Feb 10, 2010
By Gerard Niemira
Update on Recent Change in Default Protection
We wanted to let you all know about an exciting change that went live on Kiva at the beginning of this month. Going forward, when a Field Partner uploads a loan request, they will no longer be able to choose the option of covering borrower default.

For roughly a year, Kiva allowed its Field Partners the option to cover entrepreneur defaults. This meant that even if an entrepreneur you supported couldn’t repay their loan, their Field Partner could opt to pay you back anyway.

Kiva originally decided to offer this option because it was more efficient to manage repayments on an institutional level. But after receiving feedback from you, we’ve realized that Kiva lenders are actually looking for a stronger connection between the lender and the entrepreneur.

Letting lenders take on the risk of a loan allows lenders to tie their loan dollars to the success of the borrowing entrepreneur - providing a connection that’s much more personal.

This change also allows the repayment statistics that we show on Kiva to represent of borrower repayments rather than institutional repayments; giving you a better depth of information to help you choose your loans.

Note that if you made a loan before February 1st where loan defaults were covered, your Field Partner will still cover any default risks.
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Gerard Niemira

Gerard manages Kiva's Partner Product Team, working on tools for Kiva's Field Partners, staff and volunteers. His passion for social enterprise led him to Kiva in 2008 after a stint in Washington, DC working for First Book, a nonprofit organization that distributes new books to programs serving children from low-income households. Gerard graduated with a B.A. in History from St. Thomas Aquinas College in Sparkill, NY and now lives in Oakland, CA.

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