Thanks so much for your email. Borrowers can only take out one Kiva loan at a time. We only partner with microfinance institutions with a social mission of lending to the poor in order to avoid pushing entrepreneurs further into poverty–that is the last thing we would want to do.

Sounds like you may have already found this information, but we do post some general information about microfinance on our website. We also recommend some books that can provide more information about microlending! ( http://www.kiva.org/about/microfinance) I want to make these recommendations, because information from experts in the field, will be far more valuable to you than what I have to write.

I know that you think that you are not discouraging people, but if your comments are left unresponded to and are read by people curious about the micro-financing process, they may be turned off the idea, and personally I don’t want that to happen.

I couldn’t find anything else to say that there was anything dodge about this particular company, and they do appear to be quite open about what they are doing, with plenty of links to infomation, so I guess it’s my own misgivings about micro-lenders. I that this company is probabaly the best of a bad situation.

I’m certainly not discouraging people from doing what they think is the right thing to do.

I like the face that many of these small businesses are being run by women (often alone) who are trying to provide for their families. Life is tough for single-parent families in Ireland alone, even before one factors in the sustained, generational poverty trap that these applicants are fighting against.

I think that the underlying purpose behind loaning $25 (which let’s face it is a price of a CD or a t-shirt) is noble.

To answer your questions:
The loans are not tax-deductible as they are not charitable donations - they are loans of your money. As part of the loan process, they request a donation of $2.50 to cover admin costs, this donation is tax deductible and this is clearly noted in the FAQ.

As for the interest rates charged by the field partners, you are correct that they are not currently shown on the website. However, if you access the list of field partners on Kiva.org and then select the specific one you are interested in, you can then click through to their MIX profile (The Microfinance Information eXchange) and see all their financial data. I read through the profiles of several of the field partners and in the documents was able to discover that the average interest rate charged is between 2.5 - 25%. If anyone decides to make a loan, then they can check out all the financial info and history of the lender on the MIX website (linked from Kiva).

I think you’ve mis-read the section of the FAQ that you speak about above: “They talk about the loaners having to pay a voluntary fee to take out a loan - but they already paying interest?”
The actual text is: To this end, we support ourselves principally on the “optional fees” our lenders voluntarily pay to the organization in addition to the loans they make.
That’s LENDERS, not BORROWERS - they ask the lender for an additional voluntary donation of $2.50 to cover admin costs - this is not charged to the borrower.

I was happy enough to go ahead, I figured that if extorbitant interest fees of 400% etc were being charged, then surely more loans would have been defaulted on? They have a pay-back rate of over 99%, which logically suggests to me that interest rates must be fair for people to have achieved that… Also, many of the clients are on their 3rd and 4th loan, so something must have made them choose the same company again and again…

I’m just terribly scared of microlenders I’ve seen first hand how much damage 400% loans cause people. While the concept is good there was too much in the FAQ section to put me off wanting to donate or investigate them any further.

Sorry to put a damper on it, but let me know what you think.