DRAFT LIST of points to discuss with Liz at the KF Liaison phonecall on Thurs. 5 March 2009. Please comment or expand or add as appropriate. I'll be away on Tuesday but will plan to check in for any updates Tues. night in preparation for sending the email to Liz on Wed.
--Diane.
Items to discuss / address at the weekly Kiva/KF Liaison call, 5 March 2009.
[1] A concern has surfaced regarding the fact that actual loan payments from borrowers to their MFIs may not be on the monthly schedule assumed by Kiva’s software, and hence are inaccurately reported (and not transparent). Discussion of the issue can be found in the thread “
What would a completely transparent Kiva lending model look like?”
In particular, note the post about Loan Payment Schedules and Reporting which says:
When distinct loan payment schedules are known to Kiva, they should be reported on the Field Partner page and the specific loan listing page. For now, Kiva is set up to report payments on a monthly basis, regardless of the schedule (shorter or longer). Shorter, e.g., weekly payment schedules are not as problematic for transparency as longer, e.g., end of loan payment schedules.
For starters, Kiva needs to update its accounting software to reflect the actual payment schedule that applies for any given loan. For example, when a payment is not due, the loan should not be marked as delinquent simply because the software assumes monthly payments.
An easy way to characterize this issue in few words would be “Daily settlement, but Monthly billing”. When can we expect actual loan payments to be reported accurately on the loan pages?
(more links will be provided in the email to Liz)
[2] There have been repeated discussions about the actual interest rates paid to field partners by borrowers, and how those compare with the reported interest rates for those MFIs. In particular this thread (
Estimating entrepreneur interest rates from repayment term details) has a discussion on that topic, including a quote by Matt Flannery from the Nov. 26th “MattChat” seeming to support the approach of MFTransparency:
[RichardF] 8:20 pm: What about MFTransparency and Kiva Field Partners reporting to meet their goal of global transparency?
[flann] 8:20 pm: Chuck Waterfield is our colleague
[flann] 8:21 pm: He is the founder of MFTransparency
[flann] 8:21 pm: We support his efforts here
A good example of the mismatch between reported and actual interest rates can be examined
here. Could someone comment on whether, and when, the interest rates paid by individual borrowers will reflect their situations and not a misleading MFI average?
(more links will be provided in the email to Liz)
[3] We’ve seen that in almost all cases, it is not an individual borrower who defaults, but that failures or defaults rather come as a result of MFI problems. We’ve seen they are the weak link in the chain. Of the MFIs who aren't paying any money back right now (EbF, and several others), should we expect defaults from them as well? And if so, what would the total default percent be? Some lenders are mentally writing them all off already in their portfolios since nothing good has ever come in the past once and MFI stopped paying for a while. There’s a general desire to hear all the bad news now, rather than waiting to find out in slow small bits. What can you say to lenders who have lost confidence in Kiva’s set of MFIs? What would you tell lenders to help them feel better about the situation?
[4] The 2008 KivaFriends Calendar featured photos of entrepreneurs around the world and was very popular as a fundraiser. KF had intended to produce a similar calendar for 2009 but we were told that would not be allowed, since Kiva did not have photos they could permit us to use and did not have photo releases from entrepreneurs (so we scrambled last-minute and came up with the Kiva Quilt calendar for 2009). We were told at the time that the KivaFellows classes would be taking more “official” photos which we could use and getting releases signed, but we heard nothing more after that.
How did KivaFellows Class 6 (KF6) fare with the photos and releases? How many photos did they get and how can we share them? Is there anything the following group of Fellows, KF7, are doing to improve? In other words, what are the prospects for a Kiva Calendar 2010 which can incorporate borrower images?
[5] An older suggestion re-appeared and may have merit. Could this go on the engineering list?
I'd like to see the Kiva shopping cart give you a choice whether or not to apply Kiva credit when you are making a donation. I donate 10% when I re-loan funds, and what I want to do is pay the full amount of that donation via PayPal. But the shopping cart requires that I use my Kiva credit balance to pay.
For example, today I had a balance of $105.13, I re-loaned $100 and wanted to donate $10. But since I can only lend in $25 increments, there was a balance of $5.13 in my account. Since the cart forces me to use that credit balance, what happens to my intended $10 donation is that I can only pay $4.87 of it using PayPal, while $5.13 of it is deducted from funds I really wanted to keep in my account to re-lend.
The end result is that Kiva gets less money in new donations, and the pool of available loan funds also gets reduced.
The only workaround I could figure is to then initiate a separate transaction to add the $5.13 back into my account as future credit, which I did. Unfortunately, the add credit option doesn't allow you to simply add it to your cart; it takes you straight to PayPal. So I had to do this in 2 separate transactions, which of course costs Kiva more money.
It seems like making "apply Kiva credit" an option instead of automatic would be an easy fix to make that could quickly increase the amount of new funds being donated by repeat lenders.
And finally, questions about possible changes to MFI quotas.
[6] Is it possible to get more information about the quotas Kiva applies with its field partners? Is each MFI given a fixed quota of dollars which can be raised in each month? Does the quota go up after the MFI leaves pilot status, or after a year with a low delinquency rate, or under some other condition? We understand that Kiva financing of loans cannot exceed 30% of the MFI’s total loan fundraising; is there an annual verification of this, and an adjustment of loan volumes if appropriate? We’ve also noted that individual loans have started appearing with higher “pricetags” (as high as $5,000!) could someone comment on this change and any related changes we’ll be seeing?
(thanks everyone!)
--Diane.
