Kiva Field Partner Delinquency and Default Histories

[Guest]

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[Skimmis]

Updating the tables previously posted here and here with the latest data posted on Kiva's website for others who may benefit from this information in making their lending decisions. In summary, the total arrears to Kiva lenders is listed at $967,487 as of this morning, down from $1,571,892 on October 1, 2011. The 25 Field Partners listed below represent $805,858 (83%) of that overdue debt.

						Arrears		Arrears		Arrears		Change in Default
Status		Field Partner				Oct 1,2011		Oct 14,2011		Oct 31,2011		Since Oct 1, 2011
Paused		FECECAV				$225,123		$225,119		$205,475
Paused		AFS				$169,260		$169,260		$27,692
Paused		LEAP				$141,834		$141,834		$141,834
Paused		AMK				$46,391		$46,391		$46,391
Paused		K-Met				$15,963		$15,944		$10,964
Active		Pearl Microfinance Limited				$98,154		$98,154		$98,154
Active		CrediComun				$97,626		$37,147		$36,354
Active		KADET				$64,541		$64,541		$26,658
Active		Microfinanzas Prisma				$46,424		$46,424		$33,803
Active		ARD				$40,717		$40,717		$36,089
Active		Ameen s.a.l.				$35,543		$35,543		$20,883
Active		CRAN				$29,405		$12,731		$8,879
Active		Juhudi Kilimo				$28,608		$28,608		$12,804
Active		Apoyo Integral				$27,268		$27,268		$12,588
Active		Tujijenge Tanzania				$24,341		$24,341		$6,461
Active		CEPRODEL				$23,994		$7,065		$4,399
Active		FATEN				$18,520		$18,520		$4,980
Active		PADECOMSM				$17,783		$17,783		$10,324
Active		FAPE				$16,933		$16,933		$10,455
Active		Fundacion Mujer				$16,877		$14,718		$12,260
Active		GDMPC				$16,435		$16,435		$0
Active		Credituyo				$16,058		$16,058		$12,068
Active		SMT				$15,140		$15,140		$3,364
Active		Fundación Leon 2000				$15,110		$15,110		$9,317
Pilot		WDB				$20,317		$13,662		$13,662

Paul

An update would be much appreciated

[Ali]

Ali - no news yet, I suppose.

Howard

We're working on a partner page update for WDB that should go up soon, and John is working on an update from LEAP.

I did find out what was causing CrediComun to have such high delinquency. In the last two months CrediComun has not posted any loans to Kiva and have paid us back $196,422.62 during that time, Their amount outstanding has decreased, and is now about $45K.

The delinquency calculation is: Amount of payments past due / Total outstanding principal balance the Field Partner has with Kiva.  Since that denominator of this equation has decreased by almost $200K in two months, the delinquency rate has jumped, even though the numerator has not increased.

We are still reaching out to CrediComun to find out more about the payments that are past due, and I will update you if I find out any more news on that.

[howard]

Ali,

I should have made it clear, but your quoted comment was in the context of Pearl's arrears.

Howard

[Ali]

Ah sorry about that! We're actually working on an update for Pearl right now that should go up on their partner page soon.

[cpbailey]

I must have forgotten ONCE to turn on the filters for delinquency.  I made over 100 loans in 24 hours, and it is frustrating to have to move those sliders every batch of loans.  I chose one loan from Pearl.  I wouldn't have chosen to override my standards by that BIG a delinquency rate.  Hoping that the news isn't bad news for Pearl's newest loans.  The bigger the spread for delinquencies, the harder it is to get the slider to the number I want.  Wishing there were a way to have a personal preset filter.  It would have countries, FPs, star range, delinquency and default ranges, currency risk, and that other button...unverified FP info or something.  I would like to throw in time MFI were on Kiva as well.

Colette

[carien]

So far I have six defaulted loans and the strange thing is they are all group loans. So don't get your hopes up that lending to groups is more safer as Kiva tries to let us believe. Well 3 years of fun and loosing around 40 dollars is not bad not bat at all.

[Skimmis]

http://www.kiva.org/partners/84 PEARL  increasing
Delinquency Rate: 48.72%
Loans at Risk Rate: 84.38%

[cjp1973]

The updated dated December 28, 2011 speaks to the increasing delinquency of Pearl

Status Update: December 28, 2011

Pearl's loan portfolio on Kiva is currently showing a relatively high delinquency rate at 35.02%, and we wanted to give you some more information about this situation.

Pearl is currently experiencing liquidity difficulties, which is impacting its ability to make its repayments to Kiva on time.  To assist Pearl, Kiva has agreed to restructure the remaining balance outstanding into three installments, to be paid over the next three months, along with regular monthly balances.  By April 2012, Pearl is expected to be current on delinquent repayments.

Liquidity is a payment timing issue, where the timing of funds due to be paid by an organization does not match the timing of incoming funds.  This is an issue all businesses must manage, but is more difficult to balance for an organization managing multiple repayment obligations, as most Kiva Field Partners are.  In the current situation with Pearl, a currency devaluation of the Ugandan Shilling against the US Dollar, combined with Kiva's net billing system, contributed to a situation where Pearl experienced liquidity difficulties.

Recently, the Ugandan Shilling significantly devalued against the US Dollar.  As Kiva loans are made in US Dollar loans, currency fluctuations can impact Field Partners.  In the case of Pearl, loans are received by Pearl in US Dollars, and loaned to the borrower in Ugandan Shillings.  In response to the currency devaluation, Pearl temporarily paused posting new loans on Kiva to wait until the currency had stabilized against the US Dollar.

At the same time as Pearl paused posting new loans, a large number of Pearl loan repayments came due.  Typically, repayments due would be offset by new funds being loaned, leaving only the difference to be paid in cash.  Kiva refers to this as our net billing system, meaning that we subtract the amount of repayments that a Field Partner owes to Kiva lenders from the amount that a Field Partner fundraises for borrowers on Kiva.  Because Pearl temporarily paused fundraising on Kiva, the difference to be paid in cash was much larger than usual, and Pearl faced liquidity constraints.

The new repayment structure, agreed between Pearl and Kiva, will result in continued high delinquencies over the next few months until the adjusted repayment schedule catches up to the original repayment schedule.

[Dottie b]

I thought the lender assumes the loss for currency devaluation.

[JohnAtKiva]

I thought the lender assumes the loss for currency devaluation.

Hello Dottie!  Partners still have to cover the first 20% of a local currency's cost of appreciation... more here:

Repayment Collection and Currency Risk

When lending funds across national boundaries, an implicit risk exists with currencies changing relative to one another. The local currency in the Field Partner's country of operation may, for many reasons, lose some of its value relative to the USD, thus requiring the Field Partner to use more of its local currency to reimburse Kiva (Kiva's working currency is the US Dollar). As a means of encouraging responsible lending, Kiva offers Field Partners the option to protect themselves against these currency fluctuations. In cases where the US Dollar appreciates by more than 20% relative to a local currency, Field Partners who opt for currency exchange loss protection will only be responsible for covering the first 20% of the local currency’s cost of appreciation while lenders will cover the remainder of the cost. This can help the Field Partner continue funding local borrowers even through difficult economic climates.

http://www.kiva.org/about/risk/field-partner-role

Hope that helps!

John