Kiva update – February 2019
I love using Kiva. Its my favorite way of making charitable giving. Kiva lending allows me to control who I lend to much more directly than simply giving my money to a charity. This is the update of my current Kiva portfolio.
For those of you who don’t know what Kiva is, it’s a not for profit that aggregates various charities around the world that engage in micro-loans. I, as the lender, deposit money with Kiva and I then select who I want lend to. Each borrower has a profile including use of the loan, repayment schedules and information about the lending organisation. The borrower is charged interest on their loan, but I receive no interest. Hence my “cost” is interest foregone.
A micro-loan is a very small loan made to people who could otherwise not access traditional financial services. For example, woman in developing countries. It allows them to purchase, say, seed for crops which they can then on-sell at markets. The interesting thing about micro loans is that while they charge interest just like a normal loan, they have a much lower default rate than traditional lending. Borrowers are more likely to repay a loan by working hard and building their businesses. Critically, it works better than giving charity.
I take a portfolio approach to my Kiva lending. Like my stock portfolio, every month I review who I have lent money to, whether they are repaying on time and whether there is any updates.
Activity in February
My current portfolio has dwindled a little bit over the past few months and is currently in the rebuilding phase. Lots of loan repayments and not much in the way of new lending. That is going to change in 2019 as I will reinvigorate my lending efforts. During February I received just over $2.20 in loan repayments and made three new loans of $25 each. This takes my current portfolio to 3 loans paying back and 1 fund raising. I aim to increase my lending by $50 per month, split over 2 loans for the foreseeable future.
At the moment, the repayment schedule of loans looks like this.
I wanted to highlight the following loan I made this month. As I mentioned last month, my philosophy when looking for loans is to back men and woman who want to expand their businesses. This woman in India, runs a dairy business. The loan will help allow her to expand her business and buy fodder.
Set out below is her story.
Lilaben is a 38-year-old woman living in Dahod district of Gujarat. She has a household of three members and a monthly household income of INR 14,500. She runs a dairy business. She rears cows and sells cow milk and milk products like ghee, butter, buttermilk, curd etc. in her area. She wants to expand her business to increase her monthly savings. For this, she has applied for a loan of INR 30,000 from Prayas, one of Milaap’s field partners. She will use the amount to buy a cow and cow fodder. She and her family will be grateful to their lenders.https://www.kiva.org/lend/1703552
The loan is for 15 months, with the possibility of currency loss.
Till next month – HAPPY LENDING!