Loan Officers get schooled on Kiva
6 April 2010 at 09:18 leahespicea 12 comments
By Leah Gage, KF10, HOPE Ukraine
A couple weeks ago HOPE Ukraine invited me to their bi-annual national conference to give a presentation about Kiva. This is the sort of thing Kiva Fellows dream about. Fourteen seated and listening loan officers, whose sole purpose is to sit and listen to you talk about Kiva?! Obviously I jumped at the chance to take my third night train trip to Kiev to generally explain the ever-confusing Kiva “concept” to these hard-working individuals.
My job was made more difficult by my utter lack of Russian language skills, and my teeny-tiny awkward stance in a room full of burly Ukrainian loan officer dudes. But I found that everyone was really engaged in the presentation. They had lots of questions. After going over topics like gaining consent to take a client’s photograph and post it on the internet and strategies for gathering compelling borrower profiles and journal updates, to my dismay I realized that these loan officers did not understand how or why Kiva works.
HOPE Ukraine's loan officers stand to thank me after my presentation. Luckily, they thought I was kind of hilarious.
Most interactions between Kiva lenders and borrowers are relayed by the loan officer, an often invisible but hugely important player in Kiva’s operations. They’re inundated with Kiva-related requests – “turn in 4 borrower profiles by the end of the month;” “take better photos that clearly show your reluctant client’s face;” “try to get her to smile!” “ask more questions about your client’s personal life and tell us how the loan helped pull your client out of poverty!” The loan officer is the person who takes the photo you see, who gathers the information you read, who manages the borrower’s loan progress and makes sure you get paid back. Without the loan officer, Kiva simply would not function.
And yet, these guys did not know what Kiva was.
A slide from my powerpoint, depicting "You!" (BbI!) as the connection between HOPE Ukraine and Kiva
“Who are the Kiva lenders?” Well, anybody, I said. “What do you mean, anybody?” someone asked. Anyone can go on Kiva and make a loan. “Could I go on Kiva and make a loan?” Of course! “Is my client allowed to see her profile?” Yes! I encourage you to show it to her. “What’s the website again?” www.kiva.org “So how much do lenders make in interest?” They don’t make money off the loan. “Do they get paid back?” Yes, usually! “How?” Well, do you know what paypal is…?? (see “cycle of love,” above)
They were especially intrigued with the idea that Kiva lenders make loans for no profit whatsoever. I felt this was especially important to rephrase and explain to the loan officers. Kiva lenders do make a profit, I told them, but they don’t want money. Instead, they profit from the stories you tell and the photos you take. This helped explain to the loan officer just why I’m so curious about Nataliya’s dream to be an artist or whether Ludmila’s business helped put her son through university. These guys didn’t get what I meant when I kept asking them for “compelling stories.”
"Kiva lenders want to help people" - another slide from my powerpoint explaining why lenders lend
I’ll admit, the concept didn’t sink in for everyone. A lot of these guys think very much in numbers. It’s what makes them good loan officers with low rates of delinquency. Lending for stories is maybe not the most sound investment…
But several of the guys I talked to were so intrigued by this idea that anyone can make a loan to one of their clients on Kiva. At HOPE Ukraine, the loan officers take pride in getting to know each of their 100+ clients personally, so the fact that you, faithful Kiva lender, chose their client over any other made them feel pretty proud. And the “stickiness” of Kiva started to catch on – “connecting through lending” is not such a bad concept, after all.
Most loan officers’ incomes are not so far off from some of the clients they serve, so I can’t say for sure if any of the loan officers I met will be making a Kiva loan anytime soon. If and when it happens I promise to blog about it. If we had internet access in the presentation hall (which was a church classroom), I would have made one right then and there.
The next week when I went to Kamenka to visit greenhouse farmers, Yuryi the loan officer remembered me and knew the kinds of questions I was going to ask. He seemed to understand that I wanted to gain an understanding of the borrowers we went to meet and their businesses that went beyond loan repayment rates. He willingly spent hours with me and my interpreter while we were invited into house after house for Armenian coffee, Ukrainian Borsh, and Russian vodka. And he made sure to remind me when I forgot to ask certain questions of the borrowers that I had asked him like about certain farming methods or why Volodya and his family came to Ukraine from Armenia in the first place.
I’ve found interactions like these to be a great insight into just how remarkable Kiva is, and how reliant the process is on the Loan Officer. Remember the loan officer next time you make a loan on Kiva. As important as it was for the loan officers to understand Kiva lenders and why they lend, it’s perhaps equally important for Kiva lenders to understand how its possible for them to even make a loan to a borrower in the first place. It’s largely because of the loan officer. Chances are he was on the other side of that camera, possibly coaxing the borrower to smile a bit bigger or spending another minute to ask just one more question to create a more “compelling” borrower profile.
Special thanks to Sam Kendall who took all the photos during the presentation and who coined the phrase “Kiva Circle of Love”
Make a HOPE Ukraine loan officer proud today! To learn more about HOPE Ukraine, consider joining the HOPE Ukraine lending team.
Entry filed under: HOPE International - Nadiya Ukraine, KF10 (Kiva Fellows 10th Class), Ukraine. Tags: greenhouse, HOPE Ukraine, Kamenka, Kiev, Kiva, kiva circle of love, Lending in Ukraine is Sexy, loan officer, microfinance, microlending, Ukraine.
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3. Jane Braziunas | 18 April 2010 at 20:36
“Many MFIs do give incentives, which range from cash “prizes” for turning in timely borrower profiles, to percentage points on each Kiva loan.” Leah, do you mean that Kiva loans “compete” with other microfinance loan funds, which may offer cash to the loan officer to encourage the officers to get timely repayment of the loan as well as interest? I have read that some of these microfinance funds have advertised (at least before the ‘economic crisis’) their loan funds as very good investments, in the monetary sense.
4. leahespicea | 23 April 2010 at 20:45
Hi Jane, actually what I was talking about were incentive to the loan officer, who has to work extra hard to make some of their clients kiva borrowers by taking photos, gathering stories about them, etc. Their employers will often give monetary incentives, like percentage points on a loan or something. They’re definitely not encouraged to incentivize Loan Officers to have Kiva loans repaid faster or more “on time” – we’d never want a Kiva loan to “compete” with another, non-Kiva borrower’s loan.
Hope that makes sense… and thanks for your question!
Leah
5. Kennedy Maingi | 7 April 2010 at 22:22
Kiva has come to change the side of the community living in poverty but do not know where yo start…..With that short success story being told by another, a farmer, artisan, sculptor, potter…..is able to make his/er own story later in live…….KEEP IT UP ..KIVA
6. Rylan | 7 April 2010 at 13:41
I am confused and this may not be the best place to ask. What incentives does the loan officer have to complete the tasks required of him/her? Are they employed by HOPE International? Who provides business support or advice for loan recipients, certainly not loan officers? Do Leah and the other Fellows seriously have the time and capacity to juggle all loan recipients? (in terms of progress and sustainability)
Just curious. Thank you.
7. leahespicea | 7 April 2010 at 20:44
Hi Rylan, thanks for your question. The Loan Officers are the ones who provide business support and advice for loan recipients, not Kiva Fellows. A typical loan officer at HOPE Ukraine manages about 100 clients, usually 5-10% of whom are Kiva borrowers.
I’m glad you asked this question, because you’re right, it does seem like an awful lot to ask of Loan Officers. Many MFIs do give incentives, which range from cash “prizes” for turning in timely borrower profiles, to percentage points on each Kiva loan.
I sometimes see this extra work as unfair for the loan officers who I know work long hours just to manage their regular clients. But I also see this extra time and effort spent as a good thing, that maybe the Kiva “method” encourages overall transparency in microlending and allows loan officers to get to know their clients that much better. Interestingly, in HOPE Ukraine’s case, getting to know clients is one of the most important parts of being a loan officer, so when the fill out the Borrower Profile questionnaire, most loan officers know the answers to questions about their family, how they started their business, and their future goals already.
Thanks again for your question, let me know if there’s more clarifying that I or other Kiva Fellows can offer. And feel free to weigh in here, KFs!
8. Bryan Goldfinger | 7 April 2010 at 12:55
I love it Leah! I only wish I could have witnessed you work your magic on the burly Ukranians, im sure it was amazing!
9. Kati Mayfield | 7 April 2010 at 11:20
Big burly Ukranian men getting schooled by little Leah – you go, girl!
I really like the your interpretation of the Kiva investor’s “profit” … as I really push loan officers to collect the good journal info in my last month here, I am definitely going to sell it to them that way.
Thank you!
10. monicahamlett | 7 April 2010 at 11:07
How exciting Leah, and you shared the experience beautifully, you’re awesome!
11. Sam | 6 April 2010 at 22:09
I ought to copyright the circle of love phrase, and then give it to kiva for free. lol. This is such a great entry. Thank you Leah. Glad those big burly loan officers didnt get too big and burly for you.
12. Jeff | 6 April 2010 at 09:40
“Kiva lenders do make a profit, I told them, but they don’t want money. Instead, they profit from the stories you tell and the photos you take.”
Wonderful. I’d not thought of looking at it that way. I loan because I want to help people but had not considered that I was profiting from their photo and their stories.
But it’s true. The photo and description are crucial in my decision as to who to lend to. I pick one that makes me feel good when I make my payment. If I later get an email about how the borrower is doing then that’s a real payback.