Through Kiva I’ve made 46 loans of which 20 have been paid back in full and 22 are active and payments are current.
I did experience my first defaults last month. Four loans through a field partner in Ecuador had to be written off. Important to note that the borrowers fully repaid the loans, but the field partner who administers the loans kept the funds and refused to forward them on to Kiva. Kiva terminated the relationship.
Here is how Kiva works.
From Ghana to Cambodia, Kiva approved micro-finance institutions (field partners) around the world go to Kiva.org and post photos and profiles of low income entrepreneurs in need of money for their businesses.
Lenders like myself go to Kiva.org and browse through profiles of these low-income entrepreneurs — a dairy farmer in Kenya, a man who wants to open a shoe shop in Honduras, or a tailor in Bulgaria. Lenders can then loan as little as $25 to the entrepreneur of their choice via PayPal.
When a loan is fully funded by individual lenders, Kiva pools the money and transfers it to the field partner who handles distribution and collection of loan payments.
Loan repayments made by the entrepreneur over the course of about 6-18 months are sent back to Kiva by the field partner. As funds are repaid, I can choose to withdraw my principal or re-loan it to another entrepreneur. I always re-loan the funds.