Do Kiva’s partners charge interest to the entrepreneurs?
Yes. Self-sustainability is critical to creating long-term solutions to poverty and charging interest to entrepreneurs is necessary for microfinance institutions to achieve this. Our partners are free to charge interest, but Kiva will not partner with an organization that charges exorbitant interest rates. Kiva also requires partners to fully disclose their interest rates. Microfinance is an expensive business, which is essentially the reason small loans are not provided by large banks. While Kiva’s partners do not bear the cost of capital or the cost of default, they do bear transaction costs and currency risk. Charging interest to entrepreneurs enables our partners to bear these costs and achieve self-sustainability.
Related Questions
- If I live in the same city as one of Kivas U.S. field partners, can I continue living and working here while being a fellow with Kiva?
- If I live in the same city as one of Kivas field partners, can I continue living and working here while being a fellow with Kiva?
- Do Kiva’s partners charge interest to the entrepreneurs?
