Direct Loans

Q: Is Kiva lending peer-to-peer (P2P)?
A:  Kiva offers two types of lending opportunities: partner-facilitated lending (through a network of Field Partners) and Kiva Zip (lending that does not go through a Field Partner).
Partner-facilitated Lending
Kiva was born of the idea to connect people around the world through lending, something that had never been done before. At the time (2005), crowdfunding was a new and largely unheard of idea, and Kiva was the first to apply these concepts to microfinance.
We quickly realized that, given our resources at the time, we could be more efficient by partnering with microfinance institutions to screen borrowers, disburse loans, collect repayments and otherwise administer the Kiva loans. These organizations are also able to reach very poor populations and offer valuable nonfinancial services like savings accounts, financial literacy training and healthcare programs. This strategy of partner-facilitated lending has allowed Kiva lenders to fund loans to over a million borrowers since 2005.
Kiva Zip
In 2011, we launched a new initiative, Kiva Zip, which connects lenders directly to borrowers in Kenya and the U.S. Loans are made at 0% interest, borrowers are also vetted and endorsed by local trustees, and the funds are delivered over mobile phones or PayPal. The combination of local trustees and electronic delivery of funds has enabled us to help drive down the high fixed transaction costs usually associated with microloans. This works well with technologically and geographically isolated borrowers that wouldn't be able to access online platforms.
As a result, Kiva Zip has been able to offer the first entirely 0% microloans available directly to borrowers. The response has been tremendous: as of March 2014, nearly 2,500 loans have been made to borrowers, totaling nearly $3 million, all at 0% interest.
Kiva’s two lending options give lenders the choice in which type of loan they would like to fund:  our partner-facilitated loans, which reach many geographically isolated borrowers without access to technology, or Kiva Zip loans, which reach more plugged-in borrowers at a cost of 0% interest.

We continue to be inspired by peer-to-peer connections that the internet has made possible, and will continue to explore direct loans through our Kiva Zip initiative
Q: Is the money I lend on Kiva going to support the borrower I choose to support?
A: We get this question often, and here’s what we want to make clear: although your loan may be pre-disbursed, there is a direct 1:1 relationship between you and a borrower.  If you lend money to Tarek in Lebanon to purchase seeds for his farm, those funds are going to cover the pre-disbursed loan to Tarek. In addition, your repayment is 100% tied to his repayment. If Tarek makes his monthly loan payment toward your loan, you get that money back. If he doesn't make his monthly payment, we direct our Field Partners to let us know and you won't get repaid. This establishes a true financial link between you and the borrower you choose to support.
Not only does this facilitate a mutual interest in the borrower’s success, but it also plays a strong role in our Field Partners’ ability to make a substantial impact in lives and communities around the world; more and more, our partners are learning that Kiva lenders are often willing to accept the risk necessary to reach vulnerable populations and develop innovative solutions that previously weren’t possible. 
Q: When do Kiva's Field Partners disburse loans to borrowers?
A: Kiva allows our Field Partners to disburse loans at the time that makes most sense to them. For most of our Field Partners, it’s easier and more efficient for them to disburse the loan funds before posting the loan to the Kiva website for funding.
At first, we required that loan funds only be disbursed after a loan had been fully funded on the Kiva website. But over time, our Field Partners in Africa expressed growing frustration over how much extra travel and inefficiency this required. Their loan officers would often have to drive hours to meet rural borrowers, where they would approve new borrowers, disburse new loans and collect repayments. But with Kiva’s model, they wouldn’t be able to approve new borrowers and disburse new loans to them that same trip; they would have to drive back to their main office, post the loan and wait for it to fund, and then drive back to the rural village to disburse it much later.
We realized that if we allowed pre-disbursed loans, loan officers would be free to approve a new loan request and disburse the funds in the same visit. This enabled a huge increase in efficiency for our Field Partner’s staff and operations.
Kiva has always valued efficiency -- both within Kiva and with our Field Partners -- so we decided to relax our restriction on pre-disbursement. Instead, Field Partners are required to upload their loans to Kiva for fundraising within 30 days of disbursement.
By allowing pre-disbursement of loans, Kiva enables our Field Partners to disburse loans more efficiently and deliver the needed capital to borrowers that much quicker. 
Q: How long does it take for a pre-disbursed loan to begin fundraising on the Kiva site?
We require that our partners post their loans to the Kiva system within 30 days of disbursing the loan. In fact though, most loans get listed even faster than that: in 2013, the average time between the time a loan was disbursed and listed on Kiva was just 19.8 days.
In that time, a lot of work gets done. Once the loan has been uploaded to the Kiva system, our Review and Translation team gets to work translating the business description into English (if it’s not already). The team also checks to make sure the information is clear and consistent with our guidelines. If there are any questions around the business description, we’ll ask our Field Partner to clarify further before the loan is cleared to be listed on our website.
Q: How does Kiva ensure that borrower and loan details are genuine?

A: Kiva regularly sends volunteer Kiva Fellows and contractors (depending on location) into the field to verify that borrower and loan details on Kiva are accurate.
This borrower verification exercise entails interviewing a random sample of 10 Kiva borrowers from the Field Partner, ensuring the information on the ground matches the information on Kiva’s website. To accomplish this, Kiva verifies the identity of the borrower, the disbursement date, the loan amount, the loan term, the loan usage and the repayment information. We also check for things like over indebtedness, by seeing how many loans borrowers have with other organizations.
Some of our Kiva Fellows have blogged about their experiences conducting borrower verifications, which you can read about here.
If inconsistencies are found through this process, Kiva will work with the Field Partner to better understand and resolve the cause of the inconsistencies.