Energia Innovadora is a Peruvian small business founded in Arequipa in 2003. Marcelo is the General Manager of business. Energia Innovadora focuses on the maximum use of energy efficient power generation solutions. Recently, we have added the Barefoot Power line of products to our current range of solar home systems, small wind power systems and solar water heaters.
Energia Innovadora SAC will use the Kiva loan funds to scale up distribution of clean energy products, specifically for the purchase of Barefoot Power systems.
The main barrier to growing our small business is access to affordable working capital finance. When working on government projects or with branch retail networks, often our customers ask us for extended repayment (for example, 90 days after receiving the products). This means that we not only have our working capital tied up while the products are being shipped to us, which can take up to two months, but also we have to wait for our customers to repay us. Without a loan, we could be facing a supply gap during this long time. A loan from Kiva will help us provide a steady supply of Barefoot Power products to our customers and the people of Peru.
Additionally the Kiva loan will allow us to maintain a reasonable price for the products.
We chose Barefoot Power because they offer high-quality and affordable small solar products. The range of products is great for our local markets in Peru because they offer bright lights and bring much-loved entertainment to Peruvians by way of charging phones and radios at good price points.
Previously, we had to buy components for our solar home systems from multiple suppliers. It is much more convenient to just work with one supplier and a solution well assembled and packed in a box.
Our favourite part of working with Barefoot Power is the reliability of their products, the quality of the designs, the ease of use of the products and the R&D that clearly they place in enhancing the products. I have compared the products to similar ones, not only in pictures and tech sheets, but also life comparisons and I can tell the difference almost at a glance.
Solar power is an efficient (economic + reliable) way to access to a better life standard for people in the rural areas of Peru and also to have a safe product in case of earthquakes or other natural disasters for people in the urban areas of Peru. Solar energy plus a good solar energy product equals to us the best solution for people today.
We expect that Barefoot Power products will bring clean energy within the reach of many Peruvians who right now rely on kerosene (very scarce product) and candles (becomes expensive candle after candle) to light their homes, and walk long distances to charge their phones. This will make homes safer by reducing the risk of fires and burns, improve indoor air quality among rural households, and reduce carbon emissions. An example of how light improves safety: in Castilla district, Piura, a man died because he went out at night to the bathroom and a snake bit him because he could not see it. Using an LED lamp could have saved his life.
Dedicated to our mission, we hope to reach as many homes as possible through different channels: NGOs, hardware stores chains, Rural credit institutions, municipal governments and independent distributors.
We hope that the government understands that the job is not only to give the solar products to the people, but to give them simple products with long life and very low cost of maintenance. Barefoot Power systems are one of the best ways to accomplish the task while saving the government (tax payers) a lot of money.
We look forward to further development of renewable energy technologies in hope that the research brings better products day after day.
Adding to basket
Funded
Total loan: $50,000
Powered by 1446 lenders
Energia Innovadora
Arequipa, Peru / Renewable Energy Products
A loan helped to buy and sell Barefoot Power's Solar Lighting Products.
Energia Innovadora's story
More about this loan
About Barefoot Power:
Because Barefoot Power?s core business is not microfinance, there is some level of additional risk for lenders. Kiva?s partnership with the company is unique and unprecedented. For this reason, Kiva has not assigned the organization a risk rating.
Barefoot Power is a for-profit social enterprise dedicated to bringing solar lighting solutions to remote, low-income regions. The company offers Kiva-funded loans to its distributors and retailers to buy supplies, open stores, and sell high-quality, affordable lighting products to consumers in underserved communities. Access to renewable lighting reduces use of pricey, dangerous kerosene, and significantly improves household productivity and income potential.
Loan details
Loan length:
14 months
Repayment schedule:
Irregularly
Disbursed date:
May 21, 2014
Funding model:
Fixed
Facilitated by Lending Partner:
Barefoot Power
Repayment schedule
A loan's repayment schedule describes the frequency with which repayments are sent to Kiva lenders:
Monthly: One repayment made per month
End of term: One repayment made at the end of the loan term
Irregular: Any other repayment schedule
To see a detailed repayment schedule for a specific loan, click the "Repayment schedule" link on the loan profile under "Loan details."
What is the disbursed date?
The disbursed date indicates the date that the borrower receives their loan funds. Loan disbursal for loans on Kiva can happen anywhere from 30 days before to 90 days after the loan is posted on the Kiva website. Direct loans are always post-disbursed, and will be done only after the loan has fully fundraised on Kiva.
In the case of partner loans, many of our Lending Partners choose to disburse loan funds before the loan request is posted on Kiva. We allow pre-disbursal because it ensures that the funds reach the borrower as soon as they are needed. Loan funds from Kiva lenders then go to backfill that amount and as a lender you assume the risk of the loan. By doing this, our Lending Partners assume the risk that, if the loan isn't funded by lenders, they will have to fund the loan without any funds from Kiva.
If a partner loan is not pre-disbursed, it will be listed on Kiva with an expected "post-disbursed" date. If a post-disbursed loan is not funded on Kiva, there is a chance that the borrower may not receive their loan. Some Lending Partners choose to disburse loans with other sources of funding, while other partners don't have the resources available to fund loans without Kiva lenders' support. No direct loans will be disbursed unless they fully fundraise on Kiva.
In the case of partner loans, many of our Lending Partners choose to disburse loan funds before the loan request is posted on Kiva. We allow pre-disbursal because it ensures that the funds reach the borrower as soon as they are needed. Loan funds from Kiva lenders then go to backfill that amount and as a lender you assume the risk of the loan. By doing this, our Lending Partners assume the risk that, if the loan isn't funded by lenders, they will have to fund the loan without any funds from Kiva.
If a partner loan is not pre-disbursed, it will be listed on Kiva with an expected "post-disbursed" date. If a post-disbursed loan is not funded on Kiva, there is a chance that the borrower may not receive their loan. Some Lending Partners choose to disburse loans with other sources of funding, while other partners don't have the resources available to fund loans without Kiva lenders' support. No direct loans will be disbursed unless they fully fundraise on Kiva.
Funding model
Every loan has only 30 days to fundraise on Kiva. There are 2 different options for how that funding is sent to the field:
Fixed: the total loan amount must be raised in order for funds to be sent to the Lending Partner. If the loan is not funded in full within the fundraising period, the loan will expire and any funds raised will be returned to lenders' Kiva accounts.
Flexible: any funds raised within 30 days will be passed along to the Lending Partner facilitating the loan and they will come up with other sources of funding to cover the rest of the loan amount.
What does "Partner covers currency loss" mean & how could it affect my Kiva loans?
When lending internationally, the local currency in a borrower's country may lose some of its value compared to the US dollar -- requiring the partner to use more of its local currency to repay Kiva in USD. We offer some Lending Partners the option to protect themselves against currency fluctuations by choosing to pass on these losses to Kiva lenders. By bearing this risk, lenders protect the partner and its borrowers from catastrophic currency devaluations and contribute to the sustainability of their operations.
Potential for currency exchange loss is noted on every loan profile under the loan details:
"Yes" means the Lending Partner will cover any currency loss. Lenders will not bear losses due to currency fluctuation
"Partial" means that the Lending Partner has opted to cover losses only up to 10%. If the U.S. dollar appreciates more than 10% against the local currency, those losses will be passed onto lenders.
"No" means that the Lending Partner is not covering any currency losses and all losses will be passed onto lenders.
"N/A" means the Lending Partner disburses loans to borrowers in USD so their loans are not subject to any currency fluctuation.
Potential for currency exchange loss is noted on every loan profile under the loan details:
"Yes" means the Lending Partner will cover any currency loss. Lenders will not bear losses due to currency fluctuation
"Partial" means that the Lending Partner has opted to cover losses only up to 10%. If the U.S. dollar appreciates more than 10% against the local currency, those losses will be passed onto lenders.
"No" means that the Lending Partner is not covering any currency losses and all losses will be passed onto lenders.
"N/A" means the Lending Partner disburses loans to borrowers in USD so their loans are not subject to any currency fluctuation.
Do Kiva borrowers pay any interest on their loans?
Yes, most Kiva borrowers do pay interest to our Lending Partners in some form. Kiva and Kiva lenders themselves do not receive interest on these loans.
Our partners collect interest from borrowers because there are many operational expenses associated with microfinance in developing markets, especially in rural areas. Many of Kiva's Lending Partners also provide additional services alongside their loan products such as business training, financial literacy lessons, or health services.
Kiva will not partner with an organization that charges unreasonable interest rates, and we require Lending Partners to fully disclose their rates. In addition, we only partner with microfinance institutions and organizations that have a social mission to serve the poor, unbanked, and underserved.
There are some 0% interest loans on Kiva, including all direct loans in the United States. To learn more about the interest rates Kiva borrowers pay, you can review the "Average cost to borrower" field on a loan profile.
We also encourage you to read the following articles if you are interested in further educating yourself on the topic: Microfinance 101 (https://www.kiva.org/microfinance), Top 10 things to know about microfinance (https://www.kiva.org/blog/top-10-things-to-know-about-microfinance), Microfinance interest rates explained (https://www.kiva.org/blog/whats-up-with-microfinance-interest-rates)
Our partners collect interest from borrowers because there are many operational expenses associated with microfinance in developing markets, especially in rural areas. Many of Kiva's Lending Partners also provide additional services alongside their loan products such as business training, financial literacy lessons, or health services.
Kiva will not partner with an organization that charges unreasonable interest rates, and we require Lending Partners to fully disclose their rates. In addition, we only partner with microfinance institutions and organizations that have a social mission to serve the poor, unbanked, and underserved.
There are some 0% interest loans on Kiva, including all direct loans in the United States. To learn more about the interest rates Kiva borrowers pay, you can review the "Average cost to borrower" field on a loan profile.
We also encourage you to read the following articles if you are interested in further educating yourself on the topic: Microfinance 101 (https://www.kiva.org/microfinance), Top 10 things to know about microfinance (https://www.kiva.org/blog/top-10-things-to-know-about-microfinance), Microfinance interest rates explained (https://www.kiva.org/blog/whats-up-with-microfinance-interest-rates)
What is a risk rating?
There are many levels of risk associated with Kiva loans, which are explained on our website here: kiva.org/about/risk
The Lending Partner risk rating reflects the risk of institutional default associated with each of Kiva’s Lending Partners. A 0.5-star rating means the organization has a relatively higher risk of institutional default, while a 5-star rating indicates the organization is at a relatively lower risk of default, based on Kiva's analysis and the available information displayed in the Lending Partner section of every loan. Lending Partners with the lowest credit tier undergo a lighter level of due diligence and do not receive a risk rating; instead, in places where a risk rating would normally appear, these partners are labeled as “Experimental.” For more information, see "What is an Experimental Lending Partner?"
Direct loans also do not receive a formal risk rating. Instead, these loans are approved through “social underwriting”, where trustworthiness is determined by friends & family lending a portion of the loan request, or by a Kiva approved Trustee vouching for the borrower. Direct loans will appear as "Unrated" and lenders should always assume these loans represent the highest level of repayment risk on Kiva.
The Lending Partner risk rating reflects the risk of institutional default associated with each of Kiva’s Lending Partners. A 0.5-star rating means the organization has a relatively higher risk of institutional default, while a 5-star rating indicates the organization is at a relatively lower risk of default, based on Kiva's analysis and the available information displayed in the Lending Partner section of every loan. Lending Partners with the lowest credit tier undergo a lighter level of due diligence and do not receive a risk rating; instead, in places where a risk rating would normally appear, these partners are labeled as “Experimental.” For more information, see "What is an Experimental Lending Partner?"
Direct loans also do not receive a formal risk rating. Instead, these loans are approved through “social underwriting”, where trustworthiness is determined by friends & family lending a portion of the loan request, or by a Kiva approved Trustee vouching for the borrower. Direct loans will appear as "Unrated" and lenders should always assume these loans represent the highest level of repayment risk on Kiva.
How are loans facilitated?
Kiva loans are facilitated through 2 models, partner and direct, that enable us to reach the greatest number of people around the world.
For partner loans, borrowers apply to a local Lending Partner, which manages the loan on the ground. Lending Partners are responsible for screening borrowers, disbursing loans, posting borrowers to the Kiva website for funding, collecting repayments and otherwise administering Kiva loans on the ground to borrowers.
For direct loans, borrowers apply through the Kiva website and may or may not be endorsed by a Trustee. Unlike Lending Partners, Trustees don't handle any financial transactions or have any duty to repay loans on behalf of their borrowers. Instead, Trustees take the role of providing support and business advice to their borrowers throughout the term of the loan.
More information about successive and concurrent loans
Lending Partners often work with borrowers over time to help them build credit and expand their businesses. In order to make it easier for partners to post loans for borrowers who have been listed on Kiva before, we allow some partners the ability to relist a loan without having to re-enter all of the borrower's information. When this occurs, you'll see an updated loan description, as well as excerpts of the original descriptions from an earlier loan.
Most borrowers take out loans consecutively, meaning that they receive a second loan after having repaid the first. However, sometimes our Lending Partners give out concurrent loans, allowing borrowers to take out one primary loan and a secondary "add-on" loan along with it. These additional loans are typically smaller than the borrower's primary loan and serve a different purpose. We trust our partners to determine whether a borrower has the means to be able to repay a successive or concurrent loan.
Most borrowers take out loans consecutively, meaning that they receive a second loan after having repaid the first. However, sometimes our Lending Partners give out concurrent loans, allowing borrowers to take out one primary loan and a secondary "add-on" loan along with it. These additional loans are typically smaller than the borrower's primary loan and serve a different purpose. We trust our partners to determine whether a borrower has the means to be able to repay a successive or concurrent loan.
Lenders and lending teams
Country: Peru
Lending Partner: Barefoot Power
Time on Kiva:
152 months
Kiva borrowers:
28
Total loans:
$560,100
Average cost to borrower:
0% APR
Delinquency rate:
0.00%
Loans at risk rate:
0.00%
Default rate:
22.77%
Currency exchange loss rate:
0.01%
Average cost to borrower (PY)
Many of Kiva's Lending Partners do charge borrowers in some form in order to make possible the long-term sustainability of their operations, reach and impact. For this specific Lending Partner, Kiva displays portfolio yield (PY), which is equal to a Lending Partner's financial earnings divided by its average loan portfolio outstanding during a given year. Currently, Kiva displays portfolio yield for most of its Lending Partners that are microfinance institutions (MFIs). Portfolio yield applies to the institution as a whole, and thus is a proxy for cost to borrowers rather than a direct measurement. Kiva calculates portfolio yield directly from the most recently available financial statements of a Lending Partner and compares this result with other publicly available sources of pricing information such as mixmarket.org and mftransparency.org.
For more information, please visit: What do “Average cost to borrower” and “PY” mean?
What does "Profitability (Return on Assets)" mean?
"Return on Assets" is an indication of a Lending Partner's profitability. It can also be an indicator of the long-term sustainability of an organization, as organizations consistently operating at a loss (those that have a negative return on assets) may not be able to sustain their operations over time.
Average loan size (% of per capita income)
A Lending Partner's average loan size is expressed as a percentage of the country's gross national annual income per capita. Loans that are smaller (that is, as a lower percentage of gross national income per capita) are generally made to more economically disadvantaged populations. However, these same loans are generally more costly for the Lending Partner to originate, disburse and collect.
Partner delinquency (arrears) rate
Kiva defines a partner's delinquency (arrears) rate as the amount of late payments divided by the total outstanding principal balance Kiva has with the Lending Partner. Arrears can result from late repayments from Kiva borrowers as well as delayed payments from the Lending Partner.
How this is calculated: delinquency (arrears) rate = $ value of payments past due of delinquent paying back loans / outstanding $ value of all paying back loans
How this is calculated: delinquency (arrears) rate = $ value of payments past due of delinquent paying back loans / outstanding $ value of all paying back loans
Loans at risk rate
The loans at risk rate refers to the percentage of Kiva loans being paid back by this Lending Partner that are past due in repayment by at least 1 day (also known as arrears). This delinquency can be due to either non-payment by Kiva borrowers or non-payment by the Lending Partner itself.
Loans at risk rate = outstanding $ value of delinquent paying back loans / outstanding $ value of all paying back loans
Example: A partner has fives loans that are in “paying back” status and the loan amount for each is $100. All of the loans have first installments of $10. One borrower repays only $9 and hence, his loan is in arrears. The other four borrowers repay $10. The loans at risk rate is 91 / 451 = 20.18%.
The loans at risk rate is an aggregate that does not distinguish between borrower delinquency and partner delinquency. So in the example above, the loans at risk rate will be 20.18% regardless of whether it is the borrower or partner that is behind in repayments.
Lending Partner's default rate
The default rate is the percentage of ended loans (no longer paying back) which have failed to
repay (measured in dollar volume, not units).
How this is calculated: default rate = amount of ended loans defaulted / amount of ended loans
Notes:
- Many Lending Partners do not yet have many ended loans due to their short history on Kiva (see "Time on Kiva"). If this is the case, a more meaningful indicator of principal risk is "delinquency rate."
- At Kiva, we define default (non-repayment) as: the time when Kiva determines that collection of funds from a borrower or partner is doubtful, or the cumulative amount repaid as of a quarterly reconciliation is less than the amount expected as of 360 days prior and there have been no repayments reported to Kiva during this time.
Kiva typically processes defaults on a semiannual basis, and case by case exceptions may be made if the partner or Kiva anticipates future repayments to be made on the loan. Lending Partners also have the option to default loans at any time, should they determine that further collection of loan repayments from the borrower is unlikely.
How this is calculated: default rate = amount of ended loans defaulted / amount of ended loans
Notes:
- Many Lending Partners do not yet have many ended loans due to their short history on Kiva (see "Time on Kiva"). If this is the case, a more meaningful indicator of principal risk is "delinquency rate."
- At Kiva, we define default (non-repayment) as: the time when Kiva determines that collection of funds from a borrower or partner is doubtful, or the cumulative amount repaid as of a quarterly reconciliation is less than the amount expected as of 360 days prior and there have been no repayments reported to Kiva during this time.
Kiva typically processes defaults on a semiannual basis, and case by case exceptions may be made if the partner or Kiva anticipates future repayments to be made on the loan. Lending Partners also have the option to default loans at any time, should they determine that further collection of loan repayments from the borrower is unlikely.
What's a Lending Partner?
Kiva is able to reach more borrowers in some of the most remote places around the world through our global network of Lending Partners. These partners are local organizations working in communities to vet borrowers, disburse loans, collect repayments, provide services and administer loans on the ground in general.
Our Lending Partners are nonprofit organizations, microfinance institutions, schools, and social enterprises. Many provide services alongside their loans, such as entrepreneurial training or finanical literacy development. Our partners all share one thing in common: a desire to improve people's lives through access to safe and affordable credit. You can see a list of Kiva Lending Partners here: kiva.org/partners
Our Lending Partners are nonprofit organizations, microfinance institutions, schools, and social enterprises. Many provide services alongside their loans, such as entrepreneurial training or finanical literacy development. Our partners all share one thing in common: a desire to improve people's lives through access to safe and affordable credit. You can see a list of Kiva Lending Partners here: kiva.org/partners
Tags
#Biz Durable Asset
|
#Eco-friendly
|
#First Loan
|
#Inspiring Story
|
#Low-profit FP
|
#Post-disbursed
|
Loan tags help lenders find loans that match certain areas of interest.
Loan details
Loan length:
14 months
Repayment schedule:
Irregularly
Disbursed date:
May 21, 2014
Funding model:
Fixed
Facilitated by Lending Partner:
Barefoot Power
Repayment schedule
A loan's repayment schedule describes the frequency with which repayments are sent to Kiva lenders:
Monthly: One repayment made per month
End of term: One repayment made at the end of the loan term
Irregular: Any other repayment schedule
To see a detailed repayment schedule for a specific loan, click the "Repayment schedule" link on the loan profile under "Loan details."
What is the disbursed date?
The disbursed date indicates the date that the borrower receives their loan funds. Loan disbursal for loans on Kiva can happen anywhere from 30 days before to 90 days after the loan is posted on the Kiva website. Direct loans are always post-disbursed, and will be done only after the loan has fully fundraised on Kiva.
In the case of partner loans, many of our Lending Partners choose to disburse loan funds before the loan request is posted on Kiva. We allow pre-disbursal because it ensures that the funds reach the borrower as soon as they are needed. Loan funds from Kiva lenders then go to backfill that amount and as a lender you assume the risk of the loan. By doing this, our Lending Partners assume the risk that, if the loan isn't funded by lenders, they will have to fund the loan without any funds from Kiva.
If a partner loan is not pre-disbursed, it will be listed on Kiva with an expected "post-disbursed" date. If a post-disbursed loan is not funded on Kiva, there is a chance that the borrower may not receive their loan. Some Lending Partners choose to disburse loans with other sources of funding, while other partners don't have the resources available to fund loans without Kiva lenders' support. No direct loans will be disbursed unless they fully fundraise on Kiva.
In the case of partner loans, many of our Lending Partners choose to disburse loan funds before the loan request is posted on Kiva. We allow pre-disbursal because it ensures that the funds reach the borrower as soon as they are needed. Loan funds from Kiva lenders then go to backfill that amount and as a lender you assume the risk of the loan. By doing this, our Lending Partners assume the risk that, if the loan isn't funded by lenders, they will have to fund the loan without any funds from Kiva.
If a partner loan is not pre-disbursed, it will be listed on Kiva with an expected "post-disbursed" date. If a post-disbursed loan is not funded on Kiva, there is a chance that the borrower may not receive their loan. Some Lending Partners choose to disburse loans with other sources of funding, while other partners don't have the resources available to fund loans without Kiva lenders' support. No direct loans will be disbursed unless they fully fundraise on Kiva.
Funding model
Every loan has only 30 days to fundraise on Kiva. There are 2 different options for how that funding is sent to the field:
Fixed: the total loan amount must be raised in order for funds to be sent to the Lending Partner. If the loan is not funded in full within the fundraising period, the loan will expire and any funds raised will be returned to lenders' Kiva accounts.
Flexible: any funds raised within 30 days will be passed along to the Lending Partner facilitating the loan and they will come up with other sources of funding to cover the rest of the loan amount.
What does "Partner covers currency loss" mean & how could it affect my Kiva loans?
When lending internationally, the local currency in a borrower's country may lose some of its value compared to the US dollar -- requiring the partner to use more of its local currency to repay Kiva in USD. We offer some Lending Partners the option to protect themselves against currency fluctuations by choosing to pass on these losses to Kiva lenders. By bearing this risk, lenders protect the partner and its borrowers from catastrophic currency devaluations and contribute to the sustainability of their operations.
Potential for currency exchange loss is noted on every loan profile under the loan details:
"Yes" means the Lending Partner will cover any currency loss. Lenders will not bear losses due to currency fluctuation
"Partial" means that the Lending Partner has opted to cover losses only up to 10%. If the U.S. dollar appreciates more than 10% against the local currency, those losses will be passed onto lenders.
"No" means that the Lending Partner is not covering any currency losses and all losses will be passed onto lenders.
"N/A" means the Lending Partner disburses loans to borrowers in USD so their loans are not subject to any currency fluctuation.
Potential for currency exchange loss is noted on every loan profile under the loan details:
"Yes" means the Lending Partner will cover any currency loss. Lenders will not bear losses due to currency fluctuation
"Partial" means that the Lending Partner has opted to cover losses only up to 10%. If the U.S. dollar appreciates more than 10% against the local currency, those losses will be passed onto lenders.
"No" means that the Lending Partner is not covering any currency losses and all losses will be passed onto lenders.
"N/A" means the Lending Partner disburses loans to borrowers in USD so their loans are not subject to any currency fluctuation.
Do Kiva borrowers pay any interest on their loans?
Yes, most Kiva borrowers do pay interest to our Lending Partners in some form. Kiva and Kiva lenders themselves do not receive interest on these loans.
Our partners collect interest from borrowers because there are many operational expenses associated with microfinance in developing markets, especially in rural areas. Many of Kiva's Lending Partners also provide additional services alongside their loan products such as business training, financial literacy lessons, or health services.
Kiva will not partner with an organization that charges unreasonable interest rates, and we require Lending Partners to fully disclose their rates. In addition, we only partner with microfinance institutions and organizations that have a social mission to serve the poor, unbanked, and underserved.
There are some 0% interest loans on Kiva, including all direct loans in the United States. To learn more about the interest rates Kiva borrowers pay, you can review the "Average cost to borrower" field on a loan profile.
We also encourage you to read the following articles if you are interested in further educating yourself on the topic: Microfinance 101 (https://www.kiva.org/microfinance), Top 10 things to know about microfinance (https://www.kiva.org/blog/top-10-things-to-know-about-microfinance), Microfinance interest rates explained (https://www.kiva.org/blog/whats-up-with-microfinance-interest-rates)
Our partners collect interest from borrowers because there are many operational expenses associated with microfinance in developing markets, especially in rural areas. Many of Kiva's Lending Partners also provide additional services alongside their loan products such as business training, financial literacy lessons, or health services.
Kiva will not partner with an organization that charges unreasonable interest rates, and we require Lending Partners to fully disclose their rates. In addition, we only partner with microfinance institutions and organizations that have a social mission to serve the poor, unbanked, and underserved.
There are some 0% interest loans on Kiva, including all direct loans in the United States. To learn more about the interest rates Kiva borrowers pay, you can review the "Average cost to borrower" field on a loan profile.
We also encourage you to read the following articles if you are interested in further educating yourself on the topic: Microfinance 101 (https://www.kiva.org/microfinance), Top 10 things to know about microfinance (https://www.kiva.org/blog/top-10-things-to-know-about-microfinance), Microfinance interest rates explained (https://www.kiva.org/blog/whats-up-with-microfinance-interest-rates)
What is a risk rating?
There are many levels of risk associated with Kiva loans, which are explained on our website here: kiva.org/about/risk
The Lending Partner risk rating reflects the risk of institutional default associated with each of Kiva’s Lending Partners. A 0.5-star rating means the organization has a relatively higher risk of institutional default, while a 5-star rating indicates the organization is at a relatively lower risk of default, based on Kiva's analysis and the available information displayed in the Lending Partner section of every loan. Lending Partners with the lowest credit tier undergo a lighter level of due diligence and do not receive a risk rating; instead, in places where a risk rating would normally appear, these partners are labeled as “Experimental.” For more information, see "What is an Experimental Lending Partner?"
Direct loans also do not receive a formal risk rating. Instead, these loans are approved through “social underwriting”, where trustworthiness is determined by friends & family lending a portion of the loan request, or by a Kiva approved Trustee vouching for the borrower. Direct loans will appear as "Unrated" and lenders should always assume these loans represent the highest level of repayment risk on Kiva.
The Lending Partner risk rating reflects the risk of institutional default associated with each of Kiva’s Lending Partners. A 0.5-star rating means the organization has a relatively higher risk of institutional default, while a 5-star rating indicates the organization is at a relatively lower risk of default, based on Kiva's analysis and the available information displayed in the Lending Partner section of every loan. Lending Partners with the lowest credit tier undergo a lighter level of due diligence and do not receive a risk rating; instead, in places where a risk rating would normally appear, these partners are labeled as “Experimental.” For more information, see "What is an Experimental Lending Partner?"
Direct loans also do not receive a formal risk rating. Instead, these loans are approved through “social underwriting”, where trustworthiness is determined by friends & family lending a portion of the loan request, or by a Kiva approved Trustee vouching for the borrower. Direct loans will appear as "Unrated" and lenders should always assume these loans represent the highest level of repayment risk on Kiva.
How are loans facilitated?
Kiva loans are facilitated through 2 models, partner and direct, that enable us to reach the greatest number of people around the world.
For partner loans, borrowers apply to a local Lending Partner, which manages the loan on the ground. Lending Partners are responsible for screening borrowers, disbursing loans, posting borrowers to the Kiva website for funding, collecting repayments and otherwise administering Kiva loans on the ground to borrowers.
For direct loans, borrowers apply through the Kiva website and may or may not be endorsed by a Trustee. Unlike Lending Partners, Trustees don't handle any financial transactions or have any duty to repay loans on behalf of their borrowers. Instead, Trustees take the role of providing support and business advice to their borrowers throughout the term of the loan.
More information about successive and concurrent loans
Lending Partners often work with borrowers over time to help them build credit and expand their businesses. In order to make it easier for partners to post loans for borrowers who have been listed on Kiva before, we allow some partners the ability to relist a loan without having to re-enter all of the borrower's information. When this occurs, you'll see an updated loan description, as well as excerpts of the original descriptions from an earlier loan.
Most borrowers take out loans consecutively, meaning that they receive a second loan after having repaid the first. However, sometimes our Lending Partners give out concurrent loans, allowing borrowers to take out one primary loan and a secondary "add-on" loan along with it. These additional loans are typically smaller than the borrower's primary loan and serve a different purpose. We trust our partners to determine whether a borrower has the means to be able to repay a successive or concurrent loan.
Most borrowers take out loans consecutively, meaning that they receive a second loan after having repaid the first. However, sometimes our Lending Partners give out concurrent loans, allowing borrowers to take out one primary loan and a secondary "add-on" loan along with it. These additional loans are typically smaller than the borrower's primary loan and serve a different purpose. We trust our partners to determine whether a borrower has the means to be able to repay a successive or concurrent loan.
Lending Partner: Barefoot Power
Time on Kiva:
152 months
Kiva borrowers:
28
Total loans:
$560,100
Average cost to borrower:
0% APR
Delinquency rate:
0.00%
Loans at risk rate:
0.00%
Default rate:
22.77%
Currency exchange loss rate:
0.01%
Average cost to borrower (PY)
Many of Kiva's Lending Partners do charge borrowers in some form in order to make possible the long-term sustainability of their operations, reach and impact. For this specific Lending Partner, Kiva displays portfolio yield (PY), which is equal to a Lending Partner's financial earnings divided by its average loan portfolio outstanding during a given year. Currently, Kiva displays portfolio yield for most of its Lending Partners that are microfinance institutions (MFIs). Portfolio yield applies to the institution as a whole, and thus is a proxy for cost to borrowers rather than a direct measurement. Kiva calculates portfolio yield directly from the most recently available financial statements of a Lending Partner and compares this result with other publicly available sources of pricing information such as mixmarket.org and mftransparency.org.
For more information, please visit: What do “Average cost to borrower” and “PY” mean?
What does "Profitability (Return on Assets)" mean?
"Return on Assets" is an indication of a Lending Partner's profitability. It can also be an indicator of the long-term sustainability of an organization, as organizations consistently operating at a loss (those that have a negative return on assets) may not be able to sustain their operations over time.
Average loan size (% of per capita income)
A Lending Partner's average loan size is expressed as a percentage of the country's gross national annual income per capita. Loans that are smaller (that is, as a lower percentage of gross national income per capita) are generally made to more economically disadvantaged populations. However, these same loans are generally more costly for the Lending Partner to originate, disburse and collect.
Partner delinquency (arrears) rate
Kiva defines a partner's delinquency (arrears) rate as the amount of late payments divided by the total outstanding principal balance Kiva has with the Lending Partner. Arrears can result from late repayments from Kiva borrowers as well as delayed payments from the Lending Partner.
How this is calculated: delinquency (arrears) rate = $ value of payments past due of delinquent paying back loans / outstanding $ value of all paying back loans
How this is calculated: delinquency (arrears) rate = $ value of payments past due of delinquent paying back loans / outstanding $ value of all paying back loans
Loans at risk rate
The loans at risk rate refers to the percentage of Kiva loans being paid back by this Lending Partner that are past due in repayment by at least 1 day (also known as arrears). This delinquency can be due to either non-payment by Kiva borrowers or non-payment by the Lending Partner itself.
Loans at risk rate = outstanding $ value of delinquent paying back loans / outstanding $ value of all paying back loans
Example: A partner has fives loans that are in “paying back” status and the loan amount for each is $100. All of the loans have first installments of $10. One borrower repays only $9 and hence, his loan is in arrears. The other four borrowers repay $10. The loans at risk rate is 91 / 451 = 20.18%.
The loans at risk rate is an aggregate that does not distinguish between borrower delinquency and partner delinquency. So in the example above, the loans at risk rate will be 20.18% regardless of whether it is the borrower or partner that is behind in repayments.
Lending Partner's default rate
The default rate is the percentage of ended loans (no longer paying back) which have failed to
repay (measured in dollar volume, not units).
How this is calculated: default rate = amount of ended loans defaulted / amount of ended loans
Notes:
- Many Lending Partners do not yet have many ended loans due to their short history on Kiva (see "Time on Kiva"). If this is the case, a more meaningful indicator of principal risk is "delinquency rate."
- At Kiva, we define default (non-repayment) as: the time when Kiva determines that collection of funds from a borrower or partner is doubtful, or the cumulative amount repaid as of a quarterly reconciliation is less than the amount expected as of 360 days prior and there have been no repayments reported to Kiva during this time.
Kiva typically processes defaults on a semiannual basis, and case by case exceptions may be made if the partner or Kiva anticipates future repayments to be made on the loan. Lending Partners also have the option to default loans at any time, should they determine that further collection of loan repayments from the borrower is unlikely.
How this is calculated: default rate = amount of ended loans defaulted / amount of ended loans
Notes:
- Many Lending Partners do not yet have many ended loans due to their short history on Kiva (see "Time on Kiva"). If this is the case, a more meaningful indicator of principal risk is "delinquency rate."
- At Kiva, we define default (non-repayment) as: the time when Kiva determines that collection of funds from a borrower or partner is doubtful, or the cumulative amount repaid as of a quarterly reconciliation is less than the amount expected as of 360 days prior and there have been no repayments reported to Kiva during this time.
Kiva typically processes defaults on a semiannual basis, and case by case exceptions may be made if the partner or Kiva anticipates future repayments to be made on the loan. Lending Partners also have the option to default loans at any time, should they determine that further collection of loan repayments from the borrower is unlikely.
What's a Lending Partner?
Kiva is able to reach more borrowers in some of the most remote places around the world through our global network of Lending Partners. These partners are local organizations working in communities to vet borrowers, disburse loans, collect repayments, provide services and administer loans on the ground in general.
Our Lending Partners are nonprofit organizations, microfinance institutions, schools, and social enterprises. Many provide services alongside their loans, such as entrepreneurial training or finanical literacy development. Our partners all share one thing in common: a desire to improve people's lives through access to safe and affordable credit. You can see a list of Kiva Lending Partners here: kiva.org/partners
Our Lending Partners are nonprofit organizations, microfinance institutions, schools, and social enterprises. Many provide services alongside their loans, such as entrepreneurial training or finanical literacy development. Our partners all share one thing in common: a desire to improve people's lives through access to safe and affordable credit. You can see a list of Kiva Lending Partners here: kiva.org/partners
You are opting out of using Free Trial.
You have selected to not use your Free Trial and will be prompted to pay for this loan using your own money.
Agree Use a Free TrialShoot! This loan is ineligible.
Your free credit can't be applied to this loan. If you would like to make a loan to this borrower anyway, you will have to use your own money.
Lend Anyway Find an Eligible LoanYou cannot use your Free Trial to support this loan.
Free Trials cannot be used to make loans during their private fundraising period on Kiva. If you would like to lend to this borrower anyway, you will have to use your own money.
Agree Find an Eligible Loan