Guest Speaker: April 16, 2013

Last week our group welcomed our second guest speaker, a former Kiva fellow who answered some of our questions about microloans and how they work.

We learned that loans which are not fully funded within a month expire and are taken off the site. However, the borrower still receives the money, as the loans are actually funded in advance of them being posted on the Kiva site. Some borrowers in Muslim countries have a harder time getting their loans funded because they must cover their faces in photos.

People in rural areas often have little knowledge of the internet and don't realize that their bio and photo are being seen by so many people. Often when Kiva workers show them the website and that people from all around the world are funding their loan, they are amazed that people from so far away care about them and their business.

Some alternate forms of microloans are being developed, such as loans to fund university tuition. Kiva funds the University of Strathmore in Kenya -- ten to fourteen year loans of $11,500 with no repayment required until after graduation.

Microloans are also being used to fund ecofriendly businesses such as the production of solar powered cooking stoves by an African country. The stoves are cheap and environmentally friendly.

Offering microloans to women is a great benefit. Women often manage the household, so money given to them benefits the whole family. Women often have close relationships with other women, who will back up their loans.

Some of the interest rates in the microloan industry are very high. For example, the interest rates are 36% in Peru and 80% in Mexico. This is because of safety concerns - Mexico is considered a high risk location. Also operating costs are higher in relation to loan size, which results in a higher interest rate.

Loans Made!

     Due to incompatibilities between the Hunter bursar's office, which only releases money in the form of checks, and Kiva, which doesn't take checks, we've switched our loans to a smaller, competing microloans website, Zidisha, which has a greater focus on loans on the African continent, and of course accepts checks. The two lenders who the money eventually was eventually loaned to and their lender bios (self-written) are as follows:

"My name is Mamadou Fofana. I was born in Faranah in 1958. I have grown up in this town and I have completed Middle School over there in my uncle’s family. My uncle was a trader and he used to travel often to the nearby counties in this part of Guinea. He used to sell miscellaneous goods such as fabrics and shoes. It is at this time that I became interested in trading because when I was not studying he would ask me to sell merchandise in his shop. So I was studying and being a small retailer as well. Not only did I sell for my uncle but I was also selling second hand clothing on top of that. Later on, I started selecting shirts and shoes samples that I would send to school. I would sell them to the teachers and to some of my friends students . It is this business that I am pursuing today since I could not continue my studies due to family reasons. Just like my uncle did, I bring fabrics and shoes to Conakry and I sell them in the gold mines located in Kouroussa, Mandina and Siguri. Thanks to my school and to my uncle’s relations, I have no problems selling my merchandise."

Purpose of Loan: I would like to use this loan to buy a lot of merchandise each time there is a new arrival of fabrics and shoes on Medina’s market. Therefore, thanks to the help of the generous lenders at Zidisha, I will be able to expand my business, have more customers and generate more profits. About the business: "My business name is SPS SHOP is Located AT SHABARB SHOPPING CENTRE ,P.O BOX 14953-20100 Nakuru TELEPHONE NUMBER 0723454638.It is sole proprietorship,It was established IN 2003 . It is licensed under single business permit under the municipal council of Nakuru. My business deals with selling of all house hold goods and foods. Most of my customers prefer my business because of the services that are offered and as well the costs are standard depending on goods,quality and quantity products that I have comparing to other competitors and also availability of goods without lack, they need from lower class to higher class ,though there is more competitors it depends on how first I can deliver the services to them as well as quality goods The site where I am located there is no more competitors hence my services to my clients are good,first and reliable all the time,though you can here some complains but not more since there is no perfect person.but with Zidisha loan I will be perfect."

Loan Details: Total Size of Loan: $500 Repayment Term: 12 months Verified by: CAD "The Centre for Development Support (CAD) is a national NGO created in 2001 by Guinean organizations who have acquired demonstrated experience in a range of development sectors and with national and international aid organizations such as USAID, the PNUD, Africare, and the United States Foundation for Development in Africa (USADF)." "I am Andrew Nkurumah,I am single,I reside in Ronda and work as a businessman,I started a business shop as a shopkeeper in 2003, The first loan I received it greatly assisted me much I added enough stock to my business which assisted me to pay back my loan and I remained with the business running .By doing so I have been in business though it has taken me along period of time to grow as well as to change to another step is the business is just stagnant. You may have passion of starting or boost your business but you are poor financially, loan can highly boost you to move to another different level in business ." Purpose of the loan: "as soon as I will receive the funds I will buy enough stock of especially consumable goods such as sugar,cooking fat,soap,flour,bread and other goods like tissue papers,lotions of different types, households and as well add other new items like exercise books,fulls capes,envelops,chalks,pencils and biro pens. This will enable me to attract more customers and sell my goods first and pay my loan on time" About the business: "My current activity consists in selling fabrics and shoes. I bring them to the gold mines. Today, these places are the ones that are the most populated in Guinea. It is easier to sell goods there tan in the capital Conakry. Customers originate from all bordering countries such as Mali, Ivory Coast Senegal and Sierra Leone. All these goods are in demand. I sell mostly fabrics and men’s shoes. All I need for this business is a good address of an exporter of goods. All these people are located in the Madina’s big shopping center. When they get a new shipment, they let their main customers know. Once I know, I go and make my selection. I pay the merchandise cash up to the amount I am carrying and the wholesaler agrees to lend me the money for the rest. Therefore it is important to always have cash on hand in order to get goods because wholesalers only lend money for half the value of the merchandise you gave selected. My business is not very risky except for unsold merchandise which is very rare. The problem that I have is a lack of cash flow in order to be ready to cover my inventory purchases and transport costs to Conakry at all times. This is why I am asking for a loan from Zidisha." Loan Details: Total Size of Loan: $500 Repayment Term: 12 months Verified by: ZidishaDisbursed: March 20