I have only had one bad debt on Kiva. I lent a few dollars to Golden Services Organisation in Kenya. GSO raised $4,950 in total but only paid back $1,653. The money had been use to sell charcoal fuelled stoves but they were sold on credit and you can guess the rest. I wrote about it in a post What’s Cooking last year.
I had written off my loan so it was an unexpected surprise to get this e mail:
We’re writing to let you know that your Kiva loan to Golden Services Organisation has been exempted from default. This loan is eligible for default because it is more than 180 days behind on repayment, but the Field Partner, Burn Manufacturing, requested an exemption for this reason:
The borrower is currently in the process of getting a larger loan to finance the business and from this it plans to repay the KIVA loan.
With micro loans, it’s common to try to reschedule loan terms to accommodate eventual repayment, and our hope is that the borrower will be able to take advantage of this flexibility and make future repayments on their loan. We appreciate your patience and your support of borrowers on Kiva.
Best wishes,
The Kiva Team
I have seven other micro loans paying back and as they do, re-lend the money to other borrowers. So far I have made thirteen loans to borrowers in eleven countries. GSO has been my only default and they may come good; a better record than most commercial banks. If you are unfamiliar with Kiva here is an introduction.
Thanks for posting about Kiva. I have been making small loans to women for years and they always repay and the loan fund keeps giving. Another effort your readers might like is Educate! It started in Uganda and has now expanded to Rwanda and Kenya. A first rate effort to build entrepreneurship into high school curricula, mentor kids and teachers and then evaluate their success. Check out their website. The founder has really figured out like Kva how to help individuals put money into their pockets on their own.
Another one to be recommended is Lend with CARE which is rather similar to Kiva and is UK based ( to disclose an interest, I am a Trustee there).
It looks excellent and I have joined.
Oh, Good. I would be most interested in any feedback – positive or negative- after you have been involved for a while, particularly as you have a comparator in/ and experience of Kiva.
I have made three loans, in Cambodia, Vietnam and Zambia. On Kiva, donations are voluntary here they are a mandatory 10%. The layout is similar to Kiva. I tried to buy something from the shop but the online payment seems to be broken. I have sent an e mail pointing this out.