Talk:Kiva (organization)

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[edit] Notability

I'm removing the {{notability}} tag. The actual website might not be notable, but the article (despite the title) is about the organization, not just the website. As an organisation, I think it's notable enough and it has had a lot of recent media coverage [1]. Angela. 11:06, 11 September 2006 (UTC)

I'd suggest adding the most significant coverage to this article as sources. As it is, this page likely qualifies for the sources template. Erechtheus 17:24, 11 September 2006 (UTC)

[edit] Disambiguation

searching for "kiva" goes straight to a page about Puebloan shelters; there's no link to a disambiguination page where someone could find kiva.org. I don't know how to make this happen but someone should....—Preceding unsigned comment added by 67.185.37.97 (talk • contribs)

Thanks for the heads-up, I've gone ahead and added a notice to the front of the Kiva article. -Elmer Clark 21:15, 12 September 2006 (UTC)

[edit] Interest rates

Has anyone been able to uncover information that details the kind of interest rates that the microlenders charge the entrepreneurs who borrow the money? Kiva says they only work with microlenders that charge 'fair rates' but that's a pretty open-ended statement. I'd like to see just what constitutes 'fair'. Cody M Wilson 12:16 06 February 2007 (UTC)

  • As of today, the average interest rate by all Kiva lenders is 14%. That might sound high, but in the world of micro-lending it actually is fair. Factors that influence the interest rate are the local interest rate, local prevailing commercial rates and the high cost of administration of the loans. These rates are typically from half to a third of what local lenders would charge ... if they can even get a loan. There are a number of good books about micro-credit, one with many statistics and references is A Billion Bootstraps by Phil Smith and Eric Thurman (ISBN 0-07-148997-5) Brian 09:59, 17 June 2007 (UTC)btball
  • I've just taken a look at the Kiva site and they are reporting interest rates according to the following formula: "The self reported average, annualized, flat interest rate in real terms charged by the Field Partner to the enterpreneur." Reporting interest rates on a 'flat' basis can be confusing. 'Flat' simply means that interest is charged on the amount the client borrows at the beginning, not the effective amount he has access to over the period of the loan. For example, if Sophea borrows $100 at 10% flat for exactly one year, she will pay $10 in interest. In the west we are accustomed to hearing interest rates reported on a declining balance basis. If Sophea pays $10 in interest on a declining balance loan of $100 over 1 year in the United States, the interest will be cited at 18% per annum. This 18% reflects the effective rate she paid on the money she actually had available. 'Flat' calculations always understate the true interest rate. Generally the flat rate of a loan is about 50-60% of the effective rate. The average rate for all Kiva partners (reported by Kiva on a flat basis) is 19%, suggesting an effective (declining balance) rate of about 32-36% a year.
  • I also happen to know Cambodia well, and the borrowers for one Kiva partner (CREDIT) are listed as paying an average of 11% per annum. CREDIT's financial statements are available on the MIX market, and for 2005 CREDIT earned $804,000 on a microloan portfolio that averaged $2,492,000 during the year. This works out a 32% yield per year, not counting losses resulting from late payments or write-offs. Most Cambodian MFIs charge between 3-4% a month on a declining balance basis and are very open about it. CREDIT I believe charges 3% (36% per annum) which is a good interest rate by local standards and would be consistent with this portfolio yield calculation.
  • Personally, I have no objections to such interest rates. The alternatives these borrowers face are generally far worse. Flat rate calculations may be illegal in many countries, but they are very practical as well. Record-keeping is far easier using flat rates and as long as the process is used consistently and not in a way that is intended to mislead, there seems little harm in it.
  • But if I were lending through Kiva, I would be a little disgusted to learn that Kiva was telling me my borrower was paying 12% a year, when in fact she was paying 30%. It seems we don't just need 'truth in lending' laws for consumer banks in the US. We need them for microcredit operators, too. In the meantime, for any Kiva borrower who wants to know, they should go to the MIX market and calculate the portfolio yield of the MFI they are lending through from their last financial statements. What they learn may surprise them.Brett epic 16:54, 18 August 2007 (UTC)

Brett, all good points. When I read Kiva's definition of interest rates, "The self reported average, annualized, flat interest rate in real terms charged by the Field Partner to the enterpreneur," I really don't have a clue how the rates actually are calculated. It alludes to several types of calculations (e.g., average, annualized, flat, real) without ever defining how they are calculated individually or collectively. Also, only slightly more than a third of the Kiva MFIs are listed at the MIX Market (http://www.kivapedia.org/index.php/Main_Page/MFIs) so your suggested remedy won't work all that often. Can you point to a "generally accepted accounting practice" or whatever it should be called for how MFIs calculate and report loan interest rates? RichardF 03:26, 19 August 2007 (UTC)

Based on our user talk pages discussions, I think the following paper with quoted section at least helps focus the interest rate calculation issue. CGAP. "Microcredit Interest Rates," Occasional Paper No. 1, August 1996.
"ALTERNATIVE 4 — Flat Interest: Same as Base Case, except that “flat” interest is calculated on the entire loan amount, rather than on declining balances, and is prorated over the four monthly payments.
"Compute Cash Flows: Total interest is 120 [1000 x 3% x 4 mos.]. Total principal plus interest is 1120 [1000 + 120], or 280 each month [1120 ¸ 4].
"Compute Effective Interest Rate: PV = 1000; PMT = -280; n = 4. Solving for i yields an effective monthly rate of 4.69%, which is multiplied by 12 for an APR of 56.3%." (page 6) RichardF 04:21, 19 August 2007 (UTC)

I am thinking about investing in Kiva soon. One other thing to consider is that the borrowers are using the money to make more money, not for consumer goods for themselves. For instance a potential borrower I saw on their site wanted the money to buy yams which she would sell at her vegetable stand. Say she sold them in a week and made a 10% profit, which she reinvested in the next weeks yam supply. If I loaned her $500 she would have $550 in one week, $605 after two weeks and so on. An interest rate of 30% ($150) for the year doesn't look so bad. Steve Dufour 21:59, 2 December 2007 (UTC)

[edit] Payback rate

I'm changing the historical payback rate of 100% into "almost" 100%; Kiva currently has a 0.35% default rate. @Cody M Wilson: the Kiva.org website now keeps running statistics about many things, including interest rates. Ramonk 03:00, 8 June 2007 (UTC) 23:00 EDT, 07-Jun-07

Also it should be mentioned that there are many definitions of payback rate, some with a potential to reach a rate of over 100%. Which one is used here?--Asdirk (talk) 10:16, 20 February 2008 (UTC)

[edit] Notability - second time

First, sorry for the error in my edit summary when tagging the article with {{notability}}, it does contain one reference not linking to kiva. Still, the concern is the same. I'd like to see some independent references for this article. --Dirk Beetstra T C 15:34, 3 August 2007 (UTC)

I counted almost 40 stories on Kiva's press page. They're also big enough to have an Alexa traffic ranking. Feel free to add more references. RichardF 16:01, 3 August 2007 (UTC)

I believe the MIX Market reference I added establishes Kiva's notably quite clearly. I won't remove it, but I see no need for the notability tag here. RichardF 16:28, 3 August 2007 (UTC)

The tag has been removed. This issue should be settled for good now. RichardF 22:10, 4 August 2007 (UTC)

I think it's clearly notable enough, and this is demonstrated in the article's references. Note that this is about sources/references rather than traffic estimates (e.g. Alexa). See Wikipedia:Notability (web)#Criteria for more. Cheers --Chriswaterguy talk 04:15, 9 August 2007 (UTC)


[edit] Meaning of "Kiva"

I'm being bold and removing the extraneous comment that "Kiva" translates as "nice" in Finnish for mainly two reasons. 1) According to the FAQ on www.kiva.org, the name is taken from Swahili for "agreement" or "unity", so the incidental existence of the Finnish homonym is irrelevant to the intended meaning of the name. 2) The comment was, in any case, out of place. Should we include the FAQ's explanation of the meaning of the name? If so, let's find an appropriate placement for it in the article. Wilhelm meis 02:21, 22 September 2007 (UTC)

That's a good idea removing that. The French translation is irrelevant to the article. I think the Swahili meaning should be included in the article as this was the inspiration for the organisation's name, but I don't think anything more is necessary. 1manfern (talk) 13:21, 8 December 2007 (UTC)

[edit] Muhammad Yunus

I think this article should have at least a brief mention of Muhammad Yunus and his influence on all organizations of this type. --Hamsterlopithecus (talk) 02:15, 3 January 2008 (UTC)

Does he have anything to do with Kiva specifically? He's discussed in the microcredit article, and the Kiva article links to that. --Sushi Tax (talk) 01:42, 4 January 2008 (UTC)

[edit] Minor pointers

  1. Too many instances of bullet points, avoid that, focus on a paragraph format.
  2. Add cites to the places where there are fact needed tags, or just remove that unsourced info altogether.
  3. Try to build some good sources, and list them in a "Further reading" section if they are not (yet) used in the article text.

Cirt (talk) 03:05, 7 January 2008 (UTC).

[edit] Low Importance?!

Rated Low importance by the bay area project?! Whats with that?

[edit] Organizations similar to Kiva?

What organizations offer a way for the public to support microlending similar to Kiva.org? Can we cross-reference them in this article? I don't qualify for a PayPal account, I don't have a credit card, and Kiva refuses loan funds by check of less than $1,000 plus 5-10% donation (my offer of $100 to lend plus $50 donation by money order was ignored and then refused). I'll refrain from complaining about their policy, but I'd like to find another channel by which I can choose borrowers whose individual efforts I'd like to support. Can any be cross-referenced here? Nick Levinson (talk) 21:05, 4 May 2008 (UTC)