When MFIs Have Problems.....

[Guest]

.

[Jill]

       WITEP, RAFODE, and now, distinguishable in very significant ways, but still having issues, PRISMA

     I wanted a thread where we could talk about   
 MFIs and THEIR ISSUES and HOW THOSE ISSUES ARE RESOLVED

      I just now discovered that some of my Prisma loans, too, had been "Paid Back." 
As with a number of you, I felt sad to see that,
because I liked those people.

     I know that a fair amount of discussion has already been going on about Prisma in the
WITEP: KIVA RESPONDS thread,
http://www.kivafriends.org/index.php/topic,899.40.html ,
but because we all know that issues are going to keep on coming up with different MFIs
as Kiva grows and as the MFIs grow and try new things,
I thought it might be helpful just to have a general thread for MFIs,
so we can have some kind of continuity.

     I wanted to ask Kendall (Felipe):
         I understood you to say in regard to all the "Paid Back" loans that
in your most recent audit,
you were unable to verify that the Entrepreneurs we'd thought we were lending to were the actual recipients of our loans. 
I don't know if there's an implication there that somebody might have wrongfully taken or used that money,
and since I've been "paid back," I don't suppose I really need to know about that.
    But what I would like to know is---

     All these people in Nicaragua we'd wanted to loan to:

What's going to happen with them and the businesses they'd hoped to start or to grow? 
Are you hoping to submit loan requests for them, another time, once things are straightened out with your office in Nicaragua? 
From what I could read between the lines, what happened wasn't in any way "their fault."

     And, just in case I might be able to get you here and answering, Kendall,
is there any chance you'll be posting any Entrepreneurs from Solentiname (sp?), some time,
especially some of the wonderful painters there?

[Stephanie]

I feel the same way.  I don't like to think that the entrepreneurs in Uganda will just be left with no funding through no fault of their own.  I would like to know what cause there was to suspect that the loans were not reaching their intended target.  But I appreciate the honesty of the Field Partner in reporting the problem and refunding the money.

[cpbailey]

Uganda was more complex by far than Prisma.  From what I have read, it was that not all of the money reached the intended borrowers.  Also, the money that was repaid had poor accounting.  When someone made a payment, the funds were thrown in a drawer.  The records were probably insufficient, so Kiva suddenly stopped getting payments at all.  It really seemed that WITEP (Uganda) made minimal payments (often not enough to make the whole loan by the end of the term).  Then when it got a surge of new loans, ALL loan payments stopped.  Even older loans which had been doing great stopped.  The sudden stoppage seems very suspicious to me.  This speaks to me of incompentence at best; fraud at worst.

I am pointing out the Kiva made good where WITEP went bad.  On Prisma, Prisma made good when it realized that things didn't pass the white glove test.  I am pointing out the corrections made by both Kiva and Prisma because someone new may read these boards and decide that Kiva is corrupt or deals with corrupt organizations.  Kiva made a few mistakes early on and corrected the policies and procedures so it wouldn't happen again.  Prisma took over and funded the loans that may not have been obtained on terms that were not necessarily up to Kiva's standards.  Please, let's not make this appear to be a bigger issue than it is!  We wouldn't want to turn some potential lenders off from Kiva.

Colette

[cpbailey]

Jill,

I believe that Nicaragua loans have been assumed by Prisma.  So it probably has no impact on the Kiva borrowers.  The impact is on Prisma; they have used a lot of cash on hand to repay Kiva, leaving less money for non-Kiva loans.  Actually, more accurate--Prisma will have all the Nicaragua loans deducted from new loans.  So their electronic check will be vastly reduced this month.  As these borrowers repay their loans, Prisma will replenish their cash reserves.  Hopefully, Prisma Nicaragua will do what they need to do to get back on Kiva.

Colette

[Kay]

See Kendall Mau's latest post on his blog (accessible via the link at the top of this forum or via http://microfinancetravels.typepad.com/), entitled "Smoothing Out the Bumps in Nicaragua."  This explains a lot.  In part: 

"Yesterday, I had trouble reaching my usual contact at Kiva to have her spend 2 hours with me trying to do a refund for each of the 30 loans.  Kiva's system does not allow me to do refunds.  To get around this obstacle, I just repaid all the loans.  Better to get the money back to the investors ASAP than wait around and chase down the Kiva contact to do them for me."

Edit:  Could the outcome have been, in any way, more positive?  I think not.  And I think it only reinforces Prisma's impeccable reputation for integrity. 

Second Edit:  I have already reloaned some of the funds, myself:  to help fund Prisma loans recently posted from Honduras, among others.  I look forward to the day when new Prisma loans from Nicaragua reappear on Kiva. 

[Jill]

      Thanks for the "heads-up," Kay.
Here's Kendall's blog with his up-front explanation of what happened with Prisma's Nicaragua office and our loans.
http://microfinancetravels.typepad.com/

     An aside:   
                       The following is Kendall's closing line in his last blog posting:
                     "The GM (General Manager) has been dealt with."
         
              Editorial Commentary on That Last Line:
                       Some short sentences, like many pictures, are worth those proverbial thousand words.

     
      A second aside:
                             This situation -- the resolution and explanation of it --
                             present, in my mind,
                             a valuable lesson
                             in the desirability of our giving "the benefit of the doubt,"
                             at the very least,
                             to organizations and to individuals
                             who have given us every reason to believe in (and no reason, really, to doubt)
                             their integrity.

     

         Just saw that Kay had edited her "Blog Alert" while I was writing this post,
and that her edit included the word, integrity, as well.
That both she and I have used that word when discussing Kendall and Prisma,
and that many, probably very many others of us feel or will feel the same when they read all this,
should make Kendall (and Kiva?) feel pretty nice, I would think.

Us, too, now that I think about it!
                             


                             


                 

[Dottie b]

See Kendall Mau's latest post on his blog (accessible via the link at the top of this forum or via http://microfinancetravels.typepad.com/), entitled "Smoothing Out the Bumps in Nicaragua."  This explains a lot.  In part: 

"Yesterday, I had trouble reaching my usual contact at Kiva to have her spend 2 hours with me trying to do a refund for each of the 30 loans.  Kiva's system does not allow me to do refunds.  To get around this obstacle, I just repaid all the loans.  Better to get the money back to the investors ASAP than wait around and chase down the Kiva contact to do them for me."

Looks like Kendall is on the ball and Kiva is not! They couldn't do refunds?

Dottie B

[Kay]

Dottie,

Kiva always has 10 million (!) things to do, with very few people to do them!

Also, you might want to check out this thread (!):  http://www.kivafriends.org/index.php/topic,962.msg7407.html#msg7407

[Dottie b]

Let's hope their attention to housekeeping keeps pace with their attention to publicity!

Dottie B

[cpbailey]

Dottie,

The designated person who Kendal works with was not available at the time.  Knowing that it was a long process, he moved to correct things on his end.  Kiva can correct the official designation when time allows (based upon priorities).  Right now there is an upcoming Today show tomorrow, with a HUGE volume of lenders likely.  The computer folks are probably making sure that is ready.  The loans are stacked up.  WITEP problem is probably being researched for lawsuits.  New partners are showing up faster and faster.

Let's remember this is like running an international company with about 20 staff people and probably countless volunteers.  Amazing!!!

Colette

[Henry]

Collette and Kay, the KIVA cheerleaders!     

(that's not a bad thing)

[Kay]

I'm glad you think so!

[Kay]

Right now there is an upcoming Good Morning America show tomorrow, with a HUGE volume of lenders likely. 

Ah, that's the Today Show, on NBC!

[AccountAbility]

Since there were so many posts over there at the other water cooler, I missed that this thread had also started.  (Could have kept the other one much briefer.)
So I am posting it here as well.

My Goodness!  Grin

I go off for a day and return to find this huge bunch of postings here having nothing to do with WITEP.

I think it was Baron Von Bismarck who said, "You really don't want to look too closely about how either sausages or laws are made."

I think we need to add Kiva processing to his list.  Here's a bunch of folks at Kiva with hearts of gold and a fair amount of smarts running as fast as they can to keep ahead of a mushrooming organization, addressing and adjusting things as they both become aware and as sheer size dictates.

An almost singular event occurs and they do the best they can with it.   So then we can analyze it after the fact and maybe come up with constructive suggestions for "a next time".  (And this would apply to WITEP as well.)

Then let's get on with what this is all about. Smiley

Dan

[Henry]

need your secret decoder glasses on to read that !

here is an invisible smiley or two!   "                              "

[RichardF]

Jut highlight it and it turns colors! 

[cpbailey]

Kay,

I stand corrected about the show name.  I hate to say, I rarely watch any morning t.v.  I updated my record.  Thanks.

OK.  On this whole Prisma thing...lessons learned.

1.  Questions that are about competance of Kiva or partners is best handled first behind the scenes. 

2.  The cogs of Kiva, partners and justice turn slowly.  We need to give more than two days to let folks update and correct things.  I vow not to be sucked into much of anything unless a week or two has passed...   

Let's remember that future lenders may read these notes and decide to support or not to support based upon what is here.   

Colette

[Henry]

lol