I suspect that there are other issues involved. All of my loans (one exception) have been made to borrowers in Africa; therefore, they are all to people of color. One thing I have noticed is the photographers who take the pictures for Kiva use the "auto" feature on their point and shoot cameras. As a result the pictures of people with very dark skin are not as good as the pictues of those with lighter skin. I wonder i the quality of the photos might have more to do with the test results than any prejudice.Originally Posted by Todd Erickson
Another issue is the fact that almost all of the applications for loans on Kiva are funded. To study the loans that are funded is simply to study the applications. A more meaningful study would focus just on the few loans that are not funded. What are the characteristics of the loan applications that are rejected?
I reread the article and concluded that the greatest bias shown is that of the person who wrote the article. The author didn't understand how Kiva works. The study did a statistical analysis which showed that most of the Kiva loans go to women with light colored skin. They then jump to a conclusion that there is bias involved by those who make online loans.
The truth is that almost all of the loans listed on Kiva are "prefunded" loans with their own funds. The loans are then posted on Kiva where people like me buy a $25 share of the loan. If a loan appliation expires, it doesn't mean the borrower doesn't get the loan. It merely means that the lender remains at risk for part of the loan that was already made.
Since basically all of the loan requests posted on Kiva get fully funded. The "bias" merely reflects an imbalance in those seeking loans, not a preference by the participants on Kiva.
For those who are interested, here are the current statistics from Kiva.Org:
Total value of all loans made through Kiva: $299,478,425
Number of Kiva Users: 1,151,940
Number of Kiva Users who have funded a loan: 742,131
Number of countries represented by Kiva Lenders: 218
Number of entrepreneurs that have received a loan through Kiva: 757,069
Number of loans that have been funded through Kiva: 389,950
Percentage of Kiva loans which have been made to women entrepreneurs:80.43%
Number of Kiva Field Partners: 146
Number of countries Kiva Field Partners are located in: 60
Current repayment rate (all partners): 98.94%
Average loan size (This is the average amount loaned to an individual Kiva Entrepreneur. Some loans - group loans - are divided between a group of borrowers.): $392.05
Average total amount loaned per Kiva Lender (includes reloaned funds): $260.29
Average number of loans per Kiva Lender: 7.95
One more comment: The study doesn't look at another important issue -- what is the loan request for? I just went to Kiva and looked at the loan requests that are close to expiring. I noticed that several of them are for alcohol related businesses. I don't lend to anyone who is borrowing to support an alcohol related business. The study would look only at the gender and race of the borrower and would totally overlook the real reason I wouldn't make the loan. I suspect that there are a lot of other lenders who don't lend to bars.
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