Kiva Winding Down Kenyan Operations of Peer-to-Peer Microfinance Lending Platform Kiva Zip

Monday, September 28, 2015

Kiva, a US-based microfinance intermediary, recently announced that it is winding down its peer-to-peer microfinance lending platform Kiva Zip in Kenya. Since its inception in 2012, Kiva Zip has enabled users to lend directly to microentrepreneurs in Kenya and the US. Loans in Kenya are distributed through M-Pesa, a mobile money transfer service. Most of Kiva’s loans differ from those through Kiva Zip in that they are intermediated by microfinance institutions. As of 2015, Kiva Zip had received deposits from approximately 8,000 direct lenders and disbursed the equivalent of USD 1.8 million in local currency to approximately 6,500 borrowers in Kenya. As of the same date, Kiva Zip reported a repayment rate of 91 percent [1].

In a statement, Kiva Senior Director Jonny Price cites a declining repayment rate and operational challenges as reasons for the decision to end the program. These include “delays in both loan disbursal and repayment processing [that have] kept borrowers waiting for loans and lenders waiting on notification of repayment” [1].

As of September 16, Kiva Zip has stopped disbursing direct loans to borrowers in Kenya, and the organization will refund loans from website users that are currently in the fundraising stage. Kiva Zip will continue to collect repayments on loans and will return these funds to lenders throughout the rest of 2015 “as they are received” [1]. The US operations of Kiva Zip will continue. From 2005 through 2015, Kiva raised funds totaling USD 755 million that have been disbursed by 269 MFIs and similar organizations in 83 countries, with a reported 98.6 percent repayment rate.

 

Source: MicroCapital (link opens in a new window)

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lending, microfinance, peer lending