Kiva.org: Loans that Change Lives

I'm a former employee of Kiva, and worked for them for about 4 years full time before moving on. I have an intricate knowledge of both the microfinance industry and kiva in particular.
I have also personally made more than 3000 loans through the website, and have visited borrowers personally in the field.

I want to start by clearly saying that kiva is one of the most effective and dramatically successful non-profits I have ever seen. The amount of good done per dollar, and the number of lives touched is absolutely incredible.

I have also read some other negative reviews on this site from people who seem to be confused about some details about how kiva works, and there are three things I would like to help clarify.

1) People seem concerned that kiva has an operating budget north of 10 million a year. (This is what they are talking about in the "990"
It appears that they DON'T understand where that operating budget comes from. When you make a loan on kiva 100% of the money you loan goes to the person you loaned it to, and when they pay it back 100% of the money comes back to you (which you can withdraw I might add) Kiva's operating budget is made up of two sources: 1) There is an optional "tip" button attached to loans. It suggests a tip of 15% on the loan. In general about 5% of lenders make that tip. The tip money goes towards the operating budget, not to borrowers. The second source is direct donations from high net worth individuals and organizations, which they have earmarked directly for operating expenses.

2) People seem to be realizing that many of the folks getting loans through kiva still end up paying very high interest rates on those loans. (NOT to Kiva, but to 3rd party intermediaries)
This is true, real, and something of an obsession for the kiva employees and organization. In many of the places where organizations are making micro-loans the interest rates are, well, astronomical. In areas like these, kiva will work with a micro-loan partner that is already charging well below average rates in their area (usually a non-profit), and help them bring those rates even lower. This is often STILL a very high rate by standards in the financially developed west. The realities of infrastructure in many of these areas end up forcing interest rates much higher.

3) As is so often the case, people seem to be confusing money they lend on kiva, for money that they have given away. The money you lend _comes back_, and can be withdrawn back into your own bank account through paypal. This is really powerful because it means that you can put the money you are saving to work helping the world. I personally kept about 20% of my life savings loaned out on kiva for years (this is how I was able to make 3000 loans) and I feel it was one of the best "investment" choices I ever made.

I hope that these details help clear up some of the concerns I see floating around on the site here.

Am new here and feel and wish to learn of what Kiva does

I have made a total of 56 loans with Kiva over the last 4 years. My first glimmer of dissatisfaction came when I saw their tax returns and realized how much money was going to US-based employees. Another reviewer has provided details so I won't bother - but ouch! Then there are the usurious interest rates being charged to the borrowers. Again, other reviewers have provided details - and again, ouch!

And then there's the issue of loans that are in a de facto state of default (delinquent for more than a year) that are still being carried on the books as active in order to conceal the true percentage of bad loans. I currently have three such loans in my portfolio, and I would be happy to forgive these loans - my small portion, anyway - but Kiva seems to have no process for that.

In summary, Kiva may look like a great program at first blush, but a closer inspection suggests to me that they very likely creating more problems for disadvantaged people than they are solving.

I have been happily supporting Kiva for 5 or 6 years. I am somewhat amazed at the negative reviews below. But then, I believe that the internet has a lot of people who feel that being negative is not just their right, but their obligation.
A small donation on our part adds up to part of a life-changing loan for people who are REALLY in need. Granted, there are interest charges to help the banks which manage these loans operate the program. The borrowers don't seem to be complaining. These loans are probably their only option. I have had nothing but successful repayments over the years. Every month I donate. My money is still there. I can cash-out if I so desire.
Thanks to Kiva and the people there who probably work for much less than they could get in the open job market.

I needed help with my business as a new migrant to the US but Kiva wouldn't help me yet four doors down is a coffee shop that has a Kiva loan. the owner of the coffee shop on taraval avenue SAN FRANCISCO has two coffee shops plus a new restaurant plus both he and his wife drive new BMW each . They have a beautiful home.

Where do I sleep on the floor of my business! KIVA ONLY SUPPORTS LIARS!

Kiva is still a great organization, with lots of opportunities to make, and dreams to fulfill !
I still have a question:
I have referred a friend and 25$ were added to my account, in which I've lent it to the most needed.
My question is: when the loan is returned, will I be able to withdraw it to my account?

I'm looking at the form 990 from these clowns.

Year/ revenue / / salaries and benifits payed
2011 / 12mil / 5.5mil
2012 / 15mil / 7.25

so about half of the hard earned money you donate is going directly into their pockets.
Mr Flannery and about 20 of his croneys are making average more then 100k a year plus extra benefits. What doesn't go directly into their pockets goes to crooked international bankers
I know in your heart of hearts you want to help the people they seem to portray. Unfortunatly it looks like the main lives they want to change are there own.

After supporting two Kiva loans in South Sudan, I began thinking about the interest rate. Of course, the loans had been pre-disbursed, so I was supporting the Kiva field partner and not the borrowers. I didn't mind that. What I did mind was the staggering interest rate (61.5%).

Okay, so microloans are expensive to administer, but in 2011 the average worldwide was just 26.9%. [1] Take away the cost of capital (7.8%), which Kiva provides free, and you get 19.1%. This is what you might expect of a for-profit Kiva field partner, and the 61.5% now seemed extortionary. Also take away the profit (2.6%) and you get 16.5%, what you might expect of a non-profit Kiva field partner.

So, why does Kiva fail to crack the whip on the interest rates of loans that use the capital it provides for free? It surely has some leverage there. I have contacted Kiva, and was told they have no plans to address what to them I have contacted Kiva, and was told they have no plans to address what to them appears not to be an issue. This is unfortunate because high interest rates are one of the main reasons microloans haven't made much progress in alleviating poverty. I suspect that, like too many charities, Kiva is more interested in growing than in furthering its stated mission.

I am staying with Kiva for now, but will make the interest rate a top criterion in selecting the loans I support. There are plenty of reasonable field partners to choose from, in a variety of countries. Here are some: Cooperativa San José (Ecuador) 15.7%, FATEN (Palestine) 18.3%, WAGES (Togo) 18.5%, CIDRE (Bolivia) 18.8%, FPW (Vietnam) 23.1%, Soro Yiriwaso (Mali) 23.1%.

If you want to dig deeper, see [2,3].

[1] www.microfinancegateway.org/p/site/m/template.rc/1.26.23685/
[2] strom.wordpress.com/2009/11/09/kiva/
[3] blog.microfinancetransparency.com/what's-wrong-with-kivas-portfolio-yield-statistic/

I have been participating in Kiva loans as a lender for 4 years. The borrowers do pay interest to the local bank that manages the loan. As a Kiva lender my money, joined with the money of others, guarantees the loan, getting the banks to lend to the people. If not for Kiva, many of these borrowers would be dependent on loan sharks to fund their cyclical businesses or restock their inventory. And loan sharks not only charge a much higher interest rate, some even require the borrower sell their product to the shark at a barely profitable cost. Sure in a perfect world everyone could get loans with no interest and the bank would work for free to manage the loans but that's not going to happen. I like that Kiva helps people learn to budget their finances and grow their businesses. I don't have a lot to donate to charities. With Kiva, I usually get most or all of the money back (not counting my donation to the Kiva office) and I can then help someone else with the same money.

No business can survive with a 30% interest rate. This cannot be helpful, but instead is most likely a last resort that people make in dire circumstances.

As some have mentioned, most of the loans do have quite high interest rates. I wrote to Kiva about this and they explained that the cost of living increase in these countries can be very high (even 20-30%) and also these small finance companies also have to look after loans that don't get repaid. Often the only loans available to these people where they are have much, much higher loan rates and so in the big picture, Kiva's rates are not entirely unjustified. All in all, Kiva is providing access to loans which these people cannot get through the regular banks and most are finding it makes a great improvement in their lives. Also, there are some loans on the site which do not get disbursed to the "loanee" until the loan is fully funded. KIVA has a new site called KIVA ZIP where the loans must be fully funded BEFORE being disbursed to the "loanee". The Zidisha site, I think, is also a good option - where funds must be fully funded before being disbursed to the person needing the loan and the interest rates are much lower (between 0 and 12 approx.) but an additional 5% is paid in interest on top of the listed interest rate. The interest is paid to the person making the loan (i.e. me, you, anyone who goes on and makes a loan). It's an interesting one and, of course, one can make a little interest oneself while helping someone else in a far away land change their life. I don't think, however, we should be beating up on Kiva too much as they are, all in all, doing a good thing and are innovating all the time.

I was initially very enthusiastic about Kiva and about supporting them as a lender. The web site in particular is very well organised; it gives you a real sense of being able, with others, to directly help those in many developing and third-world countries. Similarly, the wide range of people seeking loans from Kiva means you can support people from across the World, in different continents, who are seeking to borrow for a host of different purposes. But I became increasing concerned about the high interest rates Kiva are charging - up to 30% - and the amount leaching out into administrative charges. The final straw came when I realised they also post applications for loans from people living in the USA. Now, I am sure there are very many poor people in the US, and that small business owners there may well have difficult in financing their enterprises. But I don't think this is where Kiva should be devoting its energy or resources.

So I have scaled back my involvement with Kiva and now mainly offer finance instead via Zidisha. They have a much smaller client base (focussed in Kenya) and the web site is much less sophisticated. But their admin charges are low and uniquely, I think, they allow the borrower to set the interest rate at what they can afford (sometimes even at 0%). I will still offer some loans through Kiva, but through gritted teeth and only where they appear to be the only micro-finance organisation operating in a country I am interested in.

Fantastic idea. But, they do need to reduce the interest rates for the people who are getting the loans. I will still keep lending, BUT KIVA must work with the third party lenders to reduce interest rates should be their CEO and board biggest goal for the future. Interest rates are, at an all time low, around the world, it's time for hard working poor people to able to receive some of the benefits of it.

When I first found Kiva I was amazed by what they were doing. I even donated all the Christmas money I had saved for my family to the to Kiva and had my family help me choose lenders. However, after doing a bit more research, I realized that some of the problems for the borrowers (high interest rates - they state the average for all their loans is 30%! ) are not alleviated through this platform. They have started a new platform to try and alleviate this problem (Kiva Zip) , but I really do not know how much the original site is HELPING those borrowing.... when they are paying 1/3 of their principal in interest! Other microfinancing non profits (I ran into zidisha.org yesterday for the first time) do a much better job at bringing down those rates, making the loans much more beneficial for the borrowers.

Kiva works with lenders to provide micro loans to people who would never have access otherwise. They connect donors and borrowers to help make a farm more productive in a poor area of the world, or help someone buy stock for a used clothing store. I truly believe they provide a stepping stone to independence in places where there are no other ways to change your life.

Not quite sure about Kiva any longer. Their idea was initially good and I'm sure they are still working tirelessly to benefit those living in impoverished areas. Yet due to their system (ie. middle-men) they loose over 1/3 of lenders money in credit interest and fees. They have been repeatedly criticized by GiveWell and even by Mohamad Yanus himself. They social impact is to be checked as they seems to focus much energy on the financial side. They ethics (see the animal-fighting loans and the LAPO stories) are also questionable.

I have been donating with Kiva for over two years now. Kiva makes the whole process very transparent. The best part is that when the loans are paid back, I simply reinvest the payments to another person's needs! A full account of your loan, donations, credits, is clearly posted on your account.

Kiva gives the donor choices - you can donate at random or choose a specific person/group of people to receive your donation in the form of a loan that is (hopefully) paid back and credited to your account. Most everyone can afford to donate since the minimum is only $25, and that money can be recycled to another borrower once the loan has been repaid. I can't think of a better system, and I would highly recommend Kiva!

I found out about Kiva off of Youtube and i haven't looked back. My goal is to have enough loans going that i can give out a loan every other week with the money comming back. With the free $25 i am not worried if someone cant pay me back 100%.

I just joined KIVA last night and made my first two donations. I'm absolutely thrilled. Not only was the whole process of micro-loans thoroughly explained and easy to understand, it was so encouraging to see the progress they've made through the statistics and data. The website is extremely easy to navigate and very straightforward. Payment was simple. And they provide you with a profile page to keep you updated on the progress of the loans you've contributed to. It's an excellent organization, and I will gladly contribute for many more years.

What an outstanding organization that supports the poor around the world in their attempts to get a start economically. The money virtually all comes back and you get to loan it out again, and you get to see who is borrowing your money. It's just superb.

A simple way to give, and keep on giving, while easily being able to track where your money is going and how much good is being done.

We've been doing loans through Kiva for years and they're wonderful!

I have been a Kiva donor since 2007. I have made over 300 x $25 loans to many countries including the US because Kiva has made it easy to do. When the money is paid back, I can re-loan it again. I add money to my account each year and that allows me to increase my lending capacity - what a great concept!!

I love loaning through Kiva. The website is easy to use and I can monitor the people to whom I have loaned quite easily. Loan repayments are made promptly so that I can reloan the money. I enjoy donating money to worthwhile charities; Kiva is currently my favorite by far. The groups of likeminded people that you can join if you wish allow you to connect with other lenders from around the world. This organization and its easy to use website are absolutely outstanding.

I've been working with Kiva and affiliate organizations, and they get the job done, helping build small business and create jobs. (I figure creating a job is one of the best things a person can do for another.) Specifically, I've made contributions including the West Bank and Detroit, that helps people out, and my loans are getting paid off quite well.

Kiva is an extremely effective charity program. So far I've actually donated $400, but it has made an impact of over $700. The program helps build up communities in the impoverished communities, it fosters self-reliance and independence. I truly believe this charity can make a difference. You can see the results in the unbelievably high return rates for the loans; also, actual donations to the administration are completely optional. I would recommend donating to this charity.

I have been a Kiva lender for over three and a half years and have personally met several of the principals involved with that organization and have visited their HQ in San Francisco. This 5+ year old organization whose 600,000+ lenders have loaned out more than $ 231,000,000. to over poor entrepreneurs in 59 countrys (through 135 field partners) has 450 volunteers throughout the world.

The Kiva format used uniquely allows the lender and the borrower to communicate through the Kiva website (with text, pictures and video) and is completely transparent in all phases of the operation. I have even met one of the borrowers (Kiva includes the US as one of its lending countrys).

The cumulative payback rate to date is an amazing 98.8%.

Also Kiva takes no 'cut' of the transaction and the loan is accomplished with no transaction fee. (The transaction is provided thru Paypal at no charge!) Kiva's operation is financed primarily through donations and some grants.

It is one of the best organizations that I have ever been involved with in my 71+ years.

Visit the site www.kiva.org and you'll be happy that you did.

I really like Kiva, for three reasons. First, I love how each $25 keeps on giving (so far at any rate - I run two loans at any one time and they have all been repaid so far). Second, it's a great way to get my teenaged boys thinking beyond suburban USA - I have encouraged each of them to put some of their own pocket-money or wages into Kiva, which they have willingly done, and I have enjoyed watching them take an interest in living conditions in other countries less fortunate than theirs. Third, Kiva seems to be extremely well run, with an easy-to-use website, and a high proportion of income applied to the core mission.

I entered the Kiva waters slowly, first with just $25 to see if it actually would give my money back, I used it as an experiment and fully expected it may just disappear. After things all were getting repaid, I kept moving more in. With a few thousand in, carefully chosen partners and repayment terms, I'm now over $28K lent with more than 1000 loans and have not lost any money! I wrote a website that used Kiva's API to access their data to help me choose my loans more easily and eventually ended up applying, getting hired and moving to SF to work in Kiva's office. The employees all have a lot of passion about the work Kiva does, and so much more investigation, research, measurements, etc happens with each partner than I ever had any idea of when I was just a lender. It's not just a great movement to be part of as a lender, but also a fantastic place to work!

Kiva has been very prompt in alerting me to unused gift certificates and refunding them on request. Also prompt in informing me of loans that have been repaid and loans that were rescinded.

I love Kiva! It only takes $25 to make a difference in someone's life! I have actually sent Kiva loans to all my friends for christmas presents :)

Kiva is a wonderful nonprofit. Not only is it built on a great idea, but the staff and volunteers are so deeply passionate and determined to make a difference. The idea is sustainable and making a huge impact in communities around the world. I am proud to be part of this community as a lender and volunteer

Kiva is always keeping me updated on the latest projects being funded and how the businesses I have loaned to are doing. It is very rewarding to hear the stories that come from families who benefit from the loans.

Kiva's online platform allows you to make a microloan to entrepreneurs from around the world, ranging from a goat herder in Kenya to a seamstress in Peru. It is a great way to connect with the world's poor to contribute to a sustainable to alleviate poverty -- check out www.kiva.org!

Kiva.org is a wonderful organization that has really been revolutionary in the field of microfinance by allowing someone to lift an entrepreneur in the developing world out of poverty with as small as $25. My experience has been very positive because the website allows me to connect with an entrepreneur of my choice and establish a connection which is blurred between the lines of a personal/business relationship. At the end of the day Kiva is perfect as I can help someone who is facing the conditions of global poverty and at the same time get my money back over 98% of the time.