Experience with Kiva or the like?

Drolefille · #1 10-10-2010, 12:25 PM

Has anyone had experience lending money through Kiva, United Prosperity, Wokai or any similar site?

Each seem to work slightly differently, but I'm just looking for feedback from someone who's been on the lending side.

Looking at Wokai, it appears its a 'donation' and cannot be 'cashed out' which is fine by me I'm not really looking to make money here.

DTD Alum · #2 10-10-2010, 12:31 PM

I've only used Kiva, but I've been using it for about a year and a half now...it is fantastic! I highly recommend it to anybody. Probably made about 10 or so loans, all of which have been repaid in full. You can cash out with Kiva, but I generally just use the money to make another loan. Plus I feel they do a really good job of telling you the story of the borrowers, and about half of the lenders have sent me a couple follow up e-mails to tell me how they are using the money and how things are going.

Tulip86 · #3 10-10-2010, 03:09 PM

I used Kiva as well. They aren't as efficient (as in what % actually reaches the people you choose) as some others, but they are very reliable.
I would recommend them!

lovelyivy84 · #4 10-12-2010, 10:40 PM

Have you checked charitynavigator for ratings on each company? I'm a big fan of their ratings system, and when I was looking for a gig it was a great help in avoiding some of the more dysfunctional non-profits I could be working at.

Drolefille · #5 10-12-2010, 10:44 PM

Quote:

Originally Posted by lovelyivy84

Have you checked charitynavigator for ratings on each company? I'm a big fan of their ratings system, and when I was looking for a gig it was a great help in avoiding some of the more dysfunctional non-profits I could be working at.

I have for some other things, but Charity Navigator doesn't appear to track the micro lending sites either because of how they work or their age, I don't recall atm.

lovelyivy84 · #6 10-12-2010, 10:53 PM

Quote:

Originally Posted by Drolefille

I have for some other things, but Charity Navigator doesn't appear to track the micro lending sites either because of how they work or their age, I don't recall atm.

That's unfortunate, but not too surprising. Kiva has a good reputation, although they have had a little trouble recently for not being 100% open about their loan policies. I was afraid it would sink them, but the bad publicity appears to have not been as bad as feared.

The microlending org I like is Grameen, unfortunately they don't do any real fundraising anymore (they did make a start two years ago, but due to some turmoil and turnover didn't really continue). Yunnus is the man, lol.

ETA: The Grameen foundation does raise funds, but not like Kiva does. Completely different structure- I wish they did do that at Grameen!

Drolefille · #7 10-12-2010, 10:59 PM

Quote:

Originally Posted by lovelyivy84

That's unfortunate, but not too surprising. Kiva has a good reputation, although they have had a little trouble recently for not being 100% open about their loan policies. I was afraid it would sink them, but the bad publicity appears to have not been as bad as feared.

The microlending org I like is Grameen, unfortunately they don't do any real fundraising anymore (they did make a start two years ago, but due to some turmoil and turnover didn't really continue). Yunnus is the man, lol.

ETA: The Grameen foundation does raise funds, but not like Kiva does. Completely different structure- I wish they did do that at Grameen!

Yeah honestly Kiva's process doesn't bother me, I think it bugs some people that "their money" isn't going to the recipients, but instead reimbursing/guaranteeing the partner company. The effect is the same either way and this gets money to people faster.

I'll have to look into Grameen

ForeverRoses · #8 10-13-2010, 09:31 AM

I just made my 20th Kiva loan last week. I haven't had any default, but I had one slow to repay- so I figure my odds are pretty good. I have yet to cash out anything, I just keep reinvesting.

on a side note, For Christmas last year my brother gave all the nieces & nephews $25 Kiva gift certificates. My oldest son (he's 8) and I went online to pick which loan he wanted to make. We told him he could cash out after the first loan was repaid, however he decided to reinvest it in his second loan- he checks the status of his loans more than I do and has even slipped his loan recipients into his bedtime prayers.

DubaiSis · #9 10-13-2010, 09:48 AM

For true microlending you'd have to physically be there, so anything that is a good compromise between bureaucracy and actual money in the hands of the people who use it is good. I heard Bill Clinton speak about Kiva. The most interesting thing (I thought) about what he said is the women recipients never default. The men.... not so much. I still haven't gotten into Kiva, but I think I will because it seems like a fantastic program, even if there are lost administrative costs.

I think you've motivated me! If I can get my work done today I think I'll head there and do some research.

Kevin · #10 10-13-2010, 10:44 AM

It seems like a fairly shady deal. From what I've found in research, these microlending banks charge ricockulous interest rates on these loans and keep it all. A donor takes all the risk and they get all the profit. I know it's a charity thing, but why not just give directly to charity?

Drolefille · #11 10-13-2010, 11:04 AM

Quote:

Originally Posted by Kevin

It seems like a fairly shady deal. From what I've found in research, these microlending banks charge ricockulous interest rates on these loans and keep it all. A donor takes all the risk and they get all the profit. I know it's a charity thing, but why not just give directly to charity?

There's value in 'teaching a man to fish' rather than 'giving a man a fish'

lovelyivy84 · #12 10-13-2010, 11:18 AM

Quote:

Originally Posted by Kevin

It seems like a fairly shady deal. From what I've found in research, these microlending banks charge ricockulous interest rates on these loans and keep it all. A donor takes all the risk and they get all the profit. I know it's a charity thing, but why not just give directly to charity?

There are many microlending orgs that try really hard to prevent this I know of one or two (not Kiva) that actually form recipient communities and provide education in business and even healthcare to loan recipients and their kids. There are some truly great programs out there.

Kevin · #13 10-13-2010, 11:19 AM

Quote:

Originally Posted by Drolefille

There's value in 'teaching a man to fish' rather than 'giving a man a fish'

So donate to the fishing school in Côte d'Ivoire rather than to some iffy bank that's charging as much as 80% interest (as one particular bank does in the Democratic Republic of Congo).

MysticCat · #14 10-13-2010, 11:20 AM

Quote:

Originally Posted by Drolefille

There's value in 'teaching a man to fish' rather than 'giving a man a fish'

But there are many organizations that one can just give to that "teach a man to fish" rather than just giving handouts.

I'd actually not heard of Kiva or these other groups until this thread.

Drolefille · #15 10-13-2010, 05:31 PM

Quote:

Originally Posted by Kevin

So donate to the fishing school in Côte d'Ivoire rather than to some iffy bank that's charging as much as 80% interest (as one particular bank does in the Democratic Republic of Congo).

Quote:

Originally Posted by MysticCat

But there are many organizations that one can just give to that "teach a man to fish" rather than just giving handouts.

I'd actually not heard of Kiva or these other groups until this thread.

Very true, the premise of Kiva is that people are building credit as well as building income and a business for themselves. Kiva provides the backing for loans from partner banks in the local areas, the money you lend/donate is simply financing Kiva's backing.

Having that backing means the partner banks will make the loans where they might not have had the funding before nor the trust to loan $500 to someone for a sewing machine/equipment.

There are some high interest rates involved, and I've looked into it. It appears that because the loan is so small the 'fees' are a much bigger portion of the loan. Since the banks do have to administer the loans it makes sense for them to charge fees, but yeah. I'm not a 100% on it, but I don't think it's a scam or a ripoff for the recipients.

I believe that Kiva does not charge interest on the money it lends, but the local partners do.

In short, or long, Kiva addresses the issue and requires partners to disclose interest rates and fees. The user can make the choice about lending from there. Kiva believes it encourages accountability and responsibility, and 98%+ repayment rates they seem to be right.