In past years I've liked Kiva gift certificates as holiday gifts. They avoid the deadweight loss of buying an actual gift, have the customizability of a gift card, and people can choose whether to lend the money out or just withdraw it and spend it.
But I'm annoyed by their new policy which says basically if you let money sit there too long, they're going to appropriate it as a "gift" to Kiva. This only happens under the following narrow circumstances, namely when a lender:
For many Kiva Lenders, the best part about lending is re-lending; $25 can be used to help multiple entrepreneurs over time.Some lenders haven't caught onto this part of the lending process, and funds from loan repayments are sitting idle in their Kiva Accounts, neither re-loaned nor withdrawn ... It seems a shame to us. Unused Kiva credit sitting idly in the system isn't helping entrepreneurs in the developing world
Part of why this annoys me is that I recently tried to make some loans and was unable to. Each time the loan would show up first as needing money then as fully subscribed. I actually wasted an hour on this. There were other loans that needed money, but they weren't the loans that I was interested in making, so I let my money ride.
I think it's good that Kiva is selective about the organizations it partners with, and understand that sometimes they'll have more money than loans to fill. But then why take the money from me?
I don't think I'll be giving more money to Kiva any time soon. The only question I have is whether I'll be pulling my current money out now, or turning it over and letting it ride once more.
| Microcredit | Microlending
You've got a solid point about Kiva doing weird stuff with "your" money, but I think you're missing two important points about what this situation means for you and for Kiva.
1. These three conditions for appropriating your money are joined with AND, and they are pretty extreme. All you have to do log in once a year, even if you don't lend, to keep things status quo.
2. Kiva is in a weird place where the supply of lenders money is often greater than their ability to find and make good loans. If money from well-meaning slackers keeps building up on their balance sheet, they look bad to their investors and they look like they're not making enough loans.
I'm still not clear on why they don't just send the money back, but that's probably the obvious answer that it's more lucrative to keep it.
This Kwanzaa, maybe you should just give gelt.
Comment #1 :: link :: December 12, 2008 12:16 PM :: homepageThis is the kind of thing we used to struggle with all the time at DonorsChoose.org. First, how to keep the supply of projects in balance with the supply of donations. Too few projects and you've got the Kiva situation, where good money gets left on the table because there's nowhere to put it. Too many projects (relative to donations / loans) and the clients/recipients have a lower chance of getting funded, and you're more likely to have lots of partially-funded projects.
The situation with the gift certificates is also a tough one. As you might imagine, the accounting for micro-transactions and micro-philanthropy is a bear. I can see why they'd want to get the outstanding balances off their balance sheet, but you're right, it's not very "consumer friendly".
Comment #2 :: link :: December 17, 2008 11:05 AM
