Late Loaning Lenders FAQ

[Guest]

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[alan]

The Late Loaning Lenders (LLL) team was founded in July, 2009, as a result of concern about the appearance of a growing number of loans that were in danger of expiry. Prior to that time, only two loans had expired in the history of Kiva, though these two expiries of loans were anomalous and not indicative of a trend at the time. This record was maintained until September 30th, 2009 when the best efforts of the LLL team were overcome by loan expiries for the first time. The goal of the team is to help loans in danger of expiry to get funded. The tactic is threefold: to build awareness of the problem of expiring loans, to support such loans by lending to them, and to help them appear on the first page of the list of loans as sorted by popularity by concentrating our lending efforts. The basic theory is that loans that are not noticed are unlikely to attract funding, and thus loans that are noticed will be funded. Loans are most visible to Kiva lenders when they appear on page 1 of the list. The LLL team is a non-competitive, open team. Topics are arranged below in 4 sections: 1 Expiring Loans 2 The LLL team and team membership 3 Loan Popularity 4 Basketing of loans This FAQ has been compiled by the LLL team captains: Alan, Brennan, Jennifer and Petra, and former captain Mona. We value your feedback! This thread is intended for the FAQ, and not for discussion. In order to keep it for that purpose we ask your cooperation in refraining from posting here. Please direct all comments, feedback and discussion to the LLL team thread or by PM to one of the team captains. Thank you for your understanding. To see a list of all loans in danger of expiry go to http://tinyurl.com/n7r5jw

(Edited per instructions from Alan, 2 May 2010)

[alan]

1 Expiring Loans

1.1 Why do loans expire?

Every loan request on Kiva is posted for a maximum of 30 days, which is defined as 720 hours from the exact time the loan is posted. If the loan is not fully funded by the end of that period, it expires.


1.2 When does a loan “turn red”?

When there are 4 days, 23 hours and 59 minutes left in the loan’s 720 hour fundraising period, it “turns red”. That is, an extra line is added to the loan’s description on the list, and to its loan page, indicating “4 days left”, and counting down the days remaining every 24 hours. In the last 24 hour period, this is replaced by a countdown of hours and minutes until it either gets funded or expires.


1.3 What does “x days left” mean?

“x days left” really means x full days plus some unspecified number of hours and minutes. Thus, for example, “1 day left” actually indicates that more than 24 hours (but less than 48) remain to fund a loan.


1.4 Why would a loan not get the funding it needs in 30 days?

A number of factors make some loans intrinsically more popular or more easy to fund. Small loans need less support than large loans, and thus can be funded more quickly. Many Kiva lenders prefer to lend to female entrepreneurs, some prefer to lend to individuals rather than groups, some prefer to avoid currency risk, and so on. In general, then, most loans that turn red tend to be larger than average, or loans to groups, or to men, or to women with currency risk. There are exceptions to this general trend. But the most significant factor in whether a loan gets funded within the first few days after it is posted or languishes until it turns red seems to be luck. If a loan appears on page 1 of the list, sorted by Popularity, for a long enough period, it tends to attract funding. And once it attracts funding, it will stay on page 1 longer, giving it a chance to attract more funding. But if a loan is swept off page 1, especially quickly after it is first posted, it must be discovered by someone and supported in order to climb back to page 1. The longer a loan does not attract funding, the less likely it is to get noticed, and the more likely it is to reach the point at which it is in danger of expiring. (See “3.1 What is Popularity?”)


1.5 What happens to money already lent when a loan expires? Is the loan partially funded?

When a loan expires, every lender who has supported it receives an e-mail notification and a refund. The Field Partner does not receive the funding it had expected for that loan. There is no mechanism on Kiva to provide partial funding for an expired loan.


1.6 When a loan expires, does that mean the borrower doesn’t get his or her (or their) funds?

Generally, no. Most loans are advanced (“Pre-disbursed”) by the field partner prior to being listed on Kiva. So the borrower already has the loan in hand and expiry will not affect the client. In cases where the loan has not been advanced prior to being listed on Kiva, the field partner may be able to fund the loan with other capital that it has on hand. Kiva limits field partners to funding 30% of their loan portfolio with Kiva funds.


1.7 If the borrower still gets the loan, then why is expiry a problem?

Although expiry of loans is not an immediate problem for the entrepreneur(s), we believe that it is a problem for the Field Partners, and hence for future entrepreneurs, and for Kiva.

Field Partners advance funds to entrepreneurs with the expectation that these loans will ultimately be financed by Kiva lenders. Before loans began expiring, this expectation was extremely certain, so the Field Partners could have great confidence that a loan request posted on Kiva would mean that funds would be provided by Kiva lenders to reimburse the amount they had advanced to the entrepreneur. But with expiry of loans comes uncertainty for the Field Partners, who now risk not being reimbursed for loans advanced. As with all risk in financial circles, this risk comes with a cost. For example, the Field Partner may have to fund the loan from another, non-Kiva, source of funds, which may involve higher interest charges. (Kiva provides funds interest-free, which is of obvious benefit to Field Partners.)

The cost is likely to be passed on to other entrepreneurs, who might not receive a loan because the funding for it is not in place, or who might have to pay a higher interest rate to compensate for the higher risk. Or the Field Partner might become less able to provide other, non-loan services. If the risk of expiry becomes significant, it might also make Field Partners more hesitant to advance Kiva-related loans.

In addition to the somewhat indirect cost associated with risk of expiry, it also carries direct costs because the posting of a loan on Kiva costs the Field Partner time and energy (and hence money), which is wasted if the loan request expires.

If Field Partners suffer or begin to bear extra costs associated with expiry of loans, then they will be inevitably less able to help other entrepreneurs. This goes against the primary goal of all three partners in this enterprise: Kiva, Kiva lenders, and the Field Partners. The goal for all three is to help people to build better lives by providing them with access to microcredit.

With respect to the borrowers, expiry of a loan may send an unintended message that there is something wrong with their projects that means that they don't merit being funded. We believe that every loan merits being funded, and every borrower deserves the opportunity to improve his or her life.


1.8 How can I see a list of loans in danger of expiring?

You can see a list of loans, sorted oldest to newest, by selecting “Expiring Soon” in the “Sort By:” drop-down box near the top right corner of the loan list. The oldest are those at highest risk of expiring. Or you can use this link:
http://tinyurl.com/n7r5jw


1.9 How can I see a list of expired loans?

You can see a list of all expired loans, sorted oldest to newest, here:
http://tinyurl.com/y9eh8j6


1.10 What times are there a lot of loans in danger of expiry?

We have found that the last few days of each month is a time with a greater number of loans in danger of expiry, as loans posted on the first of the month near their expiry date. Typically many hundreds of loans are posted on the first of each month, and some are inevitably left by month's end.

In addition to the end of the month, the days before the 15th of each month can be a period in which there is a significant number of loans nearing expiry. This is a period when Kiva lenders are awaiting repayments in order to re-lend. Loans posted near the 15th of one month can be overlooked until they near expiry near the 15th of the next month.


Feedback about this FAQ, as well as general discussion about the LLL team is always welcome on the LLL team thread.

To see a list of all loans in danger of expiry go to http://tinyurl.com/n7r5jw

[alan]

2 The LLL team and team membership

2.1 Who can join the LLL team?

Everyone is welcome. We hope that team members will help with the effort to fund expiring loans to the extent that they are able. Every loan of $25 helps.


2.2 Am I expected to attribute loans to the team?

LLL is a non-competitive team, whose primary goal is to help loans that would otherwise expire to get funded. Many team members belong to other teams, and make their own choices about whether to count any given loan to any specific team, whether LLL or another. We place no expectations on members with respect to attributing loans to the team. What matters is that loans get funded.

That said, there are some advantages to attributing a loan to the team. When the team logo appears on loan pages, it advertises the team and its cause. And the appearance of the loan on the recent lending activity of the team’s page may also draw the loan to the attention of other team members or interested parties who will support it.


2.3 How do I count loans to the team?

To have loans count toward the LLL Team, you can do so by default or at the time of lending.

To set the default lending team:

1) Log in to Kiva
2) Click on “My Teams” on the left-hand side
3) Select the desired team from the “Preferred Team” drop-down box

To select the team at the time of lending, you may choose the team from the “Count Toward Team” drop-down box beside each loan in your basket at checkout time. You can choose a different team for each loan, or any combination.


2.4 I have pretty specific lending preferences; can I still help?

Sure! Many lenders have quite specific lending preferences. We don’t ask you to change your preferences or to make an exception, although you might decide to do so on your own. But if you have a preference for lending, say, to men in Lebanon, there will be an opportunity to lend within your preferences to a loan in danger of expiry. And when the opportunity arises, it’s your chance to help fund a loan.

You can also help in your normal lending by regularly choosing to lend to the oldest loans that fit your criteria. In fact, if enough Kiva lenders simply sorted the loans to show the oldest first (“Expiring Soon”) before looking for loans according to their preferred criteria, the problem of expiring loans would be significantly reduced if not eliminated.


2.5 How can I manage the number of e-mails I am receiving with team messages?

You can reduce the number of e-mails about team messages to once per day or to never.

1) Log in to Kiva
2) Click on “My Account” on the left side of the screen, then “Email Preferences” toward the top of the page.
3) Select your preference in the “Send me Team Messages” drop-down box.
4) Click the “Save Email Preferences” button.

You can change these settings at any time.

If you do reduce the number of e-mails you can still see all team messages any time by logging in to Kiva and checking the team page.


2.6 How does the team get loans on to page 1?

We have learned that a concentrated effort of lending can cause a loan’s Popularity ranking to increase. In general a half-dozen or so lenders lending to a given loan in a short period of time (5 or 10 minutes) will usually put that loan onto page 1. Lending effort can be concentrated in a number of ways:

1) A formal lending campaign is occasionally organized in which specified loans are targeted for lending at specific times. In this case the hope is that 5 to 10 team members will support the loan within a 10-minute time span. Given that we have team members around the world, this sort of campaign can be run around the clock. A time that is inconvenient for some members will be convenient for others.

2) Team members sometimes send messages indicating a loan that they have recently supported and inviting others to join in supporting the same loan.

3) Anyone can check the team page at any time to see what loans have recently been made by other team members and then select one or more to support.

4) During periods when there are a lot of red loans, certain ones may be highlighted or prioritized by listing them on KivaFriends.


2.7 How can I find more information about Kiva?

Beyond the Kiva help pages, KivaFriends (www.kivafriends.org) is a great forum that, while not officially affiliated with Kiva, includes many experienced lenders and supporters of Kiva. Kiva staffers occasionally read and post to the KivaFriends forum, and there is a KivaFriends liaison, who is in regular contact with Kiva staff, providing two-way communication. You need to join KivaFriends if you wish to post to that forum, and in practice the LLL team uses KivaFriends.org for some of its activity (such as this FAQ). But, although everyone is welcome to join KivaFriends, there is no expectation that you do so. You can still read the forums as a guest and if you wish to communicate with the LLL Team, you can send a team message on Kiva or a lender message to one of the team captains.


2.8 How else can I help?

You can help to spread awareness about the problem of expiring loans through other teams you belong to and by inviting others to join the LLL team, e.g. by using the "Recruit friends" link on top of the team page. We encourage you to use discretion with either of these methods in order to avoid other Kiva lenders or teams feeling “spammed”.


2.9 Are there others who are involved in the effort, too?

Fortunately there are many other people out there who are willing to help to deal with expiring loans, either alone or together with their teams. We have set up a list of teams on KivaFriends.org (http://www.kivafriends.org/index.php/topic,4643.msg72036.html#msg72036) that have specialised in lending to people from certain countries, Field Partners, specific occupations or other criteria that are most likely to run into danger of expiry (see 1.4 “Why would a loan not get the funding it needs in 30 days?”). To avoid “spamming” these teams should be contacted not more than once a month when the need is biggest. If you know other teams that could be willing to help please send a message to one of the team captains with the link to their team page and their lending scheme so that we can include them in our helpers list.


Feedback about this FAQ, as well as general discussion about the LLL team is always welcome on the LLL team thread.

To see a list of all loans in danger of expiry go to http://tinyurl.com/n7r5jw

[alan]

3 Loan Popularity

3.1 What is Popularity?

Popularity is the default sort of the loan list on Kiva. Although we do not know the precise formula, we do know that it mainly reflects some combination of total and recent lending to each loan, with recent lending (amount lent in the last few minutes) apparently being the most significant factor. Page clicks also appears to be a small factor in Popularity ranking.


3.2 Have you suggested changing the default sort to Kiva?

Yes. One of the more popular suggestions is that Kiva should replace the Popularity sort as the default with an oldest-loans first sort (“Expiring Soon”), also known as a FIFO list (First In, First Out). Considerable discussion has also gone into suggesting a refinement of the Popularity sort, or to changing the presentation of loans entirely from a list to some kind of cloud or other presentation.

You can see a discussion of some of these ideas here.


3.3 Why doesn’t Kiva change the sort?

For a complete answer you’d have to ask Kiva. But as we understand it, Kiva wants to be able to present loan requests to new and potential Kiva lenders in a way that is attractive and compelling, which it is hoped will attract new lenders and encourage new lenders to lend. Using the Popularity sort as the default is the current way of highlighting or showcasing loans that are either new or are currently receiving support from Kiva lenders. We understand that Kiva is working on developing a new presentation of the loans, though we don’t know the details.


Feedback about this FAQ, as well as general discussion about the LLL team is always welcome on the LLL team thread.

To see a list of all loans in danger of expiry go to http://tinyurl.com/n7r5jw


(Edited per instructions from Alan, 31 May 2010)

[alan]

4 Basketing of loans

4.1 What is basketing?

“Basketing” refers to what happens when you lend to a client. When you click on “Lend Now” or “Lend $25” that amount is put into your “basket” (or shopping cart) and becomes unavailable for others to fund. It is possible to put the entire remaining amount of a loan into your basket, because it is possible that you might want to fund it, and then the whole of the loan becomes unavailable for others to contribute to. If someone puts the entire amount into a basket, and then does not proceed to checkout, it is stuck for a period of time. For lack of a better term, this is referred to as “basketing a loan”.

Obviously, when a loan is in danger of expiring, and it is basketed, this raises the level of concern that it might not get funded. It has happened that a loan is basketed at the time of expiry and does actually expire.


4.2 How can I see how much of a loan is in baskets?

You can see a simple display of key loan information including the status, the amount raised, and the amount in baskets with the following URL, replacing ###### with the loan id number.

http://api.kivaws.org/v1/loans/######.html

(You can get the loan id number from the address line on a loan’s page. For example:
http://www.kiva.org/lend/157577&_tpos=1&_tpg=1
the loan id number is 157577 in this case.)

In addition, there is a FundraisingLoans Spreadsheet, produced by a KivaFriend and LLL team founder. This Excel spreadsheet is able to gather and display comprehensive information about all Fundraising loans on the Kiva site, including the amount in baskets. You can read about and download the spreadsheet here.

A list of all loans showing the amounts in baskets (if any), and sorted by oldest first ("Expiring Soon") can also be obtained using the Kiva Sieve application.


4.3 What happens when a loan is held in a basket?

First, the loan’s appearance on the list changes, as it fades and the green “Lend $25” button is replaced with a red graphic that says “Fully Funded”. On the loan page, the amount “Still needed” disappears and the amount “Raised so far” is the full amount of the loan request. The “Lend Now” button also disappears. The loan becomes unavailable for lending. After several minutes, the loan disappears from the list entirely, though it reappears if it is released from the basket. If the loan is  held long enough, it will lose its Popularity ranking and eventually reappear farther down the list when released. If it was on page 1, it may reappear on another page. Thus any advantage it had with respect to visibility and momentum of attracting new funds is lost.


4.4 Why would someone hold a loan in danger of expiring in baskets?

We don’t know. We hope it is because the person mistakenly believes that it helps attract attention to a loan, though we can’t imagine the logic behind such an idea. It could also be the result of some unknown bug in the Kiva system. Basketing loans is counterproductive. Therefore, we do not advocate doing it with a loan that is nearing expiry.


4.5 Is Kiva doing something about basketing loans?

Many KivaFriends, including LLL team members, have drawn Kiva’s attention to the problem of loan basketing. We await the implementation of site design changes that will address the problem.


Feedback about this FAQ, as well as general discussion about the LLL team is always welcome on the LLL team thread.

To see a list of all loans in danger of expiry go to http://tinyurl.com/n7r5jw



(Edited per instructions from Alan, 2 May 2010)

[alan]

We value your feedback! This thread is intended for the FAQ, and not for discussion. In order to keep it for that purpose we ask your cooperation in refraining from posting here. Please direct all comments, feedback and discussion to the LLL team thread or by PM to one of the team captains. Thank you for your understanding.

Alan, Brennan, Jennifer and Petra


(Edited per instructions from Alan, 2 May 2010)

[JenniferK]

Your headline about who you are is misleading, and some (like Righteousness Amuses Me) believes that an "unfunded" loan means the borrower doesn't get his/her loan.  That of course is very wrong, but your explanation is in fine, fine print on the bottom of your page, and so many who don't read well (like the aforementioned RAM) misunderstands, then goes ballistic on other Kiva sites.

It is my humble opinion that you need to make a brief reference to this in your group description.

Or, not.

Thanks,
Jen