Microlending service, Kiva is launched in India enabling lenders to make loans of as small as $25 to Indian borrowers across sectors. The non-profit orgaization is working with field partners including:
– Odisa based People’s Forum : People’s Forum is dedicating Kiva-funded loans to expand and launch finance programs for widowed women, disabled individuals, and families affected by leprosy, in particular. These demographics are usually neglected and seen as “high risk,” making them perfect recipients for Kiva’s patient capital.
– Mahashakti Foundation, also based in Odisha, provides clients with an array of services from business training and microcredit to community development, fair price pharmacy services, food security, support for farmers, and loans for clean water and sanitation infrastructure.
– WSDS is a well-established nonprofit based in Manipur. The organization is distinguished by lending to women over age 55, which is unusual for microfinance institutions in India. It also offers clients credit to purchase solar lamps.
With more than 32% of India’s population falling below the international poverty line and 68% living on less than US$2 a day, the country is in dire need of responsible, affordable sources of capital. But Kiva loans are subjected to number of regulations used by the Reserve Bank of India to control foreign funding of Indian institutions. These regulations require that loans made to non-government microfinance institutions have a minimum term of 3 years.
Kiva has figured out a way to work with these rules. Their Field Partners will simply hold on to loan funds for the minimum 3-year term before sending repayments back to lenders. The borrower you select will probably repay beforehand, in which case your funds will be recycled to help other local borrowers — maximizing your impact before your funds are returned.
So the impact of this workaround is that Kiva will not provide regular repayment updates during India loan terms like it does for other Kiva loans. Instead, lenders will receive loan status details with their eventual repayment. Watch the introductory video from Kiva’s President Premal Shah:
On an average, 81% of Kiva borrowers are women and the repayment rates stand at 98.97%. The service, so far as disbursed loan worth $338 million globally.
Recommended Read: The Story of Milaap, A Micro-lending Platform