- Joined
- Apr 5, 2005
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I've been lending on Kiva for about 4 years now. 50% APR may sound usurious, but in many of the countries Kiva works with, there would literally be no other way for the people seeking the loans to get access to financing - the banking system is limited or non-existent, and not geared towards micro lending. Plus 50% is hardly in the same realm as the 2,000%-4,000% charged by payday companies, and the fact that over 98% of loans get repaid suggests that the overall "system" must be working.
There's more information on the interest rate aspect here:
http://www.kiva.org/help/solution/why_are_your_field_partners_interest_rates_so_high
NOTE #1: I think Kiva dropped the ball when they opened the system to larger loans for folks in the USA who could not normally get access to credit - it diluted their core message. But I just ignore those borrowers in the list and pick people with projects that sound interesting.
NOTE #2: If you've not used Kiva before, it's worth pointing out that the loans get progressively repaid into yout account (unless they're part of the 2% that go bad) and you can then re-lend to other borrowers. Kiva also request help with their running costs, but it's an optional contribution so you can focus your funds solely on making actual loans if you prefer. And of course you can let the repayments accumulate rather than re-loaning them, and then withdraw the money into Paypal if you like.
There's more information on the interest rate aspect here:
http://www.kiva.org/help/solution/why_are_your_field_partners_interest_rates_so_high
NOTE #1: I think Kiva dropped the ball when they opened the system to larger loans for folks in the USA who could not normally get access to credit - it diluted their core message. But I just ignore those borrowers in the list and pick people with projects that sound interesting.
NOTE #2: If you've not used Kiva before, it's worth pointing out that the loans get progressively repaid into yout account (unless they're part of the 2% that go bad) and you can then re-lend to other borrowers. Kiva also request help with their running costs, but it's an optional contribution so you can focus your funds solely on making actual loans if you prefer. And of course you can let the repayments accumulate rather than re-loaning them, and then withdraw the money into Paypal if you like.
