ve collected these repayments from the entrepreneur. In recognition of the fact that it takes most of our Field Partners a fair amount of time to catch up with their activity for the month, they have a 15 day grace period after the end of the month to do so.

After this 15 day grace period, we generate a statement with this information and bill our partners for all of the repayments that they indicate they’ve collected. Our Field Partners then have an additional 30 days to make a payment to Kiva so that we can deposit the repayments into your Kiva account. The repayment due date reflects the last day the Field Partner can pay before the repayment becomes delinquent.
For example, if a Field Partner posts a loan with the first repayment on January 10th, we ask them to indicate whether or not they’ve received this repayment by January 31st.

On Feburary 15th, at the end of the grace period, we generate a bill to the Field Partner for all of these repayments. The Field Partner then has until March 15th to pay this bill before we mark the payment on Kiva as delinquent.

.

You've stressed that one advantage of PA2 is the FP can specify the payment term, so we should be able to assume the payment schedule they come up with is realistic.  In your example, the FP said the first payment would be due Jan 10, then shouldn't we expect to get that repayment w/i the next week to ten days?  Why wait three weeks to confirm the FP in fact rec'd the payment?  Why then wait until Feb 15 to bill them for a payment they said was due Jan 10 and which they confirmed Jan 31 that they have in hand?  Finally, why give them another month to remit the payment?  This seems like a lot of float time for the FP.  In other words, the loan that the FP set up to be due on Jan 10 doesn't have to be paid to Kiva until Mar 15, two months later, even though they have the money in hand six weeks prior.

From your explanation, I understand that Kiva wants to bill everyone on the 15th for ease of use.  I accept that.  But if the payment is due on Jan 10, why isn't it billed on Jan 15?  And why does the FP get another thirty days to send the money to Kiva, when it's already been established that they have the cash?  Wouldn't ten days, or two weeks be a reasonable amount of time for the FP to remit?  So in your example, payment is due Jan 10, Kiva bills Jan 15, the FP has until Jan 29 to remit.

Though I have good wishes for the FPs, I don't support giving them so much float.  I'd prefer the funds got back to me so that I could re-loan them and another entrepreneur could use them.  Or have I misunderstood the way it works?

[TropicalPete]

I think one point a few lenders have missed is that FP needs time to physically process whether a loan payment was made on a given day during each month. The FP may set a due date for a specific loan on Jan 10 (for example) but they don't process that repayment until Feb 1st. The FP does not have the staff to communicate repayment information on a daily basis. Also, remember that a lot of the accounting and payment transaction information is probably done throughout the month on paper. Then at the end of the month recorded in a computer and sent to Kiva.

[AccountAbility]

Kiva now has a blog post from Gerard that concisely explains most of what he described in this thread about the new repayment system.  It is a well done write-up that hopefully will stay where lenders can find it.

http://www.kiva.org/about/inside

In the interest of clarity, I really think the term "due date" should be replaced with some other term when Kiva is talking about the end of the grace period for the repayment.  In common financial terminology, the due date is the due date and the end of the grace period is something else. (Refer to typical insurance premium notices for examples of better terminology.)

Dan

[Gerard]

You've stressed that one advantage of PA2 is the FP can specify the payment term, so we should be able to assume the payment schedule they come up with is realistic.  In your example, the FP said the first payment would be due Jan 10, then shouldn't we expect to get that repayment w/i the next week to ten days?  Why wait three weeks to confirm the FP in fact rec'd the payment?  Why then wait until Feb 15 to bill them for a payment they said was due Jan 10 and which they confirmed Jan 31 that they have in hand?  Finally, why give them another month to remit the payment?  This seems like a lot of float time for the FP.  In other words, the loan that the FP set up to be due on Jan 10 doesn't have to be paid to Kiva until Mar 15, two months later, even though they have the money in hand six weeks prior.

From your explanation, I understand that Kiva wants to bill everyone on the 15th for ease of use.  I accept that.  But if the payment is due on Jan 10, why isn't it billed on Jan 15?  And why does the FP get another thirty days to send the money to Kiva, when it's already been established that they have the cash?  Wouldn't ten days, or two weeks be a reasonable amount of time for the FP to remit?  So in your example, payment is due Jan 10, Kiva bills Jan 15, the FP has until Jan 29 to remit.

A root problem here is that it takes a much longer amount of time for an MFI in Tanzania, for example where they work entirely in paper than your Citibank or something comparable which could tell you at any given time what their books look like.

So in this example, where the payment is collected by the MFI on January 10th, we say to the MFI, you have until the end of January to let us know whether you've collected this repayment and then give them an extra 15 days on top of that to get their books together and give us an accurate report. It may seem generous, but in reality it can be an uphill battle for the MFI to do this kind of reporting for Kiva, especially when it doesn't match up with their ordinary business practices.

After the bill is issued, in this example on February 15th, we give them 30 days to send funds. If they don't net positive based on the fundraising they've done on their website, they'll have to wire us funds. This is a costly and sometimes difficult process, so 30 days probably isn't too much time to give.

Working with orgs in the developing world presents its own set of challenges and so the billing cycle is designed to reflect those challenges and build them in so as to give a better sense of when a loan is delinquent and when it's paying on time. After a payment is made, we'll reveal that on the website and show you when the payment was marked as collected by the Field Partner.

[RichardF]

In the interest of clarity, I really think the term "due date" should be replaced with some other term when Kiva is talking about the end of the grace period for the repayment.  In common financial terminology, the due date is the due date and the end of the grace period is something else. (Refer to typical insurance premium notices for examples of better terminology.)

Dan

Exactly.  I was waiting for you to bring that up.  What they're really posting is the "past due date, "late date" or "arrears date."

Delinquency
the situation that occurs when loan payments are past due. A delinquent loan (or loan in arrears) is a loan on which payments are past due. Delinquency is also referred to as arrears or late payments.

[Gerard]

Kiva now has a blog post from Gerard that concisely explains most of what he described in this thread about the new repayment system.  It is a well done write-up that hopefully will stay where lenders can find it.

http://www.kiva.org/about/inside

In the interest of clarity, I really think the term "due date" should be replaced with some other term when Kiva is talking about the end of the grace period for the repayment.  In common financial terminology, the due date is the due date and the end of the grace period is something else. (Refer to typical insurance premium notices for examples of better terminology.)

Hi Dan - The due date is in fact that - the last day that a repayment can be accepted and, after that it's delinquent.

So for a payment that is set to be collected by the MFI on 1/11 the end of the grace period would be 2/15 (end of the month plus 15 days) and the due date would be 3/15 (the end of the grace period plus 30 days).

We'll have to find a good home for that blog post on the website where all lenders can access it.

Thanks!
-Gerard