Watch Daniel's video profile here: https://www.youtube.com/watch?v=woki1EbAy3o
Daniel is 54 years old, married and has 5 children. He has been a solar lamp distributor for NOTS Lampe Solaire for the past 3 years. Last year Daniel used Kiva funds to purchase solar lamp inventory worth $20,275. He successfully paid back his Kiva loan and now hopes to increase the loan size so he can purchase 2,500 solar lamps from NOTS Lampes Solaire and sell them to cotton farmers on credit. Prior to selling solar lamps, Daniel studied agriculture and engineering and worked as a farm manager at a Malian textile company. He started his own company because he believes that solar lamps are very useful for rural families who live in his region. Daniel’s main customers are farmers from Sikasso, the southern-most region in Mali. The majority of his customers do not have access to electricity - they light their homes with kerosene, flashlights and candles instead. To charge their mobile phones they walk long distances to a kiosk and pay money. On top of being dangerous, time-consuming and toxic, these energy sources are expensive. They cost a family about $80 per year or 10% of their annual income! And during the rainy season it is even worse, as kerosene is oftentimes not available or very expensive. A d.light solar lamp lasts for about 5 years and costs $25. Purchasing a solar lamp saves families time and money (about $375 over 5 years!) and is much safer and healthier. The environment also benefits – no more toxic waste or dirty CO2 emissions. Daniel recently signed an agreement with the Union of Cotton Producer Cooperatives to promote solar lamps to the 15,000 cotton farmers in his region. He conservatively estimates that he can sell 2,500 lamps to these farmers. When the farmers sell their cotton harvest they can pay Daniel for the solar lamps. Your Kiva investment will help bring light to approximately 10,000 lives and help Daniel to provide for his family and expand his business. Thank you!
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Total loan: $49,250
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Daniel
Sikasso, Mali / Goods Distribution
A loan helped to buy solar lamps that he will sell to cotton farmers.
Daniel's story
More about this loan
This Kiva loan will be used to provide borrowers with needed goods or services, as opposed to cash or financial credit. This loan will be delivered in the form of solar lamps to a distributor through NOTS Lampe Solaire, a solar lamp importer. The distributor will sell the lamps at a profit to retailers, who will resell them to consumers. This will enable the distributor to earn an income while helping other households replace dangerous and dirty kerosene lamps with safe, clean solar lamps. Households that obtain solar lamps generally save between $60 to $100 a year on kerosene costs, also boosting their economic situation. Because this inventory of lamps is very expensive, NOTS Lampe Solaire will wait to receive Kiva lenders' funds before delivering them to the distributor. Accordingly, the disbursement date on this loan is an estimate. If the distributor repays on time, then 0% interest will be charged. A 25% APR penalty will be charged on any funds repaid late. Lamp prices for end consumers are fixed and advertised by NOTS Lampe Solaire to help ensure optimal access to clean lamps for as many households as possible.
About NOTS Lampe Solaire:
NOTS Lampe Solaire is a for-profit social enterprise launched in 2011 that sells and distributes solar lamps, aiming to replace all kerosene lamps in Mali with clean, safe solar alternatives by the end of 2016. Kiva loans are used by distributors and women?s associations to purchase solar lamps on credit that they can then sell in their local communities at a profit to improve their livelihoods.
By replacing kerosene lamps, solar lamps make homes safer and more productive mreduce air pollution, facilitate convenient mobile phone charging, and provide households with savings on energy costs of $60 to $100 a year per lamp.
Loan details
Loan length:
7 months
Repayment schedule:
Irregularly
Disbursed date:
December 30, 2014
Funding model:
Fixed
Partner covers currency loss?
Partially
Facilitated by Lending Partner:
NOTS Lampe Solaire
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: Mali
Lending Partner: NOTS Lampe Solaire
Time on Kiva:
136 months
Total loans:
$98,975
Average cost to borrower:
0% APR
Profitability (return on assets):
-21.0%
Delinquency rate:
0.00%
Loans at risk rate:
0.00%
Default rate:
0.00%
Currency exchange loss rate:
1.15%
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
|
#Hidden Gem
|
#Inspiring Story
|
#Low-profit FP
|
#Parent
|
#Post-disbursed
|
#Repeat Borrower
|
#Unique
|
Loan tags help lenders find loans that match certain areas of interest.
Loan details
Loan length:
7 months
Repayment schedule:
Irregularly
Disbursed date:
December 30, 2014
Funding model:
Fixed
Partner covers currency loss?
Partially
Facilitated by Lending Partner:
NOTS Lampe Solaire
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: NOTS Lampe Solaire
Time on Kiva:
136 months
Total loans:
$98,975
Average cost to borrower:
0% APR
Profitability (return on assets):
-21.0%
Delinquency rate:
0.00%
Loans at risk rate:
0.00%
Default rate:
0.00%
Currency exchange loss rate:
1.15%
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
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