|We got an e-mail from Kiva telling us that our loan to the Alejandrina Suarez Asencion's Group in the Dominican Republic has been defaulted. From what we understand there was fraud happening at Kiva's field partner FMSA by one of their senior management personnel.|
Basically someone took the money that was meant to help poor people get back on their feet and pocketed it. FMSA has release the following explanation: "In early 2009, FSMA's executive team uncovered a far-reaching internal fraud that cost the foundation heavy losses in terms of their portfolio, earnings and borrower confidence. The perpetrators of the fraud have been fired and the current management has spent much of the past six months trying recover from the heavy hit they sustained as an institution."
We certainly hope this "senior manager" goes to jail and the Kiva pursues with vigor this case and avoid a reputation as being "soft". According to Kiva they have "engaged our local counsel in the Dominican Republic to take the appropriate steps to help us make a claim for our proportionate share of the assets that remain with the organization as the liquidation proceeds."
Making microloans is not charity- looking at microloans as charity hurts everyone involved. Many people who are involved with Kiva are not wealthy, like us they have set a fixed amount for microloans and cannot replenish loans which have been defaulted.
So far we have made 5 loans, 2 have been paid back, one is paying pack and 2 have been defaulted. That's around 40% default rate which is unacceptable under the worst of circumstances.
We understand that there are heartless criminals and corruption everywhere - after all we're from New Jersey where corruption is legal, but if someone is taking our money we treat them as professionals.
For the near future we will not make anymore loans to agencies in the Dominican Republic.