Wednesday, September 17, 2008

Having a hard time making a loan?

If you're like most Kiva Lenders, you've been coming back to the website most days to watch this phenomenon of an "empty site" which has been taking place over the past 10 days.

If you're not sure what's going on, then you probably didn't receive this month's newsletter, or read Roma's previous blogs about Partial Loan Repayments (scroll down the page to catch up on what's been happening around here.)

Since we launched Partial Loan Repayments - essentially giving lenders access to their loan money as it is repaid, rather than waiting until the whole loan has been repaid - Kiva Lenders have been turning that money right back around and lending it to another entrepreneur.

The effect on the website is that loans are being funded more quickly than usual, and at a pace faster than our Field Partners are posting up their new funding needs.

The important thing to know is that every Field Partner (we have 89 current Field Partners) has a monthly "Fundraising Limit". This is the amount which we allow the Field Partner to "fundraise" in any given month. This number is determined by the past and ongoing due diligence we conduct, which includes looking at their current portfolio size, their current resources, their ability and desire to expand, their current debt capital sources alternative to Kiva, their human resources etc. This ensure that we are finding a funding limit which is comfortable to both the Field Partner and Kiva, so that we have a stable partnership and the Field Partner's operations are both predictable and stable.

So, if the total loans our Field Partners are fundraising, is less than the total loan funds coming in from YOU, then we see the phenomenon which is taking place right now.

Of course, our Field Partners right now are ecstatic as they're watching the loans fly off the site! We have one Field Partner who at times had taken the whole month for their monthly total to be completely fundraised, who has recently seen their entire month's worth of loans raised in just one week, and it really sends a strong message around the world that lenders are here to offer continued support to entrepreneurs. There could not be a more positive message to our Field Partners than to see Kiva Lenders rushing to grab each loan as soon as it is posted!

We're not sure when things will balance out, because it really all depends on the growth of the Kiva Lender community, and to be honest the Kiva office really buzzes when we see this happening.

We're watching it closely, and we hope you are too! This is the result of creating a website that allows us to see activity in real-time, to watch loans get funded by real people as the funds are sent, to watch new loans posted by microfinance staff around the world and to now get repayments back as they are received.

What we do know is that there are 89 microfinance institutions around the world that hear your roar of support - and that is no small feat.

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