USA loans

[Guest]

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[DoubleR]

What are Kiva's current projections for US loan growth (and non-US loan growth, for that matter) based on the current lending base, and how do they plan to grow this lender base to accomodate the influx of new loans without sacrificing oversight (rating and monitoring MFI's, etc.) to safeguard the lenders' investments?

What percentage of US loans is acceptable that we can still say our mission is to alleviate poverty in the world and not become just another alternative marketplace for lending?  

These are excellent questions to raise on the community conference call this coming Wednesday.  I hope someone will remember to take note of these.

Regards,
Ronan

[DoubleR]

We know each FP has some magical upper limit on the amount of loans it can post each month.  We know each FP places listings in a queue, waiting for the perfect moment to be released by the Kiva loan spitter outer.  From the recent addition of currency risk info to listings, we also have hints that some loans seem to sit around in the queue longer than others. 

What all this suggests to me is that the Kiva FP loan posting rules are not a simple, one-dimensional quota system.  Instead, it looks like a maximum cap is out there plus some staging rules that determine when specific loans are let out of the chute.  For example, if one rule has something to do with how many or the value of listings that can be “fundraising” at any give time, then the longer it takes to fund the typical loan, the more likely it will be that an FP does not hit its monthly listing quota.

I don’t know if slowly funded loans actually do cause an FP to fall short of its maximum fundraising possibility.  But I do know something keeps listings in the queue.  As usual, Kiva is not forthcoming with lenders on what actually controls how loans get posted from the queue, so all we can do is reverse engineer and speculate from what we observe.  At any rate, I hope this offers a counter-counterpoint for anyone who wants to believe their actions do have consequences.  (Uh-oh, I think I just slipped over to one of those esoteric topics.)

Richard,

I agree with you somewhat.

I do agree that there is a monthly "magical and mysterious" fundraising cap for each FP based on its status, risk rating, and who knows what other unknown criteria.  When that cap is reached (the exact figure is the "magical and mysterious" part), then new loans are held in queue until the 1st of the following month.  I'm not sure if there are other "staging" rules that come into play, as you suggest. 

I recently became a volunteer translator and loans have to go through a translation and/or editing process.  This may be the delay causing the speculation.  Loans that are not in English sit in a queue waiting to be assigned to a translator.  The loans are date/time stamped.  We do not get to cherry pick which loans to work.  When we are ready to translate a loan, the system automatically assigns us the oldest loan in the queue for our particular language.  Once we have completed the translation, then the loan appears on the site in a matter of minutes unless the fundraising cap has been reached.  If we detect problems with a loan (missing photo, inconsistent information, etc.), then those are reported and held over for the translation coordinators to review.

I believe the loans that are already in English go through the Editing Team to review for readability (someone on the Editing Team would need to confirm this). 

Having done this for a few weeks now, I have a greater appreciation for the translation/editing teams.  They are under the gun when demand is high and there are not enough loans posted on the site.  Now the pendulum could possibly swing the other way and lenders may start asking us to slow down.  You have to remember that the FPs are responsible for filling our queues, so we have to translate at a steady pace so that we don't get behind.  The translation system lets us know how many loans are in the queue for a specific language, so if several FPs post new loans at a given moment, then we know when there's a spike in the number of outstanding loans waiting to be translated.

I hope this provides a bit more insight.

Regards,
Ronan

[RichardF]

Ronan, yes, I understand lots of processing takes place after a listing gets uploaded before it gets marked as "ready" to post.  It also turns out loans often get posted in clusters from an FP, so it still at least has the appearance of some sort of gatekeeper standing at the door to the Lend page besides individual listings just walking up and going straight in.  Kiva could always just tell us how it does it (and what "Popularity" means for that matter) but it doesn't.  That's why KF is such a lively place for "How Did They Do That?" games.


Marilee, I also certainly agree might does not make right.  And a fundamental responsibility of a democracy is to protect the rights of the minority.

For me, the greatest weakness of the "If you don't like them, don't loan to them." position is that Kiva is a donor-funded operation. That means it's not a simple pick-and-go marketplace.  Donors reasonably should have a say in the total operation of the enterprise, not just the sections where they do their shopping.

The bottom line on this USA loans issue for me is exactly how does Kiva define "poverty."  If it's about countries, then the U.S. obviously needs to be off the list.  If it's about people, then those of us who live in the U.S. know plenty of our brothers and sisters qualify.  If it's about limited access to traditional banking markets (which I believe is Kiva's position here), then including any country makes sense. 

Once again, we're mostly left to speculate what Kiva's true basis for its position is on the matter.  If we're talking about how listings get out of the queue, then its quite a trivial matter whether we know the inner workings or not.  When we're talking about the core values of the organization that drive its mission and business practices, that's quite another matter. 

I hope Kiva comes out soon with much clearer statements on what it means by "poverty" and "microfinance."  At that point, a much more fundamental imperative can be claimed by the lending majority, "If you don't like them (Kiva's values), don't loan through it."

[tomviolence]

For me, the greatest weakness of the "If you don't like them, don't loan to them." position is that Kiva is a donor-funded operation. That means it's not a simple pick-and-go marketplace.  Donors reasonably should have a say in the total operation of the enterprise, not just the sections where they do their shopping.

Everybody who made a loan with no donation, or even has donated a nickel, really can't have a say in running Kiva.

People who have made significant investments in portfolios, with or with out accompanying donations, should certainly be listened to, but not necessarily have a say (say in the meaning of vote or directly change policy).

Purex is big, so they tell Kiva what to do, and have Kiva acquiesces ? (And if they have - is that a GOOD thing ?)

I would not be posting here if I thought there was no chance of getting things changed. There are certainly differing veiw points on what needs to be changed. Equal say would not work (Democracy is not always the right model), and special interests should not have "pay for play" access. That leaves Kiva to be responsible for it's own destiny. Hopefully, with the help of commited people like Kiva freinds providing feedback.

[RichardF]

Everybody who made a loan with no donation, or even has donated a nickel, really can't have a say in running Kiva.

Obviously, we're not "shareholders" who actually have a "vote" in what happens.  But of course, by that logic, the dismissive, "If you don't like them, don't loan to them." argument doesn't hold either, which is the real point.

[RichardF]

In the current system, the final result is, whatever Kiva lists, we will fund, up to the maximum the lender base can afford.  Through lending caps, they decide what aggregate volume of lender money goes to what MFI.

Hi Marilee, I second your comments with a resounding maybe!!! 

By the way, I forgot to mention what probably is the most telling indication that slow-fundraising loans have an impact on a Field Partner's total Kiva portfolio.

Who knows how many times we've discussed the feast-or-famine roller coaster for the number of listings on the Lend page?  In the not-too-distant past, Kiva would have no more than a relatively low number (compared to now) of listing on the site at any one time - 200, 400, 800, 1000 or whatever.  Near the end of the month, the number of listings would drop, sometimes even totally running out.  During that phase of the month, the "old" listings would start to fund and no men with cows were left behind.  At the beginning of the of the next month, the "popular" loans would show up again, as long as the total Lend page cap had room for a few more listings.

As folks like Accountability Dan and others would point out, a loan never listed because of the "Total Lend Page Cap" was guaranteed to not get funded by Kiva lenders.  If an FP never got the opportunity to list all its maximum allotted loans because it couldn't fit in its allotted share of the 400 or whatever listings at any one time over the course of the month, then it couldn't maximize its Kiva portfolio.  With a new month starts a new monthly quota.

So, if we're now to the point where the Lend page doesn't drop down to basically zero listings by the end of the month, then we can be pretty sure that slow fundraising listings cause FPs to lose out on potential Kiva funding, even if we never see any particular listing go "unfunded" on the site.
 

[waywardcats]

Yes, you are correct that there are only 2 US loans vs. 1001 non-US loans.   But do you really believe that Kiva would launch such a large national campaign with TV coverage on all the major networks to only help 2 (now about 40 for the month) Americans?  It is obvious that for this campaign to be truly successful, one would expect that the number of US loans would increase exponentially in the future.

We are already experiencing problems funding the additional influx of loans this month.  And before you ask.... no, I don't believe the small number of US loans are to blame this month.  However, when you consider the average US loan is around $5000 vs. $400 for other loans and the fact that older loans (all non-US) will expire, a future ramp-up of US loans is going to tip the ratio of US loans to non-US loans exponentially.

Hi Marilyn,

An excellent post with many good questions.  I did want to address this point however.  I do NOT expect Kiva to increase US loans exponentially at all.  The dollar amounts offered for loans in the US will probably increase, but I doubt they will go up by more than a small percentage (10 to 20% is my guess) over the next few months.  I see no sign that Kiva is imminently planning to add a new Field Partner(s) in the US. 

Of course, I could be wrong, but it is my impression that the ramp up in loans that happened this month were due to two factors:

• 1. US launch would bring media attention and new lenders
  
  
• 2. Recent "loan droughts" combined with continued growth had Kiva step up efforts to add new FPs and new MFIs in existing countries and this work  came to fruition just in time for the US launch.

This second reason was a direct reaction to pressure from Kiva lenders, many of them right here.  I myself asked questions on the conference calls this spring about loan supplies and heard for example this answer from the February conference call.

Q:  The cycle of loans/repayments happening on the 1st/15th is not working very well.
A:  Premal:  There is internally lots of discussion at Kiva about this "lumpy" funding pattern throughout the month, different people have different perspectives.
1: Some think it makes more sense for it to be smooth and settled on a real-time basis.
2: Some think Kiva should aspire to work with more and more field partners throughout the world, as now they're running out of loan profiles and the Internet community appetite to fund loans is outpacing what they're able to get on the site.  So, does Kiva attack the core problem and find/vet/train more MFIs to bring them on board faster?  Or do they change something in the billing cycle?  They are still working both questions.

Q:  Any new countries coming along in the pipeline soon?
A:  Kiva is targeting some larger MFIs that will be better able to weather some of the financial stress of the current climate, and considering going deeper in existing countries.  They are looking at India (but some regulatory issues still exist there), Argentina, and perhaps South Africa as new partner countries in 2009.

I agree that the launch of the US lending was a great opportunity for a media push, however, I do not think that push means that there will be a huge influx of loans to US borrowers.  Otherwise, Kiva would not have worked so hard to increase the supply of loans to other countries if they could focus on US loans.  Unless Kiva plans to grow exponentially itself over the coming years, with no plateau in sight then in my opinion a huge increase in loans within the US would not make sense for Kiva.

What are Kiva's current projections for US loan growth (and non-US loan growth, for that matter) based on the current lending base, and how do they plan to grow this lender base to accomodate the influx of new loans without sacrificing oversight (rating and monitoring MFI's, etc.) to safeguard the lenders' investments?

What percentage of US loans is acceptable that we can still say our mission is to alleviate poverty in the world and not become just another alternative marketplace for lending?  

Marilyn

I agree that these are great questions and I hope that you (or someone here) ask them on the conference call or through our Kiva Friends Liaison because the answers i think will be very interesting.

-Kerry-

 edited to correct month of conference call.

[DoubleR]

Ronan, yes, I understand lots of processing takes place after a listing gets uploaded before it gets marked as "ready" to post.  It also turns out loans often get posted in clusters from an FP, so it still at least has the appearance of some sort of gatekeeper standing at the door to the Lend page besides individual listings just walking up and going straight in.  Kiva could always just tell us how it does it (and what "Popularity" means for that matter) but it doesn't.  That's why KF is such a lively place for "How Did They Do That?" games.

Richard,

You crack me up.  If Kiva did reveal all of their secrets, wouldn't that take the fun out of some of the KF discussions?

Regards,
Ronan

[RichardF]

Richard,

You crack me up.  If Kiva did reveal all of their secrets, wouldn't that take the fun out of some of the KF discussions?

Regards,
Ronan

Probably not, because then we would have to make up even more things to pick apart!   

[RichardF]

I would welcome more transparency.

Oh, and that too!