Fundación para la Vivienda Progresiva

[Guest]

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[simba]

did you guys notice that almost all the loans from this MFI is for home improvement?  I thought it kind of defeats the goal of lending money to a low income businesses for business purposes.  There is this lady who wants to buy two AC units

http://www.kiva.org/app.php?page=businesses&action=about&id=15467

or http://www.kiva.org/app.php?page=businesses&action=about&id=15509

or http://www.kiva.org/app.php?page=businesses&action=about&id=15433

or http://www.kiva.org/app.php?page=businesses&action=about&id=15435

and looking at their houses they certainly don't look like low income.

[Carol]

I noticed that they do not show their interest rates to the Borrower.  I would like to know more about this MFI.
Carol

[Henry]

I just emailed the MFI, might be a question Jill can post in her KIVA Topic as well.  ....me...I won't loan to them until they do.

[Carol]

I am also becoming more diligent in checking out MFI's.  It is a lot to learn.
Carol

[Joe]

Those type of loans seem to take longer than usual before they're fully funded. You'll probably still see all those listings on the Kiva site next week. In fact the second link posted says "22 days left" and has raised $375 out of the $1200. So I think that one has already been on the site for at least a week.

If any listings ever reaches the end of the "days left" countdown it'll probably be one from this MFI or others like it.

By the way, their official website is: http://www.chfinternational.org/section/mexico It looks like they represent low income folks (even though they don't appear to be, compared to others on Kiva)

[wind5001]

I find that quite disturbing...the loan description is SO cryptic and how on earth to find out whether they'll be able to pay back? Simply trusting the MFI to do its background check is not enough for me. I wish they'd just tell more...

Oli

[Ulli]

I find that quite disturbing...the loan description is SO cryptic and how on earth to find out whether they'll be able to pay back? Simply trusting the MFI to do its background check is not enough for me. I wish they'd just tell more...

Oli

A few weeks ago, there were other applications for home improvement loans and they also got funded very slowly, because it didn't say how the borrowers were earning their living and how they intended to pay back the money. I have softened somewhat towards the home improvement loan requests after reading Muhammad Yunus book because Grameen also provides home improvement loans.
Maybe KIVA can suggest to the MFI that is submitting the home improvement loans that they should add more information about their borrowers.

Ulli

[cpbailey]

Ulli,

I agree that many of the home improvement loans could be written up so that they seem more attractive.  I don't care if they have a business, but there could be something about what means they have to repay.

Elsewhere there is a thread on this, and I wrote a sample home loan description.  Too lazy to rewrite it or find it...

Colette

[simba]

It is true that people can borrow money for any reason they feel like it, and lenders are free to decide who they want to fund.  However, the down side is that kiva may become developing worlds prosper.com.

From their website

Kiva lets you connect with and loan money to unique small businesses in the developing world. By choosing a business on Kiva.org, you can "sponsor a business" and help the world's working poor make great strides towards economic independence.

Also from their website:

Kiva lets you lend to a specific entrepreneur in the develping world - empowering them to lift themselves out of poverty

and

Each pre-screened entrepreneur is hardworking and hopes to create a sustainable livelihood.

This MFI has 308 loans, and almost 85% of them were for household finance, and they do charge 36% interest rate.  Providing home improvement loans IS their charter.

[Henry]

Email Response regarding Interest Rate charged:

Dear Harry,

Per your questions on the profile of CHF International’s Fundacion para la Vienda Progresiva (FVP) featured on the website kiva.org, I have the following information to share:

The average Interest Rate the Borrower pays to the Kiva Foundation’s Field Partner FVP is 36% (annual rate).

The average local Money Lender Interest Rate is, in the case of MFIs, about 60%. 

In FVP’s local context, loans are most commonly requested from pawnshops, whose average annual interest rate is about 120%, and the average local Money Lender Interest Rate is 100%.

Following your suggestion, the above information is now featured in CHF’s profile on the kiva.org website. 

We appreciate your efforts at keeping the microfinance field transparent and thank you for your continued support!
Warmest Regards,