Here's a sad story from Kiva. One of my loans has defaulted. Looking at Kiva's explanation it seems like it's not the fault of the individual guy I lent to but the "field partner". Of course, Kiva don't themselves seem to know the full story and are investigating but it sounds to me like the field partner had been reliable for a couple of years but suddenly went bad? Maybe a change of personnel? Maybe a sudden economic crisis in Togo?

Kiva haven't done a terrible job in informing me, but there are more things I'd like to see from them. Firstly, more of an analysis of the situation in Togo. Particularly, is there some economic or political circumstance that's likely to have influenced this? Or is it looking more like corruption in the partner?

Secondly, although Kiva uses the web to make connections between the lenders and recipients of loans, they still act as gatekeeper. Is there no way to hear the voices of the borrowers in Togo about their experience with this field partner Could Kiva not at least have a "comment on this partner" option on the page which borrowers could use?

Fascinating. I just went to Kiva and found that they have no loans available. Apparently there are more Kiva funders than micro-borrowers.

The site says this is likely to be a temporary outage. (The equivalent of the Twitter FailWhale). But what does it say about the global economy? Is it a sign of a world-wide depression that there are so few entrepreneurs borrowing? Or a "savings glut" that so many people are moving into micro-lending? Are the Kiva partners proving to be an inefficient bottle-neck? Are entrepreneurs too risky a bet for Kiva to consider them?

Interesting. I just made a micro-loan to someone in Nicaragua via Kiva and saw a warning about the No Pago movement.

Got some details here and here.

Couple of thoughts.

I'm clearly not usuring at this point. I'm not making any profit off my micro-loans. So that's no justification for not repaying me!!! ;-)

It's possible that the partners are. Don't know if Kiva allows or controls this. 28% does sound pretty high.

Here's an issue (from that second link) :

It’s now commonplace for people to take out a loan from one MFI [Micro Finance Initiative], fall into arrears and then go to another one and another, bailing themselves out of debt with one by getting into debt with two more. This phenomenon is generalizing because while a micro-financing operation may evaluate that a person has the capacity to pay, it might not be able to learn whether that client has other creditors, so its evaluation is inadvertently inadequate. For example, we had a woman in ASOMIF who was a kite maker and seemed to be doing very well, but in the end got in debt with all 19 of our affiliates

Quoted in the first link :

Many loan officers were incentivized based on the growth of their portfolio alone.

In other words, micro-finance as "sub-prime mortgage".

I've tended to feel sympathetic to Daniel Ortega. I'll be disappointed if this really is cynical patronage-politics.

Overall, micro-finance is clearly now big and influential enough to attract carpetbaggers : unscrupulous lenders, attacks from politicians who see it as a rival to their patronage, and even feckless borrowers. I guess that's a sign of success. Even if it means we have to take off the rose-tinted specs. when looking at it.

Blowing your ad. budget on Kiva investments. Cool.