Kiva Zip - making loans to individuals directly without field partners as intermediaries

Discussion in 'Kiva | Loans That Change Lives' started by miles and smiles, Jan 4, 2013.  |  Print Topic

  1. miles and smiles
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    miles and smiles Gold Member

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    I am wondering if others are making loans on Kiva Zip:
    https://zip.kiva.org/loans

    Kiva Zip allows lenders to make loans directly to individuals and to communicate directly with your borrowers.

    The main drawbacks seems to be that repayment rate is only 86.6% so far (compared to 99% on Kiva), loans are only offered in Kenya and the U.S. so far and there are very few loans (26 at moment).

    I've made two loans so far, and I intend to make more because there are some loans there which I find intriguing.

    Has anyone else tried Kiva Zip?
     
  2. DCtrAAveler
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    DCtrAAveler Gold Member

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    First I've heard of Kiva Zip, and will check it out to learn more. I like the idea of having a more direct connection to the borrowers, although it does seem to come with greater risk as well.
     
  3. HaveMilesWillTravel
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    HaveMilesWillTravel Gold Member

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    I looked at it a while ago and decided at the time against it. The repayment rate discouraged me. I also, at this time, don't plan on making any loans in the US as I feel that overall a dollar invested in a developing country has a chance of making a greater difference. That's not to say that all US-based borrowers are not worthy or in need of support, it's just how I decided to focus my time and money.

    Please keep us updated on your experience.
     
  4. canucklehead
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    canucklehead Gold Member

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    Jonny Price is the person who is Directing Kiva and I had the chance to chat with them when they were in NYC a couple of months ago. Around Milepoint, some of you may know Jonny as Mr. Ali Price! :D

    For now, Kiva Zip is focusing on loans in Kenya and US. While in NYC, Jonny was meeting up with prospective individuals whose businesses were affected by Hurricane/Superstorm Sandy.

    As DCtrAAveler mentions, there may be greater risk, but for the lender, interest is 0%. They use a Trustee system to recommend borrowers and you can see the repayment success rates (to date) for them here - https://zip.kiva.org/trustees .
     
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  5. misman
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    misman Gold Member

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    Can one credit the loans to the MP team?
     
  6. miles and smiles
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    miles and smiles Gold Member

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    With Kiva I have made 900+ loans to people whose lives are far different from me and who live far, far away from me. Kiva Zip also provides me the chance to loan money to people whose lives are more similar to me and who live close by. For example, there is a loan to a woman from Asheville on Kiva Zip right now. I didn't loan to her, but I find it interesting that I could just walk into her shop and talk with her if I wanted. The two loans I did make were to people whose activities are very similar to those I and my friends engage in (one makes veggie burgers and one networks among green organizations).
     
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  7. miles and smiles
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    miles and smiles Gold Member

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    Thanks for the link to the Trusteees' success rate. Of course, many of the loans are the first for a Trustee, so no data yet.
     
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  8. miles and smiles
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    miles and smiles Gold Member

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    Not possible, at least not yet.
     
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  9. milchap
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    milchap Gold Member

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    I am a traditional microlender......so I am taking a pass on this part of Kiva.
     
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  10. canucklehead
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    canucklehead Gold Member

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    in some ways, this is the truest sense - peer to peer, but I do understand that its model is with greater risk and a bit more on the fly in terms of structure.

    but I do agree, I prefer to put my money (at least the vast majority of it) in the regular Kiva site -- it has done well and I hope it is improving the lives of the borrowers!
     
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  11. HaveMilesWillTravel
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    HaveMilesWillTravel Gold Member

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    Are losses tax-deductible or would I have to start my own bank for that?
     
  12. canucklehead
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    canucklehead Gold Member

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    YMMV (in this case, your money may vary - or YTLOMV, with TLO being tax lawyer opinion)

    from KZ Terms of Use
    1.3 Tax Deductibility.

    You understand that Kiva is a non-profit public benefit corporation. Kiva has received exemption with the Internal Revenue Service as an organization that qualifies as a public charity under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended from time to time. You acknowledge, however, that because Loans are not donations to Kiva, Lenders are not eligible to receive a tax deduction as might otherwise be available in connection with a charitable contribution to a tax-exempt public charity. You also understand that you are solely responsible for determining the proper tax treatment for any transactions you conduct through the Zip Website and the Alpha Program. Kiva has not and will not provide any tax or legal advice to you in connection with any Loan. This Agreement does not attempt to define the tax implications of participating in the Alpha Program. If you participate in the Alpha Program, you should consult with your own accountants, tax advisors and legal advisors.

    1.5 Principal Loss Scenarios.

    You understand and hereby consent (without any prior notice thereof) to any restructuring of the repayment plan for any Loan you make and/or, in Kiva's sole discretion, any extension of the length of the term of such Loan in order to increase the chances that such Loan is repaid or that amounts of such Loan are repaid. Kiva will generally deem a Loan to be in default if Kiva determines that collection of funds from a Borrower for such Loan is doubtful or a repayment on the Loan is six (6) months past the originally scheduled repayment date (for any expected repayment, including interim repayments), although case by case differences may exist based on pending prospects for repayment of the Loan. In cases where a Loan is in default, and subject to the distribution timing provisions noted in Section 1.2 (Loan Collection and Repayment) above, each applicable Lender will have the option to recover whatever principal has been repaid by the applicable Zip Borrower up to that point. If for any reason less than 100% of any Loan you make is repaid, you agree that Kiva and the Trustees shall have no liability to you therefor, and you hereby release and forever hold harmless Kiva and the Trustees for any loss you may incur. You should consult with your accountant and/or tax advisors to determine the appropriate tax treatment of such a loss.
     
  13. HaveMilesWillTravel
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    HaveMilesWillTravel Gold Member

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    I'll ask my "tax advisor" -- TurboTax just arrived in the mail today. :)
     
  14. fcjapan

    fcjapan Gold Member

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    Ouch!
    I looked at Zip when it was Beta and I was shown the door (US-based lenders only).
    This feeling of no-love lingered. Love needs to be reciprocated.
    As a spurned lover, vindictive and slighted, I have no intention of returning to the altar.

    Good to see the trustee ranking system though, that 86% would turn off most people.
     
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  15. miles and smiles
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    miles and smiles Gold Member

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    There have been a number of Kenya loans, but they have been mostly for small amounts and they get funded quickly.
     
  16. miles and smiles
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    miles and smiles Gold Member

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    I have just made two more KivaZip loans to a worker cooperative in California that uses non-toxic cleaning supplies for cleaning homes. There are 31 loans fundraising at KivaZip right now:
    https://zip.kiva.org/loans
     
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  17. miles and smiles
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    miles and smiles Gold Member

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  18. canucklehead
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    canucklehead Gold Member

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    Wow, reading the stories of these borrowers really puts life into perspective! $75 loans, 12 week repayments, I hope the best for them!
     
  19. miles and smiles
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    miles and smiles Gold Member

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    Indeed, each of those women is taking care of two to five orphaned children. As much as I hope their farms and businesses thrive, I won't complain if I don't get paid back in full. Blessings on them all. And gratitude for the ease and abundance in my life.
     
  20. miles and smiles
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    miles and smiles Gold Member

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    In the past week I made two suggestions via email to KivaZip for improving their search function. Both emails were responded to within 24 hours and both suggestions were implemented within 48 hours. 1SmileyThumbsUp.gif

    With regular Kiva I have made similar suggestions and waited as long as 4 days for any kind of response and my suggestions have yet to be implemented months later.
     
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  21. fcjapan

    fcjapan Gold Member

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    On the other hand, Amy from the Atheists wrote
     
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  22. HaveMilesWillTravel
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    HaveMilesWillTravel Gold Member

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    Interesting. I didn't know that they don't use the same basic infrastructure than regular Kiva. I would have thought I would have one account with one available balance that can be used for both models.
     
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  23. miles and smiles
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    miles and smiles Gold Member

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    No, you have to have two separate accounts.
     
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  24. miles and smiles
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    miles and smiles Gold Member

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    KivaZip just posted a large number of small ($125 or less) short-term (3 months or less) loans from Kenya:
    https://zip.kiva.org/loans
     
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  25. miles and smiles
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    miles and smiles Gold Member

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    All loans on Kivazip are being matched right now. This is a great chance to have your money doubled:
    https://zip.kiva.org/loans
    P.S. I have no idea how long this match will be offered for. My guess is not long.
     
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