The borrower meets with the Field Partner and requests a loan.
The Field Partner disburses a loan to the borrower.
The Field Partner uploads the loan request to Kiva, it's reviewed by a team of volunteer editors and translators and then published on Kiva.org
Kiva lenders fund the loan request, and Kiva sends the funds to the Field Partner.
The borrower makes repayments and the Field Partner sends funds owed to Kiva. Kiva repays lenders.
The lenders can make another loan, donate to Kiva, or withdraw the money to their PayPal account.
70% of all lenders choose to make another loan!
Want more details? The Long Version
How Kiva selects its Field Partners
Kiva seeks to partner with a range of organizational types, including microfinance institutions (MFIs), social businesses, schools and non-profit organizations. When selecting our Field Partners, we favor organizations that excel in:
- Client protection, especially regarding the prevention of over-indebtedness, fair and transparent pricing, good collection practices and the security of client information
- Targeting and outreach that ensures vital services reach the unbanked, the under-served and the poor
- Innovative loan products, savings and non-financial services specifically tailored to the needs of the target group
- Measuring outcomes in the lives of client borrowers and savers
Many of our partners are chosen because in addition to lending money, they also offer services such as savings, financial literacy training and empowerment programs.
Why pre-disbursal helps the borrower
For Kiva borrowers, even a small delay in receiving money can have negative effect on their business. That's why Kiva allows our Field Partners to disburse funds as soon as they're needed, instead of waiting until after the loan is funded on Kiva. Not all loans on Kiva are pre-disbursed, but many of them are.
Kiva's volunteer editors and translators
Kiva takes very seriously the integrity of the data on its website. After loans are posted by Kiva's Field Partners, each one is reviewed by a member of Kiva's team of online volunteers. Over 350 editors and translators from all over the world prepare the loan text and review the loan details before publication.
This is an essential link in Kiva's process, because it ensures that loan profiles are clear and can help Kiva lenders make informed choices, and that Kiva borrowers are represented with dignity. It also provides an opportunity for review of each and every loan before it goes to the website. Volunteer editors and translators can flag issues related to missing information in the loan description, problems with the borrower picture, or inconsistencies in the loan profile that require clarification.
How Kiva's accounting works
To speed things up and to minimize the number of wire transfers being sent overseas, Kiva works on a net billing system. This means that, for any given month, we subtract the amount of repayments that a Field Partner owes to Kiva lenders from the amount that a Field Partner fundraises for borrowers on Kiva. If the balance is positive, that means that the Field Partner has raised more than they need to repay. We first use those funds to credit your lender account with the repayments due to you and the remaining portion is sent to the Field Partner. If the balance is negative, then the Field Partner has until the end of the month to send us a payment for the balance. As soon as we receive that payment, we use those funds to credit your lender account with the repayments due to you.