? Is it true that Kiva intends to offer to pay lenders 1-5% interest in the next 1-2 years.
Thanks
Carol
I think this would be great!
Just looking at the average field partner interest rate of 19% vs the local money lender interest rates of 80%, I think it would be completly feasible to.
A) Slightly increase the rates that field partners lend at to 21% (we get 2% interest, lenders pay more interest...
not ideal)
B) The field partners could decrease their lending rates to ~16%, charging an effective 18% rate of interest (we would get 2% interest, field partners would get borrowers would pay 1% less in interest.)
I believe these changes would most be most effectivly enacted if Kiva was able to convince several field partners to look into option B. While they would recieve lower rates of interest, the increased capital investment from individuals who have money in non-emergency savings accounts would account for the short term loss incured by the lending institutions.
I also think this would become a stronger point of interest as the number of loan requests exceeds the demand of those lending. (It currently appears that the majority of Kiva loans are quickly filled, which is great, but as word spreads, the imbalance of loan demand to capital supply may call for interest yielding loans on Kiva.)
If I was able to get 1-5% interest, I would happily transfer out my money from ING/Emigrant Direct to hold here. I believe that this would happen on a wide level over time.
As far as questions for the conference, RichardF covered all the points I would like to hear about. Please let us know how it goes!
