Hi Jami,
Like this post of yours, you don't just have an opinion on this, you have actually experienced this first hand with Kiva.
I have a bit of a pre-layer question for you though. What made you motivated to invest in remotely located businesses through an intermediary like KIVA? What are the psychological and practical motivations that work to make such an investment decision? How is that different from sponsoring a child or a family located remotely? Does the idea that this investment is creating profitable businesses is more (or differently) appealing than sponsoring a child/ family? Is it more appealing because this idea is built on more business principles rather than charity principles? when you write-off, who really gains (I think you are asking this question as well) and who gets that charity?
will look forward to hear your thoughts, and how, at a system level, we understand and analyze the model such as KIVA.
anuj
From: MicrofinancePractice@yahoogroups.com [mailto:MicrofinancePractice@yahoogroups.com]
Sent: Wednesday, July 09, 2014 4:08 PM
To: MicrofinancePractice@yahoogroups.com
Subject: [MFP] interesting side note on Kiva defaults
Hi All,
Thought you'd find this interesting: about seven years ago I invested in 17 Kiva micro entrepreneurs from different countries.
My success rate in selecting winning micro entrepreneurs over the years has been less than stellar -- with 17% of my loans defaulting. (The average default rate across the board on Kiva is about 1%! per Kiva's own stats).
Just looking at the stats now in retrospect is quite interesting because amongst 'my borrowers,' who defaulted, one was an American client of Accion East who needed about $5,000 for a restaurant venture (I should have known better bc so many restaurants fail, but alas I was drawn in).
Defaulting clients 2 & 3 were Peruvian with EDPYME Alternativa and Manuela Ramos/CrediMujer; and 2 other defaulters were Kenyan borrowers both with Ebony (I think these women defaulted during the political crisis so in my mind are excused).
I'd love to know if Kiva inquires with their partners about the MFI default/collection policies and when if ever debts can be forgiven.
My concern is that if I as the point of origin of the loan am obliged to 'write off,' and no longer collect on these debts, then the MFIs should be doing the same, right?
Any practitioner thoughts on this?
Best,
Jami Solli
Posted by: Anuj Jain <ajain@stfx.ca>
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