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Kiva Interest Rate Finder
October 4, 2013 1:20 PM   Subscribe

Kiva Interest Rate Finder "Kiva allows people to fund microfinance loans through Field Partners. Some Kiva Partners charge the equivalent of 109% APR. That is incredibly high. Kiva doesn't make it easy to find the partners that charge borrowers 0% or low interest, so I made a script to do so. " [via mefi projects]
posted by aniola (11 comments total) 23 users marked this as a favorite

 
Awesome. Thanks! Microcredit and microfinance have been much ballyhooed as a freeish-marketish panacea and then roundly criticized as 21st century loansharking that led to a glut in mobile telephony that undercut the sustainability of the village phone ladies but as long as we are doing it, let's do it better
posted by spamandkimchi at 1:34 PM on October 4, 2013 [1 favorite]


This is a neat project--thanks for the front-page post.
posted by box at 1:54 PM on October 4, 2013


This is probably obvious but I just can't seem to find- once I'm on the partner page, where do I see their active people who are seeking a loan?
posted by cell divide at 2:17 PM on October 4, 2013


a freeish-marketish panacea and then roundly criticized as 21st century loansharking

Both of these are too simplistic. I've been loaning through Kiva for about 4 years now and have seen both ends of this spectrum, but the "fat middle" seems to be a very helpful way to make real improvements in peoples' lives.
posted by cell divide at 2:20 PM on October 4, 2013 [1 favorite]


Once you're on the partner page, click the link on the right-hand side that says "See all loans from this field partner."
posted by aniola at 2:55 PM on October 4, 2013


Thanks aniola. So far all of the ones I clicked on didn't have any active loans which confused me. All of those were with 0% interest so I wonder if there might be a flaw in the methodology.
posted by cell divide at 3:45 PM on October 4, 2013


You're doing it right. On the projects page, rajbot says "I wrote this script because I had a small amount of money in Kiva, and I decided to see if there was something I could get behind instead of pulling my money out. Even with the list of lenders that don't charge interest, it took a long time before I found any that had any active projects that needed funding."
posted by aniola at 4:20 PM on October 4, 2013 [1 favorite]


Don't forget about Team Metafilter on Kiva!
posted by allkindsoftime at 10:08 PM on October 4, 2013 [3 favorites]


I am left gasping and flailing at some of the interest being charged to these people.
posted by owlrigh at 4:29 PM on October 5, 2013


To be fair to Kiva 109% is a lot less than the interest they would pay to any other money lender. If the cost of administering and collecting payments on a loan are pretty much fixed, then the smaller the amount loaned the larger those charges will appear when presented as a percentage.

Kiva uses a calculation called portfolio yield to express the average interest rate and fees that Kiva borrowers pay to the Kiva Field Partner administering their loan. Portfolio yield is defined as all interest and fees paid by borrowers to the Field Partner divided by the average portfolio outstanding during any given year.

The portfolio yield is generally based on audited financial information and is a better indication of the cost of borrowing money from a Kiva Field Partner than the simple interest rates reported by our Field Partners because it:

a) Includes any fees associated with loans and
b) Is expressed in one-year increments (similar to the way an APR works)


I just looked a random sample on Kiva.org
Interest & Fees are Charged: Yes
Portfolio Yield: 29.40%
Profitability(Return on Assets): 2.1%

But this is for a loan of just $500, so the portfolio yield is around $150 and the profit made by the field partner is about $10
Also bear in mind that the underlying inflation rate in the countries served by Kiva is typically over 10%
posted by Lanark at 6:48 AM on October 6, 2013


Also keep in mind that APR is not necessarily a good measure of actual interest paid when you're discussing microfinance, where terms are typically less than a year. For instance, that 109% "APR" is for HOPE DRC, whose average loan term is only 3.64 months. Borrowers aren't actually repaying double their loan amounts.
posted by solotoro at 9:13 AM on October 7, 2013


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