USA loans

[Guest]

.

[YowieFreak]

When you say "them", do you mean TCU or NAB?  I would hesitate making NAB a Field Partner, since they are a publicly traded company with deep pockets of their own.

By "them", I meant NAB.  And I wasn't really thinking of the NAB/TCU arrangement (where NAB is just making an interest-free loan to TCU so that TCU can open bank branches) but more about the NAB/IBA partnership which is providing loans to individuals / businesses and providing training, and the NAB/NILS arrangement.

And, in defence of NAB, although it has deep pockets it also has shareholders, and most shareholders don't appreciate the companies they own just giving Nil-Interest Loans when they could just as easily give Non-Nil-Interest Loans and make a profit (or, at least, less of a loss on the loan), so NAB can't give away too much of their profits in this way.

[YowieFreak]

P.S.  Here's a better web-page re all of NAB's microenterprise loans, not just the ones for indigenous Australians.  (Urgh!!  I hate using that adjective - it makes it sound like some Australians aren't normal Australians; that they aren't quite good enough to be classed as "true" Aussies.)

And, for comparison purposes (to the 5.99% interest rate on those loans), NAB currently offers a 3 year term deposit providing 6.8%p.a. interest (paid monthly) - so they are paying people more to obtain the capital to provide these loans than they are getting back.  (That probably means Kiva can't partner with them - because it's not a "sustainable" business.  )

[maiforpeace]

Opportunity Fund, based in San Jose, CA USA lends to undocumented workers.  This means that illegal aliens who have settled here actually have an alternative to working under the table and being exploited by unscrupulous employers.

To do that requires that the undocumented worker gets an ITN number.  This number is given to undocumented workers to begin paying income taxes.  Doing this begins the long process to become a legal resident and ultimately citizenship. Knowing they could qualify for a loan if they start this process is a great incentive to for illegal immigrants to get legalized.

From my perspective, as an American I think this is an invaluable service.  I see nothing wrong with using Kiva as a conduit for supporting an MFI that clearly is helping the disadvantaged, in this particular case, non-Americans in my community.  For those folks from other countries, I do understand that you wouldn't be interested in making loans to Americans, but you do realize that some of those people applying for loans may not be Americans? I would venture to guess that could be a reason why they didn't qualify for a loan from a regular US bank. 

[Kathy]

Do you think people from Uk, Germany, Australia, Sweden, Norway, Denmark etc should also get loans on Kiva ?
Even if this takes about half the the amount available on Kiva, so that more loans to devloping countries went unfunded ?
Isnt there a great difference between the rich countries with a working financial system and developing countries?

"I'd love to see every country on Kiva if they've a need." Quote from Kathy on November 27, 2009, 07:31:27PM


And again, Kiva doesn't tell me who to loan to. Kiva merely shows faces for possible entrepreneurs and I can pick the ones I choose to fund with my hard-earned money. Besides, even though I don't fund US loans I do believe that a US funded entrepreneur has more means to get more people involved with Kiva than a farmer in Togo.

Meaning?

I believe a US funded entrepreneur who is successful will:
a) give money back to Kiva via donations and/or lending,
b) family members seeing the support from Kiva will get involved with Kiva via donations and/or lending,
c) suppliers working with the entrepeneur will donate and/or loan to Kiva, plus maybe even funnel more entrepreneurs through Kiva, and
d) customers benfitting from the Kiva entrepreneur will want o get involved through donations and/or loans.

More people will benefit from 1 $10,000 US loan than from a single loan to Africa. Yet, I still do straight donations to Africa while I support US loans. I'd fully support Kiva being in every country even though I pretty much loan to Africa/Asia.

Like Jan said:

"I see no difference between a mother in Canada or a mother in Kenya who have no milk to give their children.  Both of them have an annual income lower than mine.

I cannot help all.
I try to help the ones I feel called to help.

and the best part of Kiva, is the repayments and the opportunity to relend and stretch my own $$$."

[wthepoo]

As I stated before, there is a long waiting period for any data to enter the Contractors State License Board and they have a system set up that immediately registers their paperwork as being 'received' when it arrives while it is awaiting processing.  There was no paperwork in the 'pile' awaiting data entry as of the end of the work day on the 13th of October.

Just a quick update - the business in question is fully licensed, again, (don't know since when) and is listed as having worker's comp insurance since October 15, 2009 after going about six weeks without (my guess still is that it was a financial issue).

This - of course - doesn't make the apparent indifference on the Field Partner's and also on Kiva's part much better.

Best wishes,
Wolfgang.

[alan]

Accion USA has a delinquency rate of 3.66%, default rate of 5.81%, is losing money at a rate of 27% and gets 4 stars? 

[Sengbe Pieh]

ACCION's Default Rate was raised in the February, 2010 Conference Call after several lenders received the following (or a similar**) update:

Subject: Update from ACCION USA
Location: New York, New York, United States

    Dear Kiva Lender,

    First off, let us say that we are profoundly grateful to our Kiva lenders whose involvement brings a valued resource to ACCION USA. We began our partnership with Kiva.org last June and since then Kiva lenders have funded over 70 ACCION USA loans

    We are writing to update you about the ACCION USA client, Carlos to which you lent. Carlos has unfortunately been unable to make a payment on his microloan—we apologize for the delay in providing an update. At ACCION USA, we do not consider a loan as defaulting until 180 days have passed. To be fair, we want to follow our normal protocol for collecting late payments before updating you, his lenders. Unfortunately, after many attempts, we have been unable to bring Carlos up-to-date on his loan.

    ACCION USA boasts a historical repayment rate of nearly 90%, thanks to 40 years of microlending experience and a diligent loan underwriting process. However, there are always circumstances beyond our control that can affect repayment such as the overall tough economic environment, health, and family emergencies. The recession has been especially difficult for microentrepreneurs, and ACCION USA’s financial education and lending consultants are committed to working with our borrowers to ensure success. Through one-on-one consults, group classes, and online resources, we’re doing everything we can to support our borrowers—it’s in our mission.

    Thank you, Kiva lender, for supporting ACCION USA. We are extremely grateful to those who have chosen to help the under banked in the United States. By lending to an ACCION USA entrepreneur, you believe in the power of strong local business to help us get through these tough times. As a Kiva lender, you are helping to cultivate a strong foundation for the times ahead.

    We look forward to your continued support—we will do our best to keep our Kiva lenders updated about our borrowers successes and their challenges.

    Warmly,

    ACCION USA


Posted by Erica Dorn from New York, New York, United States
Feb 4, 2010
http://www.kiva.org/lend/128740

(Since Carlos has only made one repayment on his loan & is currently 6 payments in arrears, I think it is probable that his loan will eventually be declared defaulted.)

The issue is that ACCION was added as a Kiva Field Partner without full disclosure of its slightly greater than 10% historical default rate. As a new Kiva FP, all of its parameters started at 0.00%; a deceptive clean bill of health. Kiva's staff admitted that ACCION's information could have been "handled better".


** DEFAULTED LOAN
Subject: An Update From ACCION USA
Location: Location Undisclosed, United States

    Dear Kiva Lender,

    First off, let us say that we are profoundly grateful to our Kiva lenders whose involvement brings a valued resource to ACCION USA. We began our partnership with Kiva.org last June and since then Kiva lenders have funded over 70 ACCION USA loans

    We are writing to update you about the ACCION USA client, Aesop to which you lent. Aesop has unfortunately been unable to make a payment on his microloan—we apologize for the delay in providing an update. At ACCION USA, we do not consider a loan as defaulting until 180 days have passed. To be fair, we want to follow our normal protocol for collecting late payments before updating you, his lenders. Unfortunately, after many attempts, we have been unable to bring Aesop up-to-date on his loan.

    ACCION USA boasts a historical repayment rate of nearly 90%, thanks to 40 years of microlending experience and a diligent loan underwriting process. However, there are always circumstances beyond our control that can affect repayment such as the overall tough economic environment, health, and family emergencies. The recession has been especially difficult for microentrepreneurs, and ACCION USA’s financial education and lending consultants are committed to working with our borrowers to ensure success. Through one-on-one consults, group classes, and online resources, we’re doing everything we can to support our borrowers—it’s in our mission.

    Thank you, Kiva lender, for supporting ACCION USA. We are extremely grateful to those who have chosen to help the under banked in the United States. By lending to an ACCION USA entrepreneur, you believe in the power of strong local business to help us get through these tough times. As a Kiva lender, you are helping to cultivate a strong foundation for the times ahead.

    We look forward to your continued support—we will do our best to keep our Kiva lenders updated about our borrowers successes and their challenges.

    Warmly,

    ACCION USA


Posted by Erica Dorn from Location Undisclosed, United States
Feb 4, 2010
http://www.kiva.org/lend/114341
Defaulted April 12, 2010
http://www.kiva.org/lend?partner_id=131&status=Defaulted&sortBy=New+to+Old

[Skimmis]

http://www.kiva.org/partners/132
has only 3 stars , but no loss until now on Kiva ( ca 90% historical)
Wonder how Kiva give the stars

[Skimmis]

http://www.kiva.org/partners/131

Has 4 stars and the highest default rate on kiva website. Shouldnt some/3 stars be removed?

[waywardcats]

Interesting Kiva Fellows blog post from Meg Gray at Opportunity Fund

3 Different Countries, 3 Remarkably Similar Businesses

Since I started my third stint as a Kiva Fellow at Opportunity Fund, I’ve spent a lot of time thinking about the differences between microfinance in the USA (Opportunity Fund is located in the Bay Area) and microfinance in Central America (I previously worked in Nicaragua and Costa Rica). Then I met Monica, an Opportunity Fund client, and was immediately overwhelmed by how similar her business was to other businesses I saw while I was abroad.

Monica sells shoes at the Berryessa Flea Market in San Jose, California. She is using her loan to buy more merchandise so she can expand her business. Monica is proud of her business and is particularly happy that her business has enabled her to send money to her help support her parents and to pay for her sister’s education in Mexico.

Monica’s business is strikingly similar to José’s business in Masaya, Nicaragua. Besides the thousands of miles between them, the only major difference between their businesses is that José makes the shoes he sells. José is a client of Kiva’s partner CEPRODEL and he has been making shoes for over 30 years now. He used his loan to buy more raw materials, so he could increase the number of shoes he can sell. With his profits, José hopes to fix up his work area and his house, which in turn will improve the lives of his three children.

Or there is Irene, a 39-year-old mother of two in San Jose, Costa Rica. She has been selling shoes, cosmetics, underwear, and other items through catalogs for years now. Earlier this spring, she received a loan through Kiva’s field partner, Fundación Mujer, so she can expand her business into selling shoes as well. When I spoke to her, she carefully explained that shoes are one of her fastest selling items and expanding her shoe inventory should be incredibly profitable. She enjoys working for herself since it gives her the time and flexibility to take care of her children.

So yes, I still think that microfinance is very different in the United States. Factors like better infrastructure  and a more developed formal banking system create a very different landscape for microfinance institutions like  Opportunity Fund  to work within. Meeting Monica, however, was a refreshing reminder that while microfinance is very different in the US, microfinance clients and their businesses are often remarkably similar around the world. One of the most important similarities that I have seen is that entrepreneurs and small business owners around the world are generally working with the same overarching goal in mind: to improve the lives of their families.