The NazNet Lending Group on Kiva.Org just reached a milestone!!

[Dave McClung]

The NazNet Lending Group on Kiva.Org just reached the 1,001 level of lending. I appreciate those who have joined me on this effort. Kiva loans continue to make a positive difference.

Two of the loans I made today are to individuals who have previously borrowed and repaid. The fact that they repaid shows that they are being sucessfuly in their small businesses.

[Jon Twitchell]

If anyone's looking for a loan to fill... I helped this guy get started (http://www.kiva.org/lend/425187), but the loans seemed to stall out. There were two lenders on May 22... and then it sat there for quite a while before moving up to the current 44%. This morning I notice that Kiva says "4 days left" on his loan. Anyway... if you're looking for a loan to make...!

I know that Kiva loans are just back-filling loans that the micro-finance institution is making. Does anyone know what actually happens if the loan is not back-filled in time?

[Dave McClung]

I usually limit my lending to Africa, but made an exception for your recommended loan.

If the loan isn't back-filled, the amount pledged is returned to those who pledged and the micro-finance institution has less funds to fund other loans. It doesn't hurt the borrower. This practice provides an incentive for the financial institutions to do their best in presenting the qualifications.

In all the time I have been lending, I have had less than 10 that were not fully funded. It seems to be happening a lot more lately. One concern I have is that some of the institutions have started posting what I call "consumer loans." I want to support people who are attempting to build businesses. I think it is unhealthy to encourage people in the third world to raise their standard of living by borrowing. Unless they increase their income, borrowing for consumer goods will only create more problems. Why teach these people our bad habits?

[Jon Twitchell]

Dave,

Thanks... both for helping out "my guy," and for the explanation of expired loans.

I chose Luis for a few reasons:

1) Having been to Ecuador, I have a personal connection with the country, and understand some of the poverty there.
2) Theoretically, fruits/veggies and juice are a wholesome and nutritious business endeavor
3) While part of the loan is for supplies to resell, I appreciated that part of the loan (and I assume the related longer term) is for a capital expense--an industrial juicer. (Often, I just see loans which are for the supplies to sell... groceries, or lumber, or charcoal... my concern is that some of these loans/businesses are very short-term focused, and will simply need another loan in 6 months to sustain their business)
4) The Field Partner states that it is based on Christian values, and is primarily owned by a mission organization. On top of that, the Field Partner has a 4 star rating.

Your reply about the back-filling of loans reminds me that my decisions need to incorporate an evaluation of the Field Partner as well as the individual/group. If the field partner is dipping into capital to fund loans which are not being filled, then the field partner may not be stable. In some sense, our loans are supporting the MFI as much as they support the individual.

Your comments about consumer loans are very helpful, and also good to keep in mind.

Perhaps we can write a new poem:

What happens to a loan expired?
Does it dry up
like a raisin in the sun?
Or fester like a sore--
And then run?
Does it stink like rotten meat?
Or crust and sugar over--
like a syrupy sweet?

Maybe it just sags
like a heavy load.

Or does it explode?


(With apologies to Langston Hughes!)

[Dave McClung]

Dave,

Thanks... both for helping out "my guy," and for the explanation of expired loans.

I chose Luis for a few reasons:

1) Having been to Ecuador, I have a personal connection with the country, and understand some of the poverty there.
2) Theoretically, fruits/veggies and juice are a wholesome and nutritious business endeavor
3) While part of the loan is for supplies to resell, I appreciated that part of the loan (and I assume the related longer term) is for a capital expense--an industrial juicer. (Often, I just see loans which are for the supplies to sell... groceries, or lumber, or charcoal... my concern is that some of these loans/businesses are very short-term focused, and will simply need another loan in 6 months to sustain their business)
4) The Field Partner states that it is based on Christian values, and is primarily owned by a mission organization. On top of that, the Field Partner has a 4 star rating.

Your reply about the back-filling of loans reminds me that my decisions need to incorporate an evaluation of the Field Partner as well as the individual/group. If the field partner is dipping into capital to fund loans which are not being filled, then the field partner may not be stable. In some sense, our loans are supporting the MFI as much as they support the individual.

Your comments about consumer loans are very helpful, and also good to keep in mind.

Perhaps we can write a new poem:

What happens to a loan expired?
Does it dry up
like a raisin in the sun?
Or fester like a sore--
And then run?
Does it stink like rotten meat?
Or crust and sugar over--
like a syrupy sweet?

Maybe it just sags
like a heavy load.

Or does it explode?


(With apologies to Langston Hughes!)

Thanks for the poetry.

I went through a lending phase when I favored certain of the micro-finance agencies over others, but have come around to the position that I focus only on the person receiving the loan. Some of the "weak" agencies are in countries where it is almost impossible to get a loan, like the Democratic Republic of the Congo. I decided to take a little more risk (How much risk can I take on a $25 loan?). Because of my decision to take more risk, my Delinquency Rate has increased to 12.96%. The default rate is still less than one percent. I have made $16,075 in loans and have lost $111.

[Ryan Scott]

http://www.kiva.org/lend/427254?_te=lew


We've contributed to this loan, but it's about to expire without funding. This would be the second such loan in a row for us.

It would be great if you could help fund it.

It used to be that you could hardly find available loans on Kiva; now it seems like there's too many. Have they done better in adding partners or has the fad passed for some people?

[Dave McClung]

http://www.kiva.org/lend/427254?_te=lew


We've contributed to this loan, but it's about to expire without funding. This would be the second such loan in a row for us.

It would be great if you could help fund it.

It used to be that you could hardly find available loans on Kiva; now it seems like there's too many. Have they done better in adding partners or has the fad passed for some people?

Ryan, that loan is a hard one. There are so many people in the group, that it will be almost impossible to fund the loan.

I have stopped making group loans because they only give information about the lead borrower. The description tells you about the group leader, but not about the other members of the group. They wouldn't all be selling gasoline.

I will check back tomorrow. If they are close enough that my loan would make a difference, I will support them, just because you asked.

One postive aspect is that the lending agency is an affilliate of HOPE International. That is an excellent organization.

[Ryan Scott]

Yeah, we try to only go with HOPE International loans - it's seemed like the best bet so far. Initially I was doing a lot of examination of repayment percentages to see how much it actually cost the borrowers to pay back the loan - but that information fluctuates pretty wildly even within one country and for one lending partner that it stopped being reliable. That's why we've switched to HOPE International loans; at least it's an organization I trust.

We've done group loans and only to groups with a strong history of repayment. We've done this mostly because we don't have a lot of money to invest with Kiva and I want to keep the risk as low as possible.

[Jon Twitchell]

I think that one of the interesting things about Kiva is the wide range of reasons any one of us might support a particular individual... and an individual that we've never met, at that.

There are all sorts of objective criteria that might be considered: location, type of business, ratings of the FP, size and duration of the loan, etc.
And there are all sorts of subjective things that probably come into play--and maybe even influence our choices without us realizing it... how the person is dressed... the backdrop of the picture... our own thoughts about poverty and worthwhile endeavors... etc.

I decided to loan as my business... YourChurchWeb. Since I made that decision, it occurred to me to pay particular attention to technology loans that I might be able to support. I have particular connections with Ecuador, Belize, and South Sudan... loans in those places would land higher on my list than others. If I read the story and see that the person is working on an education, then they probably get a bumped up a couple of points... even more if they're trying to support a family, get an education, and start a new business... and if they dress nice then it communicates to me that they see this as important.

The point is that we all have some sort of matrix/grid/filter that we use to help us decide... some of the criteria are easily evaluated... and I suspect that there are criteria that we haven't even stated or named.

It's all very interesting to me... I'm curious to learn about others' criteria.

[Dave McClung]

I think that one of the interesting things about Kiva is the wide range of reasons any one of us might support a particular individual... and an individual that we've never met, at that.

There are all sorts of objective criteria that might be considered: location, type of business, ratings of the FP, size and duration of the loan, etc.
And there are all sorts of subjective things that probably come into play--and maybe even influence our choices without us realizing it... how the person is dressed... the backdrop of the picture... our own thoughts about poverty and worthwhile endeavors... etc.

I decided to loan as my business... YourChurchWeb. Since I made that decision, it occurred to me to pay particular attention to technology loans that I might be able to support. I have particular connections with Ecuador, Belize, and South Sudan... loans in those places would land higher on my list than others. If I read the story and see that the person is working on an education, then they probably get a bumped up a couple of points... even more if they're trying to support a family, get an education, and start a new business... and if they dress nice then it communicates to me that they see this as important.

The point is that we all have some sort of matrix/grid/filter that we use to help us decide... some of the criteria are easily evaluated... and I suspect that there are criteria that we haven't even stated or named.

It's all very interesting to me... I'm curious to learn about others' criteria.

You are right. We all have criteria for which loans to make and which to avoid.

When I first started, I approached the loans in a more business-like manner. I focused a lot on how I understood the opportunity for business success. Over time, I have started to develop a "gut feel" for which loans will help the most. The pictures are an important part. I agree with you that a person who is well dressed and looks like he or she is well groomed will get a loan before one who is unkempt. I also study the pictures for things I try to avoid: alcohol, cell phones and motorcycles.

I used to make a lot of group loans, but have now stopped. The Kiva approach to group loans is to pick one person out of the group to serve as the leader. They tell you about the leader, but not the rest of the people in the group.

For a few months, I have been lending where I am the first to lend. My reasoning was that I would be encouraging others to join me. Now that there seem to be more requests for loans than there are lenders, I have been looking at the "about to expire" loan requests to see if I can help some avoid expiration.

Sometimes I allow the location to influence me -- the poorer the country, the more likely I am to make a loan.