KF21 - Borrower Training

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  • 1. 1 Borrower Training Kiva Zip Orientation
  • 2. 2 Meet Mary Mary is a nurse from Busia, Kenya. She has managed and operated her own community clinic since 2009. It was her dream to operate her own business. However, in the beginning she faced many financial challenges. Bank loans had very high interest and she didn’t want to burden her family and friends with asking for money. But through the help of a trustee and a loan from Kiva Zip, she has grown her business and improved her life. Today, Mary has graduated to a second loan and given other nurses in her community the opportunity to apply for Kiva Zip loans.
  • 3. 3 Mary’s Profile on Kiva Zip! Endorsement: Mary’s trustee tells lenders why they endorsed Mary Repayments: Mary’s repayment schedule and actual payments Overview: Mary’s photo, description and loan purpose Lenders: Photo and profile of all Mary’s lenders Conversations: Updates among Mary, Mary’s lenders and Mary’s trustee
  • 4. 4 How Does It Work? KSH 3000 KSH 2000 KSH 5000 Lenders KSH 10,000 Mary KSH 10,000
  • 5. 5 …And, In Reverse! KSH 3000 KSH 2000 KSH 5000 Lenders KSH 10,000 Mary KSH 833 KSH 833 KSH 833 KSH 833 KSH 833 KSH 833 KSH 833 KSH 833 KSH 833 KSH 833 KSH 833 KSH 833 12 Weeks
  • 6. 6 What is Kiva Zip?  Kiva Zip is a website, NOT a bank or a microfinance institution  Kiva Zip provides 0% interest loans, NOT grants  Your loan is received and repaid through M-PESA  Kiva Zip does not fund your loan, lenders from around the world fund your loan through Kiva Zip’s website  Lenders are regular people who trust you with their money because they believe in you and your business  Kiva Zip is a community of people. Our platform is based on building relationships. Lenders and borrowers communicate through SMS
  • 7. 7 QUESTION 1: What is Kiva Zip? A. A bank B. A website on the internet which connects lenders to entrepreneurs like you C. A money lender Quiz Time!
  • 8. 8 QUESTION 2: The Money I Receive Through Kiva Zip Is… A. A 20% interest loan B. A loan, but it’s ok if I don’t pay back C. A loan that I am required to pay back Quiz Time!
  • 9. 9 5 Steps to Qualify for a Loan Must Be 18 Years or Older Must Be Endorsed by a Kiva Zip Trustee Must Not Have Large Outstanding Debt Must Have Personal M-Pesa Account Must Complete Free Loan Application
  • 10. 10 The Lending Process
  • 11. 11  Your trustee is an individual or organization that partners with Kiva Zip  Your trustee 'endorses' or recommends you for a loan because they believe you are of high character and credit worthy  Your trustee is your point of contact for all technical difficulties and questions about Kiva Zip  You and your trustee should maintain a good relationship throughout the loan cycle  If you repay well, your trustee may re-endorse you for repeat loans Role of Your Trustee
  • 12. 12 Who Gets Endorsed for a Loan? Trustee Endorsement
  • 13. 13 Loan Application Public Profile Put on the internet for anyone to see Photo Personal Story Business Description Loan Request Private Info Protected by Kiva Zip, and only available to borrower, trustee, and Kiva staff Surname Household Info Financial Info M-Pesa Number
  • 14. 14 Good photo: Shows face clearly Shows your business premise Shows loan purpose No passport photos Good personal story: Honest and accurate Where did you grow up, where are you today, what is life like, and what are your dreams? About your business How to Create a Good Public Profile? Good business description: Sound business plan When did you start your business, what does your business do, and what is your biggest business challenge?
  • 15. 15 QUESTION 3: What Is Required to Get a Kiva Zip Loan? A. Post my photo and story to the internet B. Post my MPESA # on the internet C. I must have taken out an MFI loan Quiz Time!
  • 16. 16 QUESTION 4: What is the Role of My Trustee? A. To pay back my loan if I can't B. To recommend me for this loan and provide me support throughout my loan C. To fund my loan Quiz Time!
  • 17. 17 Your Loan Is Fundraised!
  • 18. 18  Your first Kiva Zip loan can range from KSH 5,000 to KSH 10,000  You have a maximum of 3 months or 12 weeks to repay your first Zip loan  There is NO grace period for your first loan  The first loan MUST be repaid on a weekly basis  If you repay your loan on time and in full, you may qualify for a repeat loan that is larger and repaid over a longer loan term  You will only receive your loan if and when it is successfully fundraised on the internet AND when you send at least one comment to your lenders  Once your loan has fundraised on the internet, Kiva will send the funds directly to your M-PESA account. Kiva incurs the charge for sending these funds Loan Disbursement
  • 19. 19 QUESTION 5: How Is My Loan Funded? A. Lenders from around the world read my story and fund my loan B. My trustee funds my loan C. Kiva Zip staff funds my loan Quiz Time!
  • 20. 20 A. My trustee gives me cash B. Kiva Zip staff gives me cash C. Kiva Zip sends funds to my phone using M-Pesa Quiz Time! QUESTION 6: Once My Loan Is Funded, How Do I Receive It?
  • 21. 21 QUESTION 7: When Will I Receive My Loan? A. Only if and when my loan is fully funded by lenders B. After Kiva Zip approves my application C. After I complete my application Quiz Time!
  • 22. 22  Repayment begins 1 week after funds are disbursed  Repayments are made on the same designated day each week, the day on which your funds were first disbursed  Kiva will send you reminder text messages every week in the days before your repayment is due and on the due date  You incur the charge for sending repayments via M-Pesa  Repayments must be made with your personal M-Pesa account ONLY. Repayments sent from other accounts will not be acknowledged. Loan Repayments
  • 23. 23 Pay Bill Buy Goods Enter Business No. 890300 Enter Account No. KIVA MICROFUNDS Enter Amount $ KSH Send money Withdraw cash Buy airtime M-Shwari Payment Services My account Will send you an SMS confirming your repayment was received Safaricom+ M-PESA OkoaSim Loan Repayments Using M-Pesa Enter PIN 1234
  • 24. 24 Why Communicate with Your Lenders? Borrower updates: Frequent Detailed Updates on business Impact of loan Lender messages to borrower Trustee updates on behalf of borrower  It is a requirement to getting your loan disbursed!  They are regular people from around the world. They are people who trust you with their money because they believe in you and your business  They would like to know how their contribution to your loan has helped your business grow AND any challenges you face in your business  Send an SMS message to 0700 274 851 to communicate with your lenders from around the world! Please save this number in your phone as “Kiva”
  • 25. 25  You may not be able to apply for a second loan  Your trustee's reputation will suffer and its partnership with Kiva Zip may be terminated  Other people within your trustee's network or organization may not be able to apply for a Kiva Zip loan  You may build a negative credit history with Metropol that blacklists you and prevents you from receiving future loans with micro-finance institutions and banks  What should you do if you know that you cannot pay back your loan on time?  Communicate with your lenders immediately to tell them about your situation and that you will be late in repaying  Work with your trustee to set a plan for moving forward  Make partial repayments to your loan as you are able Consequences of Not Repaying Loan
  • 26. 26  Earn 'badges' of recognition for being a great Kiva Zip borrower. A badge is a 'virtual award' or trophy that appears on your profile as a picture  Badges improve the reputation of you and your trustee, determine your repeat loan amount, and increase your chances of being fundraised  Your trustee will be able to endorse more people from your community  You will improve your credit rating from Metropol Credit Reference Bureau, and can increase your chances of getting a loan with a bank or micro- finance institution in the future  You can qualify for a repeat loan that is larger than the first and repaid over a longer loan term Why Repay On Time and In Full? Repayment badge: Timely repayments Using your MPESA account listed on app Payment in full Connectedness badge: Updating your lenders Filling mid-survey and end-survey that Kiva sends you BADGES: Judge your repayments and updates to lenders Can be gold, silver, or bronze Gold badge=higher chance of bigger second loan
  • 27. 27 Loan Amount by Repayment Badge Loan Terms Loan # Gold Silver Bronze Duration Payment Options 1 ≤10,000 N/A N/A 2-3mo Weekly 2 ≤20,000 ≤15,000 ≤10,000 4-6mo Weekly 3 ≤30,000 ≤25,000 ≤20,000 6-9mo Weekly, Bi- weekly 4 ≤50,000 ≤40,000 ≤30,000 9-12mo Weekly, Bi- weekly, Monthly 5 ≤70,000 ≤60,000 ≤50,000 9-12mo Weekly, Bi- weekly, Monthly  Borrowers who pay back their loan on time and in full  Borrowers who send their lenders frequent updates  Borrower who maintain a good relationship with their trustee  Borrowers who fulfill obligations to their trustee Who Qualifies for a Repeat Loan?
  • 28. 28 QUESTION 8: How Do I Make Repayments? A. I give cash to my trustee B. I use my M-Pesa account to send my repayments C. It doesn't matter whose M-Pesa account I use to repay Quiz Time!
  • 29. 29 A. Tell my trustee B. Tell Kiva Zip staff C. Send an SMS to my lenders Quiz Time! QUESTION 9: What is the Best Way to Keep Lenders Updated About My Business?
  • 30. 30 QUESTION 10: What is Kiva Zip? A. I can't get another Kiva Zip loan B. My reputation won't be affected C. My friends will get a Kiva Zip loan Quiz Time! QUESTION 10: What Happens If I Don’t Repay or Update Lenders?
  • 31. 31Next Steps • Please visit https://zip.kiva.org to learn more about Kiva Zip. If you click on the Lend tab at the top, you can see profiles of other people requesting Kiva Zip loans, and you can see who, from around the world, is lending them money. • Once you have reviewed both links, please email your trustee so you can move to the next step of the loan application process.
  • 32. 32 Thank You! What Questions Do You Have?