New Website System of Showing Loan Repayment Terms

[Guest]

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[AccountAbility]

The thread "Concerns over Repayment of Loans" now seems to have both the topic of the borrowers'/MFI's delinquencies as well as the topic of Kiva's new roll-out of displaying the complex repayment arrangements as they flow from the borrower to the MFI Field Partner to Kiva to the Lenders.

Since these really are quite different, and perhaps different lenders will have differing interests in these two topics, I think we should have a new thread for Kiva's new system of display.

I think it is a big step in the right direction. I have avoided comments as I digested what the new system appears to be displaying.  Again, I think one of the biggest confusions is the lack of tight terminology to clearly differentiate the separate steps.

As has been mentioned, the Lender's portfolio view still uses "Loan Term" and has the original length that had been displayed on the borrower's page.  The Borrower's page now is using "Repayment Term" and now appears to be about 3 months longer than what was posted before.

If the true loan is between the borrower and the MFI Field Partner, then I think all of the terms which reflect these transactions should be normal loan terminology.  On the other hand, all of the words expressing "back office" transactions, whether they are between the MFI Field Partner and Kiva or between Kiva and its "Lenders", should use other terminology, such as re-credit, posting, duration or some such.  Surely Kiva can get some of their volunteer financial consultants to come up with more precise wording to be applied consistently across the board on their website.

There are a number of excellent posts on the other thread which I will refer to here:

http://www.kivafriends.org/index.php/topic,321.0.html

for those who want to see what has already been expressed on this topic.

Dan

[cjp1973]

I was wondering if someone with a little more knowledge on this subject, could tell me why this loan is marked delinquent when there was no payment expected and an payment came.  I received $1.56 for this loan in March.  Thanks in advance.

http://www.kiva.org/app.php?page=businesses&showRepaymentDetails=yes&id=91572&action=about#payments

[wthepoo]

I was wondering if someone with a little more knowledge on this subject, could tell me why this loan is marked delinquent when there was no payment expected and an payment came.  I received $1.56 for this loan in March.  Thanks in advance.

http://www.kiva.org/app.php?page=businesses&showRepaymentDetails=yes&id=91572&action=about#payments

Hi Charmaine,

that's a bug Kiva is aware of and working to fix. Unexpected payments in months were the expected payment is $0.00 are added to the end of the schedule and accidentally marked "delinquent". The loan itself is not "delinquent", though, as you can see from the status in the top right hand corner (Active).

Best wishes,
Wolfgang.

[AccountAbility]

The anomaly of the delinquency mark apparently applies when first repayments in the expected repayment schedule are not received (perhaps because the expected repayment schedule incorrectly started the repayments too soon).

It then places the delinquent payment at the bottom also.

http://www.kiva.org/app.php?page=businesses&action=about&id=45431#payments

But if the first payment was not received as expected, then all subsequent payments would be one month late (which the system somehow avoids posting as delinquent.)

Probably part of the same bug as already mentioned.

Dan

[wthepoo]

Sorry, Dan,
I fail to get your point, here.

In the loan you posted: http://www.kiva.org/app.php?page=businesses&showRepaymentDetails=yes&id=45431 - there has been an early (compared to the PA-2 repayment schedule) first and not a missed first repayment.

According to the schedule (that is based on a wrongly shifted disbursal date - but that's a different "bug"), the first repayment from the borrower was expected on June 8, 2008 and then on the 8th of each month until September 8, 2009. But the first repayment already took place on May 28, 2009 - so the system added this "unexpected" payment to the end of the schedule and - falsely - marked it as delinquent. That's just the bug I mentioned in my previous post.

Btw, the loan fell back to the new schedule when the borrower made no repayment during October 2008 so it's now performing in accordance with the schedule.

Best wishes,
Wolfgang.

[AccountAbility]

You are right.  I must have been looking at another situation when I got it in my head that something was wrong.   

So for now I will assume that nothing else is wrong with the delinquency flag (other than the bug you posted) until and unless I find that situation again. 

Dan

[AccountAbility]

Gerard Posted on March 31

We're going to be pushing a new version of the website tonight or tomorrow. This version's going to have some changes to the repayment schedules that will hopefully address some of the concerns we've see on this thread:

On the entrepreneur business profile pages:
-   Fixed the discrepancies in loan terms vs. the actual number of months
-   New field showing whether lenders are repaid Monthly, End of Term or Other
-   Added new schedule to the bottom that tracks expected vs actual repayments
-   Included an Advanced view that shows the schedule on which entrepreneurs make repayments to the MFIs
-   Exposed Delinquency in the top of this page for delinquent loans

In "My Portfolio" > "My Loans"
-   Added a marker of Delinquency under the Status column
-   Allow loans to be sorted by the Status column, thus allowing Delinquent loans to fall to the top/bottom of a list

Roma's going to post to our blog about this soon, which should have some screenshots.  [which she did]

************************************************************

Changes noted in the way Kiva is showing loan details:

1.  New concept called "Repayment Term" seems to calculate from the original date of disbursal to the borrower until the date the Kiva lender is re-credited with funds (including the 30 day grace period Kiva grants before listing it as delinquent.
This new term is typically 2-3 months longer than the former "Loan Term" listed on the Borrower's page.

2. The original "Loan Term" that used to be on the borrower's page is still listed on the lenders portfolio listing.

3. The "Posted" date refers to the date the MFI Field Partner first uploaded the loan to Kiva, not when the loan first appears on the Site.

4. Each repayment is labeled by month, which is the last month the Lender can be re-credited with the payment before it becomes delinquent (e.g. at the end of the 30 day grace period), and not when the borrower is repaying.

5. The system doesn't seem to take into consideration non-standard loan terms such as irregular payments, delayed start of repayments and balloons at the end of the loan.

Dan

[wthepoo]

Thanks, Dan.

That is an impressive summary of the most important changes and should answer many questions.

...
5. The system doesn't seem to take into consideration non-standard loan terms such as irregular payments, delayed start of repayments and balloons at the end of the loan.

Dan

This IMHO only applies to loans posted before the PA-2 transition last fall. With the newer loans, the system should basically do fine.

Best wishes,
Wolfgang.

[TheTatiana]

I'm very pleased with it.  It seems to fix the problems it addresses. 

[AccountAbility]

I agree that it is a significant improvement in terms of providing sufficient data for a lender (with a mind to) to find out what is likely to happen and is in fact happening as a loan progresses.

It does seem to continue an unfortunate (IMHO) trend toward focusing on the question,
"when will I as lender see my money coming back?"

and less on the fundamental question of,

"How and when is the borrower making repayments on his/her loan "on the ground?" (to borrow a phrase thrown around a lot)

The categorization of a "repayment" actually made by the borrower in February as "April" is but one example.

Dan