MicroLoan Default Rates On Kiva.org

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.