Kiva Partner in Kenya Defaults on Entire Loan Portfolio
Kiva has announced that one of its field partners in Kenya has defaulted on its entire portfolio of $59,500 in open humanitarian microloans to 184 impoverished entrepreneurs. SEED Development Group apparently wasn’t giving all loan monies to entrepreneurs or any loan repayments to Kiva, so Kiva has terminated the relationship.
Kiva is being open about this situation and taking steps to ensure that it can’t happen again, which is good to see. And, it’s commendable that Kiva is crediting lenders for repayments “received” from SEED even though Kiva itself never received any of the promised repayments.
I’m sad about this for everyone impacted. At least 184 impoverished Kenyans will not get their loans or all of the loans. These are real people, like Dorcas Manjala who I lent to, and they could have used the loan money to help themselves and others. I hope Kiva’s other field partners in Kenya will be able to help these people and others like them.
I too worry about how this will affect Kiva. Most lenders to SEED entrepreneurs probably lost $50 or less. But, will they be too scared by this to lend through Kiva again in the future? And, will this issue keep new lenders from signing up, thus hurting impoverished people from around the world? I certainly hope not.
Kiva has a default rate of just .1 percent after more than $6.5 million in ended loans (at least up until the SEED announcement). So, I hope that potential lenders will still see the humanitarian value in Kiva that people like Bill Clinton and Oprah Winfrey have recognized. It’s an amazing organization and lenders need to support it now more than ever.