Pay Interest...

[Guest]

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[mitchmedford]

I have been a BIG supporter of Kiva and have told many of my friends and co-workers about it. While I know that this sounds capitalistic, the biggest inhibitor to many of my friends is the fact that the money does not earn any interest and is not available to be used again until the whole loan is paid off. We all know the the field partners are charging interest, so why not pay a basic savings account rate to the Kiva lenders? Imagine the lending power of many people moving their saving accounts to Kiva. Can someone explain why interest can't be paid and why the money is not available to be reloaned until the entire loan is repaid?

[Laurie]

Hi, Mitch, and welcome to Kiva Friends.

Many of us have had the same thoughts you do.  You can find a thorough (maybe TOO thorough!) discussion of the pros and cons of paying interest on this thread:
http://www.kivafriends.org/index.php/topic,215.0.html

We hope to hear more from you!

Safe travels,
Laurie

[Diane R]

There is a 14-page thread on this topic ("Paying Interest to Lenders, Pro and Con"), here:

http://www.kivafriends.org/index.php/topic,215.0.html

There are some strong opinions on both sides of the question. (Including that there are current lenders who would STOP being lenders if Kiva paid interest!)  Take a look.  (As a forum moderator I'll probably merge this into that thread with a pointer, once you've had a chance to hop over there.)

--Diane.

(And PS: a good part of the reason why money isn't available until the loan is repaid is the logistics of it.  Kiva is a low-budget operation, and to ask them to make 88,000+ micro-payments to lenders through Paypal each month would be asking kind of a lot...)

[mitchmedford]

There is a 14-page thread on this topic ("Paying Interest to Lenders, Pro and Con"), here:

http://www.kivafriends.org/index.php/topic,215.0.html

There are some strong opinions on both sides of the question. (Including that there are current lenders who would STOP being lenders if Kiva paid interest!)  Take a look.  (As a forum moderator I'll probably merge this into that thread with a pointer, once you've had a chance to hop over there.)

--Diane.

(And PS: a good part of the reason why money isn't available until the loan is repaid is the logistics of it.  Kiva is a low-budget operation, and to ask them to make 88,000+ micro-payments to lenders through Paypal each month would be asking kind of a lot...)

Wow, I guess I should have read more before asking my questions. The answer you give for processing the thousands of small payments makes sense and thanks for pointing it out.  I can see that there are a lot of strong opinions on the whole interest topic! I plan to keep supporting Kiva with or without interest. I was just intrigued with being able to tap into the "savings account" business for expanded access to capital. As a executive, I have spent a lot of time raising funds and looking for ways to gain market share. I do have to admit that it seems Kiva does not have a problem raising capital for loans so why complicate things. If it works, don't fix it!

Please feel free to move this since I have know had a chance to read the whole debate and I certainly don't want to muddy up the web site with a replay.