Chat with Premal Shah and NYC Social report

Discussion in 'Kiva | Loans That Change Lives' started by canucklehead, Aug 5, 2012.  |  Print Topic

  1. canucklehead
    Original Member

    canucklehead Gold Member

    Messages:
    5,895
    Likes Received:
    22,059
    Status Points:
    11,070
    OK, still long, but here is a report of the NYC social we recently held with Premal Shah.

    ---------------------------------------

    I had the fortune of speaking with Premal prior to the NYC social and I have to say it was a delight to get a chance to chat with him. I missed the opportunity during the Kiva Do when he went out for lunch with some of the group, so this was a good time to get to know him. I will skip the small chat we had and get straight to our discussions of Kiva.

    To begin with, he was very nice and complimentary of the team’s efforts and asked how things were going with the team. He praised MP and LLL, as well as other teams that have developed Mutual Funds and hopes this concept spreads! I told him that while we are still very active, the current state of expiring loans has made some members very uncomfortable and hoping for a resolution. I mentioned that OM had a different name amongst some MPers – ‘laissez faire’ which caused him to wince, but he said the term Open Marketplace was also not an appropriate term. He said the term he preferred was Open Credit line, which is what 22 FPs have been granted.

    He reiterated that the number of expirations was too much and there was vigorous debate internally to effect change. One reason for the need to grow was to ensure that they did not run out of loans, as has happened during holiday seasons past, and during times when celebrities like Oprah Winfrey have publicized the efforts of Kiva. While I understood that, I noted that this did not happen in the past year, and while it is important to ensure the continual flow of loans, a comfortable medium between too few and too many loans. In addition to that point, I said that while it may be important to ensure a good flow, a dramatic increase in volume was more likely to cannibalize loans rather than encourage greater loan funding, leading to a greater proportion of unfunded loans. There are some stats on the amount of expired loans and the proportion that is funded and then returned representing a sizable chunk of $ that is applied to a ‘wasted’ effort.

    Premal noted that Kiva is experiencing strong growth and anticipates continued surges in popularity, especially as the gain support from sponsors. We discussed the strength of Kiva and the opportunities that make it such an influential instrument for change, something he agreed was worth protecting, but also something that would bring others to the table. I said one thing that worries me about this was that as Kiva grows it needs to continue to protect the most vulnerable borrowers to ensure they continue to get funding. I reminded him of the diagram which illustrated Kiva’s current portion of MF in the world, and where they would like to grow relative to the global MF market. I cautioned that hopefully the growth was proportional and that any growth continued to include those who are disenfranchised and the original beneficiaries of MF – and that original group Kiva has done so much to help develop did not become a donut hole in their growth plans. He agreed wholeheartedly that this was an important aspect that they wanted to maintain as they grew.

    We discussed a few other points re: expiring loans, including the lender experience and I noted that all expired loans from Oct-April had at least one Milepoint member on the loan, in fact, it averaged 2 lenders per loan, with 2/3 of loans in May and over 1/2 of all loans in June had Milepoint members (a nod to Iolaire for the info). I also mentioned that while we are seeing 1 in 6 loans expiring, it is also affecting a lot of new lenders. Based on API data, 12% of new lenders with 1 loan had lent to an expired loan, something that can only be considered a negative experience. Premal was a bit surprised by that and said it is something they would like to track.

    Premal mentioned that they were looking at some exciting ventures, including loans in India beginning Aug 15th. These loans would be 3yr+ terms in accordance with Indian regulators to ensure that Kiva provides a stable platform for microfinance. He also mentioned that there will be new FPs coming along, and they are looking to work with reducing efforts for other FPs. One reason is that some of these FPs have matured and found additional funding sources, while others are in saturated markets. Some FPs will also be encouraged to promote green loans. One example is in Mongolia, where one will see that Credit Mongol will be increasing lending to specific targets (green energy and housing). This is a preferable option of still offering a FP options in a saturated market rather than not fund any loans.

    We discussed that as lenders, we needed to get more information and that Kiva needed to avoid bad loans (some of you know what I am talking about). Premal mentioned that they were surprised by some of the information on BP and MI, but they hope to get more info. One problem with having such a bare bone staff is how much info they can pass through. I also mentioned the US loans and how is it that an FP can be 3 *, but have 17% in defaults (Accion). I also opined about loan quality was not helping the situation, for example personal loans >$2K to buy furniture was probably the number one type of failed loan from Tamweelcom on July 1. He said that they are hoping to improve the information from FP to lender as much as they can.

    One thing that Premal mentioned was that there is a huge body of data which probably offers many points to help guide Kiva and its FPs to correcting the expiration issue as well as identifying loan success probabilities. There is only one person working at Kiva on analytics right now, but hopefully we can help them out in this endeavor. The key is to provide meaningful statistics and probabilities in an objective manner.
    <to be continued in another thread and website soon!!! ;) >
     
  2. canucklehead
    Original Member

    canucklehead Gold Member

    Messages:
    5,895
    Likes Received:
    22,059
    Status Points:
    11,070
    Kiva Social
    At the NYC Kiva Social, we had about 60 people attend. We had a few Milepoint members including From NYC, NYCAdventurer and Dr. NYC Aventurer, Rapid Travel Chai and his wife, IDGflygirl and Devon Fisher. After a small time to mingle, Premal started off the night off by introducing some of the Fellows and Zip Intern, asking them to share their experiences in the field and what it means.

    Although Devon had a very nice story (it was one she had told me previously about the school teacher in her video), I was deeply touched by Jen’s story. Jen’s family was from Cambodia and fled the Khmer Rouge. For her, the journey to Cambodia brought her back to a country shedding the despair of that dark time, still fresh and hurting from the pain, but ever ready and hungry to grow. From Devon, Jen and others, I have profound appreciation of the work they do and the experiences they gain from their time abroad.

    Despite the sweltering temperatures in the patio, there were many people ready to sign up for Kiva and to join the world of microfinance lenders like us. Like the Kiva Do, this is a sign of what Kiva hopes to grow – the offline community. By putting faces to Kiva, be it staff, Fellows or lenders, they (and we) hope there is sustained enthusiasm. Through growing numbers, we place the final piece in solving the problem of expiring loans – getting more people to support the microfinance cause, something teams like Milepoint and others believe is a way to help others. ^

    The event went til I was able to get Premal out of the bar (around 11), but not before the ‘it's a small world’ event. Some may know this, but Premal comes from Minnesota (something I forgot to mention to Rapid Travel Chai, who also harkens from that state. We had one bartender that night – Eric, who put up with a huge crowd and tirelessly kept the beers flowing. Well, turns out Eric was also from Minnesota. Even more ironic, Eric and Premal were from the same part of St Paul. Get’s better – they attended the same high school! The guy was so excited, he leapt across the room and gave Premal a big hug :eek: . Mr. Shah had that same metaphorical effect on people the whole night. For about 5 hours, he spoke to individuals like myself and those at the social – I was exhausted by the end, but he was still bursting with energy! He even had time to chat with Vijay and myself about some of the datamining to help FPs! His enthusiasm, his engagement, his friendliness give me great confidence in his efforts! :)

    One final thing Premal mentioned when I asked about another Kiva Do – he said ‘Yes!’ and with that he was abound up the stairs to the place he was staying in NYC! :D
     
  3. jbcarioca
    Original Member

    jbcarioca Gold Member

    Messages:
    17,507
    Likes Received:
    57,455
    Status Points:
    20,020
    Thanks for this Ho.
    I have a few comments:
    Premal obviously prefers anything other than 'laissez faire', although he's head that term in this context many times already. 'Open Credit Line' which he prefers, does not describe what they do. Although they do give a credit line to the 22, as they do with other FP's, they do not supervise nor in any way control the loan flow nor manage it. Thus, FP's must figure out for themselves what seasonality, monthly cycles, positioning or otehr factors may affect their success, while having no insight at all to the actions of other FP's nor of Kiva plans for competing offers.

    I was surprised that he was surprised that more than 10% of new single loan lenders had loaned to an expired loan for it was he who told me they were seeing a very large number of new lenders hit with expiries. Maybe he forgot.

    Regarding India I have made another thread because there are so many highly specific issues well beyond the tenor limit which is the only thing most Kiva people discuss.

    The enthusiasm and commitment Premal always shows make him an absolute delight to deal with, even when he cannot do anything about the specific issues under discussion. I wish I'd been with all of you!
     
    scarecrow, MissBurrill, kiwi and 8 others like this.
  4. milchap
    Original Member

    milchap Gold Member

    Messages:
    27,636
    Likes Received:
    148,037
    Status Points:
    20,020
    Thanks for the post Canucklehead. :)
     
    MissBurrill, fcjapan, YULtide and 5 others like this.
  5. canucklehead
    Original Member

    canucklehead Gold Member

    Messages:
    5,895
    Likes Received:
    22,059
    Status Points:
    11,070
    That is an excellent point and something Kiva would like to strengthen (guidance). As I alluded above, a new set of analytics will be coming along from the community. Fingers crossed the first iteration of the tools will be online in a couple of weeks. :)

    He may have also had a look of surprise from the stats I was spouting, or the crazy smoothie he ordered (it looked like a concoction out of a swamp, and just as organic! :D )

    Some of the stats they have been pulling out came from conversations people have had with Kiva. I had asked Kiva staff about the new lender experience and expired loans, so they probably pulled it out around the same time Vijay had done so on my request. We are looking into how this may be examined in a few months and compare to those who made a successful loan on their first try.

    He is an absolute ball of positive but constructive energy. They recognize there are issues and from what I see, to their best of abilities are working on it. With so many creative and dynamic individuals at Kiva, there are bound to be multiple solutions - the question is which to choose. I am confident that it will be sorted out. Some short term pain, but from this hopefully they (and we) can learn and go forward together. There are a lot of people who could use our help......
     
  6. harvson3

    harvson3 Silver Member

    Messages:
    679
    Likes Received:
    1,693
    Status Points:
    960
    I'm glad you got a chance to talk to him, and thanks very much for the report. By all accounts he seems like a nice guy and willing to take input. I'll allow that Kiva has growing pains and is perhaps still understaffed. Hopefully soon we can stop reading sentences that begin "Premal was surprised that..." ;)

    This made me sigh a little. Premal himself loaned to BP. Other people here didn't have to do much searching. Perhaps Milepointers can loan the Kiva office a working subscription to Google if theirs already expired.:cool:

    To anyone at Kiva reading this: thank you for all your hard work. We do appreciate it, and the opportunity to reach so many borrowers. And thanks for listening.
     
  7. milchap
    Original Member

    milchap Gold Member

    Messages:
    27,636
    Likes Received:
    148,037
    Status Points:
    20,020
    If data interpRetation is a concern at Kiva, then perhaps that part of the organization should be beefed up ASAP.
     
  8. jbcarioca
    Original Member

    jbcarioca Gold Member

    Messages:
    17,507
    Likes Received:
    57,455
    Status Points:
    20,020
    They do have a job search out for a databased marketing type, I read the PD. This is a chicken/egg problem. They need teh analysis desperately, but few at Kiva yet know how to use the information. The learning curve will, we all hope, be very steep.
    Oh how I wish we did not need to make such points. The discipline of critical thinking sometimes suffers when zealotry is in the air.:confused:
     
    scarecrow, MissBurrill, kiwi and 3 others like this.
  9. dgilks

    dgilks Silver Member

    Messages:
    68
    Likes Received:
    436
    Status Points:
    385
    Thanks Ho. This is quite insightful and I find it reassuring that the messages coming from Kiva HQ are increasingly worried about the level of expiries and the issues that we have been raising rather than simply dismissing them as has appeared to be the case in the past. I do still find comments like those about BP and MI concerning. I would have hoped that at the very least I significant amount of internet research would have been conducted by Kiva to ensure that the FPs were checked for any "interesting" things in their background before they were allowed to post loans and if allowed to participate at least have the full set of details about them available to get people thinking about whether or not to loan.
     
    YULtide, scarecrow, harvson3 and 3 others like this.
  10. jbcarioca
    Original Member

    jbcarioca Gold Member

    Messages:
    17,507
    Likes Received:
    57,455
    Status Points:
    20,020
    In fairness Kiva did respond to BP criticism and publicize much more information, although the actual lending practice seems not to have changed. They do find a very receptive community for such loans, a very enthusiastic one for the Strathmore ones and active promotion among some lenders for those and other non-micro loans. The Open Marketplace is a topic of active debate too; many influential parties (including not just the Libertarians among the Kiva community) think it is going fine, just as it should.

    In my estimation the best we can probably expect is improved disclosure.
     
    YULtide, scarecrow, tondoleo and 3 others like this.
  11. canucklehead
    Original Member

    canucklehead Gold Member

    Messages:
    5,895
    Likes Received:
    22,059
    Status Points:
    11,070
    I forgot to mention a new promotion Premal told me about - we actually saw a snippet of it a couple of weeks ago when we saw that if you recommend a friend - the lender and new lender both get a free loan.

    When one of your friends joins Kiva, you’ll both get to make a $25 loan for free
    https://www.kiva.org/portfolio/invites
     
    YULtide, tondoleo, harvson3 and 2 others like this.
  12. milchap
    Original Member

    milchap Gold Member

    Messages:
    27,636
    Likes Received:
    148,037
    Status Points:
    20,020
    I noticed this promo this am while checking the site.
     
    YULtide, tondoleo, harvson3 and 2 others like this.

Share This Page