I enjoy loaning money through Kiva.org to help small businesses overseas- when it get’s paid back. That way I can keep it cycling through to help others. Once seed money is lost, it’s lost forever and won’t recycle.
I’ve got two loans that are seriously delinquent now and I learn that the organization that is the local intermediary for both these loans has over an 85% delinquency rate though technically they haven’t had a default. According to the terms of the loans they should be almost repaid by now but aren’t. I suppose they still could be repaid, but we’ll see.
Now at least Kiva has a risk rating system and they help users estimate the likelihood of getting their money back to re-lend. You can see local intermediaries for the microloans ranked by estimated risk here. They didn’t have this when I made these two loans.
Thankfully my other loans are doing OK it looks like.
Now these delinquencies may ultimately pay off.
Or they may not.
At least I’ll have a better idea in the future how to allocate my resources.
I still suggest lending through Kiva.org just recognize the risk associated with it and realize that with high risk loans, you may just consider you’re giving the money away completely.
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Alina on October 29th, 2008 at 5:04 am
Hi I am Alina Shirikyan from Armenia, MDF (micro developmant fund)
If u can send me delinquency training materials