Important changes to Kiva Zip’s default policy
As of November 1, 2014, Kiva Zip will implement changes to our default policy that will align more consistently with that of Kiva.org.
We will now mark as defaulted any loan where the total amount repaid is less than the total amount expected as of six months prior.
For example: If a loan of $2,400 has monthly payments of $200 over 1 year, the earliest this loan could be defaulted would be the 7th month of its repayment term. The earliest any loan can be in default is 6 months into the repayment term. The latest a loan could be in default is 6 months after the final repayment is due.
Previously, our policy was that any loan with a repayment made for 180 consecutive days would be defaulted.
This change in our default policy will only affects loans that are currently in arrears. In other words, if a loan at one time had cumulative repayments less than the amount expected as of six months prior but is now current, then it will not be defaulted.
Much like Kiva.org, a Kiva Zip manager will review all cases with a pending default and reserve the right to exempt loans if extenuating circumstances are found. We will initiate this review process on a monthly basis.
Every lender’s Kiva Zip portfolio will be updated to reflect outstanding balances as well as any amount lent that has been placed in default.
If you have any questions, feedback or ideas about the changes to our default policy, we would love to hear them. Please send them to contactZip@kiva.org, or write them in the comments section below.