Friday, November 14, 2008  

EditMe made its 160th Kiva loan today as part of our ongoing lending program. Since October 2007, EditMe has made between two and four new Kiva loans per week, and has recycled the 50+ loans that have been paid back into additional loans. Deferred revenue from customers' 6 and 12 month prepayments help to fund these loans. Additionally, EditMe donates 10% of each loan to Kiva for operating expenses.

So far, this represents a total outlay of about $4,000. Though it may not seem like much, this has helped 160 entrepreneurs in developing countries to start or grow their businesses. Of these 160 loans, there has been 0% default and 0.53% delinquency (that's 1/2 of 1 percent). Compare that to the SBA default rate of 17%.

Part of this success is due to the "group" nature of many of these loans. As Kiva explains on their web site:

Group loans are a powerful innovation in microfinance, because they are often less expensive for partners to manage in terms of time and resources.  In a group loan, each member of the group receives an individual loan but is part of a group of individuals bound by a 'group guarantee' (sometimes called 'joint liability'). Under this arrangement, each member of the group supports one another and is responsible for paying back the loans of their fellow group members if someone is delinquent or defaults.

EditMe's 160th loan went to the Pequeño Milagro (Small Miracle) Group. This is a group of women who operate small businesses selling food, clothing and services in Asunción, Paraguay.

Also see EditMe's Kiva lender page and previous updates #1, #2, #3 and #4.