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Kiva Review

Financial inclusion is the term used to describe the process of providing access to financial services such as banking services, credit, and insurance for people traditionally excluded from the formal financial sector.

Financial inclusion is important because it helps people to manage their money and plan for their future. It can also help to reduce poverty and inequality and promote economic growth. Government and financial institutions can help by making services more accessible to consumers and the masses.

Kiva is among the highly trusted and quality non-profit financial service providers that offer worldwide lending solutions for many deserving and underserved individuals. This article will explore the loan features, benefits, and how you can get started in applying for a Kiva loan.

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Written by: Aunt Piggyy

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Loan Amount

up to $15,000
4.7/5
4.7/5

Piggyy Rating

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Kiva
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APR:

Kiva does not charge interest on loans but Kiva Partners will charge interest.

Loan Term

up to 36 months

Est. APR

% varies

Loan Amount

up to $15,000
Pros
  • Provides financial inclusivity to underserved who require funding for their needs
  • Reach lenders from different countries to raise funds for the required loan amount
  • The service process on Kiva is convenient and comes with no hidden fees charged upon transactions
  • Lenders can grow their money by investing in several small businesses globally
Cons
  • Borrowers must wait until the fundraising is complete to collect the loan proceeds
  • The loan proceeds are received through the Kiva Field partners or PayPal
  • Limited Field Partners based in the Philippines
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Company Information

 

Kiva is an international non-profit organization (NGO) that was established in San Francisco last 2005 with the primary goal of helping underserved communities have access to funds to thrive. In particular, its financial services benefit farmers, students, artisans, and agri-entrepreneurs, who have limited access to credit services to start or expand businesses.

 

Kiva aims to serve underprivileged families and individuals working in different industries by giving easy access to high-quality, inclusive financial services. It further strives to extend financial help for other community causes, serving as a platform between lenders and borrowers.

 

The US-based NGO has been a pioneer in crowdfunding loans since its inception. Unlike other typical loan providers, Kiva serves as a conduit between the borrower and the lender by allowing borrowers who require cash to post the amount they need and look for lenders who can raise funds to meet their needs.

 

Kiva provides its financial services to its Field Partners, mostly microfinance institutions aside from schools, NGOs, and other social enterprises. These Field Partners assess all loan applicants, post their loan requests to Kiva, disburse loan proceeds, and manage loan repayments. On the other hand, Kiva Trustees endorse loans and vouch for borrowers who wish to apply for a direct loan on Kiva rather than through its Field Partners.

 

To date, Kiva has already managed to generate $1.76 billion in loan proceeds for 4.4 million loan borrowers living across 77 countries in the world. With a competitive 96.3% repayment rate, Kiva is also committed to providing reliable financial services contributed by 2.1 million lenders.

 

Its headquarters is at 986 Mission Street, 4th Floor San Francisco, CA 94103 USA, with satellite offices in Nairobi, Bangkok, and Portland. Although limited, Kiva’s offices remain widely operational, with its employees worldwide actively performing to achieve the company’s goal.

 

Ways to reach out to Kiva could vary depending on your concern. For general inquiries, you can reach out via voicemail at (828) 479-5482 or by filling out the form provided on Kiva’s official website.

 

You may expect to hear from their customer service support within 48 hours. Concerns involving loan payment processing may be accommodated by PayPal by contacting them at 888-221-1161 (Toll-Free US) or 402-952-8811 (International).

 

Products and Services Offered

 

Direct Loans

Direct Loans allow borrowers to receive loan proceeds from a lender directly. Once the amount the borrowers wish to obtain is available on Kiva, lenders may send the funds straight to the borrower’s bank account. However, only businesses based in the United States and social enterprises worldwide may avail of this kind of loan as of this writing.

 

No third-party or Field Partner would get in between the borrower and the lender upon the loan transaction, making it an unsecured loan. It’s likely riskier for lenders because they might not be able to collect the loan repayment on time.

 

Direct Loans are also most commonly offered with a 0% interest rate, but borrowers, specifically social enterprises, may still provide a minimum platform service fees in contribution to Kiva.

 

Loan Features

Loan Amount: up to $15,000

Loan Tenure: up to 36 months

Interest Rate: 0%

Estimated Time Approval: raise funds to 30 days

 

Partner Loans

Unlike Direct Loans, Partner Loans work with Kiva’s Field Partners. Borrowers who want this type of loan will undergo screening with Kiva’s Field Partners. If approved, the loan request will be sent to and posted on Kiva, which will help raise funds and find their perfect lender. 

 

Individuals in over 80 countries may avail of this loan. But most of the time, Partner Loans consumers will be required to pay interest on top of their loan, and this is in exchange for the cost Field Partners has spent on the provision of small loans among borrowers in rural areas and developing markets. 

 

The good thing, however, is that Partner Loans are moderated by Kiva’s trusted Field Partners, which, in turn, guarantees lenders repayments of loans under the agreed terms and conditions.

 

Negros Women for Tomorrow Foundation, Inc. (NWTF)

NWTF is a partner of Kiva in the Philippines that was founded as a non-government organization (NGO) in 1984 to help women to become self-sufficient, especially those who live in low-income communities in the province of Negros Occidental as the head office. Since then, NWTF expanded and now has 152 branches across the Philippine islands that include Cebu, Panay, Bohol, Samar, Leyte, Palawan, Batangas, Laguna, and Southern Luzon provinces. 

 

Two projects, Project Dungganon and Project Kasanag, have helped women in the Philippines start or grow their existing businesses. These projects aimed to provide credit assistance to micro-entrepreneurs in manufacturing, trading, buying and selling, and shop-keeping to enhance the quality of their lives and grow the local economy. 

 

Why Choose Kiva

 

Easy Application Process

Many borrowers often consider the amount of time spent applying for a loan. For individuals needing immediate cash, they need to find lenders quickly. Since Partner Loans are only available in the Philippines, if you wish to apply for a loan, contact Kiva’s Field Partners, which manages the loan process. 

 

Kiva becomes the platform for borrowers to apply for a loan and lenders to help individuals meet their needs. Its easy application process only goes through loan assessment, loan request, and finally, loan disbursement with loan repayment at the end of the transaction.

 

Wide Access to Funds

Applying for a loan can discourage some borrowers because of the stringent requirements and documentation that banks and lenders require. However, the lack of funds shouldn’t hinder individuals and communities from initiating projects that can improve the local economy. 

 

At Kiva, the core services are aimed toward the underserved, providing access to funds from lenders globally. With its crowdfunding business model, the loan amount that the borrower needs is shared or sponsored by different lenders worldwide.

 

Beneficial for Community Campaigns

Advocacies or community campaigns need more funds to finance their activities and spread awareness or causes. Most of them will resort to donations, but the more funds they have, the wider the reach to potential audiences. 

 

Kiva uses its platform to provide individuals and communities access to funds by posting your community causes and reaching out to lenders who might be interested in supporting you.

It helps causes for women, COVID-19, shelter, Kiva U.S., agriculture, education, refugees, technology, health, and many more. 

 

For instance, it enables individuals to look for a loan provider who will finance their growing business, which will help more people get job opportunities. Kiva is dedicated to providing financial services and helping improve people’s lives.

 

How to Sign Up

 

Are you interested in availing of Kiva loans? You can submit the loan application online. Here are the steps below on how to get started.

1

Visit the official website of Kiva.

Click “Find a Borrower”; or Click “Log In”

2
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Click “Continue Application” and log in with your credentials to proceed with the loan application.

3

After the application, the loan will go through the underwriting and approval process.

4

Once approved, the loan request will be posted on Kiva and may be publicly viewed by potential lenders.

5

Lenders crowdfund the loan for up to 30 days.

6

Borrowers repay the loan for up to three (3) years.

7

Lenders may use the repaid loan to fund new loans, donate, or withdraw money.

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Frequently asked questions

Do I need to fund the entire loan on Kiva?

Kiva allows contributions from different lenders, so you don’t have to fund the loan entirely. You may lend at least $25 worth of cash or more to your selected borrower. You can see all lenders at the bottom of the loan profile.

Do Kiva lenders earn interest on loan transactions?

While Kiva does not charge interest from borrowers, it charges minimum service fees for selected Field Partners whose role is to raise funds for the borrowers’ loans. Thus, Kiva lenders and Kiva alone do not gain interest on loan transactions. All fees are subject to careful assessment and monitoring of Kiva and its Field Partners. No unreasonable fee will be charged without the borrower’s consent.

What are Field Partners?

Field Partners refer to non-profit organizations, microfinance institutions, social enterprises, academic institutions, and many more that administer the loan application, loan request, fund disbursement, and up to the loan repayment of the borrowers. They vet borrowers and assess if they are eligible to get a loan. Their role is also to extend Kiva’s financial service to reach more individuals in dire need of cash. Aside from loans, they also provide entrepreneurial training and literacy skills among borrowers, especially those in remote places and developing markets.

Are Direct Loans better than Partner Loans?

Direct Loans differ from Partner Loans but share a fair share of advantages. Direct Loans would benefit borrowers who intend to obtain cash through their digital accounts. Partner Loans are beneficial for borrowers who would like to ask Field Partners for help in raising funds. Partner Loans are also advantageous for lenders comfortable with supporting individuals and communities with secured loans.

How can I receive my loan proceeds from Kiva?

If you are the borrower who successfully raised funds for your cause, Kiva will release your loan proceeds through the Field Partner that administered your loan transaction. Another way to receive the funds is via PayPal. 

 

Whether the loan disbursement period will be done before, during, or after your loan request was posted on Kiva depends on the Field Partner. In most cases, however, Field Partners give it before the loan is posted as a pre-disbursement fund that is allowed for the borrowers to use in case of urgent purposes. Even before a lender funds a loan, Kiva will send funds to the borrower. Lenders may still contribute and raise funds for the loan as the repayment of the loan will eventually be transferred to them.

What happens if borrowers fail to repay on time?

If the borrower fails to repay their Direct Loan on time, Kiva or the Field Partner may re-arrange the payment schedule depending on how much the borrower can afford to repay the loan. However, even with such lenient time, some borrowers still fail to repay their outstanding loans, and in this case, Kiva will tag it as loan defaults. Kiva will notify lenders about these loan defaults; unfortunately, the cash will no longer be refunded and will be considered the lenders’ loss. Field Partners may hold the right to restrict the specific borrower who failed to repay and not allow him/her for future loan transactions unless he/she would repay the previous loan.

Conclusion

 

Providing funds to finance others’ needs is one thing, but offering inclusive access to cash could be more rewarding. Individuals, business owners, and communities in different sectors can access funds from lenders worldwide through Kiva’s platform. 

 

Aside from being a conduit between lenders and borrowers, Kiva intends to uplift the community causes of other people as much as it improves the lifestyle of its borrowers. For lenders, it’s also an opportunity to grow their money while helping others develop their businesses or fulfill their dreams. 

Aunt Piggyy

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