In addition to the description you posted, Jennifer, there is further detail in the "More information about this loan" section on Rosario's loan. I don't recall having seen this before, is it new?
This is a unique loan product as repayments are linked to a percentage of profits. Borrower will pay a percentage of profits up to two-times the original principal. By linking repayments to profits, instead of fixed repayment amounts, borrowers can be assured that Namaste is really commited to making their business succeed.
In addition to a micro-loan, through its STARZ Program, Fundacion Namaste Guatemaya, provides its borrowers with the business support that will help their enterprises grow.
Namaste provides financial literacy, business education, cash flow analysis, and opportunities for entrepreneurs to to share experiences and best practices. The capstone of their model are Business Advisors that provide each borrower with one-on-one mentoring.
Namaste measures it success through the increase in profits of its borrowers and with this product, it is explicitly linking repayments to those profits.
Of the more than 900 Namaste borrowers who have completed the business development program, on average their profits increased by 41%. Namaste clients are averaging USD2.50 per hour vs the Guatemala minimum wage of UDS1.00.
I looked through a few other Fundacion Namaste Guatemaya loans and I did not see this text on any of the others I skimmed through, so this is either a new loan product or I may have just randomly picked loans that were not structured in this way. Repayments of "up to two-times the original principal", eh? (To the MFI, not to Kiva lenders, of course.) Not sure how I feel about that....