Delays in Disbursements
Dear Lenders, Trustees and Borrowers,
This year has seen many important milestones for the Kiva Zip team. We recently passed 5,700 loans funded, and have distributed over $1.1 million to Kenyan borrowers. While this growth is exciting for the future, it’s also posed new challenges as we work to scale our processes to reach more people. We always appreciate your thoughts and communication, and we would like to address some of the issues you’ve raised around loan disbursement.
Delays in loan disbursement from Kiva Zip can happen for several reasons. You may be familiar with the Joyful Women Organization (JOYWO), an NGO in Kenya that has helped spur some of our recent growth. JOYWO’s individual borrowers are often among a group of borrowers whose funds will ultimately be distributed simultaneously. If a group of 10 borrowers are fundraising their loans, JOYWO requests that no funds be distributed until all the loans in the group have fundraised. This can result in loans sitting as 100% raised (but not distributed) for some time, which will occur until the rest of the loans in the group have been funded. We understand that this can be frustrating to our lenders who are anxious to see the progress of a loan project, and we will try to do a better job of highlighting these groups on loan pages in the future.
Another reason for delayed loan disbursement can occur when a borrowers M-PESA number is entered incorrectly. With limited resources on the Kiva Zip team, this can go unnoticed for quite a while before it is brought to our attention. Borrowers and trustees: we cannot stress enough how important it is to ensure this information is entered correctly! While we are working towards a more systemic solution to this problem, we appreciate your patience and vigilance in pointing out these issues.
An important note about loan disbursements this month: this past Tuesday, December 16, was the last day that loans will be distributed until January 6, 2015. Over the years, we’ve noticed a drop in repayment rates around the holidays. After much deliberation with trustees, we’ve decided that temporarily suspending disbursements for 3 weeks around Christmas and the new year is the best course of action for all parties. We understand that with the hustle and bustle of the holidays, not only are many businesses closed, but business owners can become distracted both socially and financially. This temporary measure relieves borrowers from the pressure of a new loan to repay during the holidays, and gives them time to focus on themselves and their family obligations. We’d love to keep disbursements going year-round, but for now we believe this is the best solution for borrowers, lenders and Kiva Zip.
Thank you so much for your patience during this phase of our growth. Again, we cannot express enough our appreciation for your continued support and communication. Whether you are a lender, borrower, or trustee, you are an integral part of our work. Your feedback will always be valuable to us, and I hope this has answered some of your questions. Thanks for an exciting year so far, and we can’t wait to see what 2015 has in store for us.
Kiva Zip Kenya Team