Transparency, transparency – also for borrowers?
2 June 2010 at 07:09 Anna Antoni 15 comments
By Anna Antoni, KF11, Indonesia
Kiva is still a new channel for information and action for those willing to look over the borders of their national and economic environment. We can’t predict the influence Kiva will have on microfinance and poverty…
In the long process of providing the information needed for receiving a loan through Kiva, transparency is of high priority but usually we talk about transparency for the lender. What about the borrower? Do they all know they are on the internet with a lot of personal information?
I realized that some of the borrowers I met didn’t know about their stories being posted on a public space like the internet to fund their loan. I was angry but without proper tools it is simply out of the reach of Kiva. The question how many of the borrowers around the world don’t know that they are “public borrowers” went through my head for a while.
Luckily Kiva is putting great effort into a tool to reach the goal of transparency for both, lenders AND borrowers.
The client waiver
The client waiver makes sure that the borrowers give their consent before their information is published on the internet and their loan is funded through lenders around the world, although they finally receive the money from a local microfinance institution. When I first heard that Kiva fellows should make sure that field partners use the client waiver to inform borrowers, I thought “no problem”! Well, I didn’t see the whole picture yet…Talking about this comprehensible document with the responsible persons at my field partner, I realized the complexity of this issue.
Perpetuating paternalism?*
The fear of the Kiva field partner where I serve was if borrowers know that their loan comes from abroad, they will think it is charity. They will not feel obliged to pay back their loan and it will cause long term problems even if the loss is not covered by the field partner. There is a damage industrialized countries have made through aid that goes far beyond support in crises, taking away something from a spirit of “I can do this- I can handle the challenges in my life!” which is so important in microfinance…but back to transparency.
It was no big deal to find a good solution with the field partner to handle this issue, so that borrowers really know what happens with all the information field officers ask them. It seems like Kiva provided a good tool to raise transparency for borrowers.
The whole process showed again how big the influence of Kiva can be. For most developing countries it is a shift of paradigm not to receive funds that either don’t have to be repaid or be repaid under heavy conditions. Putting a lot of effort into raising the transparency for borrowers and thus showing respect to all people participating in the mission of Kiva is more than important. Besides fulfilling the value of microfinance to help people to help themselves, it is the basis for a new approach to development.
*I borrowed “perpetuating paternalism” from Kiva fellow Alexis Guild, who recently wrote the related post “Loan vs. Donation: The Importance of Semantics”
Entry filed under: Indonesia, KF11 (Kiva Fellows 11th Class). Tags: Paternalism, Transparency.
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[...] Anna Antoni, companheira de Kiva baseada em Bali explica: The fear of the Kiva field partner where I serve was if borrowers know that their loan comes from abroad, they will think it is charity. They will not feel obliged to pay back their loan and it will cause long term problems even if the loss is not covered by the field partner. There is a damage industrialized countries have made through aid that goes far beyond support in crises, taking away something from a spirit of “I can do this- I can handle the challenges in my life!” which is so important in microfinance… but back to transparency. [...]
8. Global Voices in English » Indonesia: When women control their own investments | 11 June 2010 at 16:23
[...] Anna Antoni, a Kiva fellow based in Bali explains: The fear of the Kiva field partner where I serve was if borrowers know that their loan comes from abroad, they will think it is charity. They will not feel obliged to pay back their loan and it will cause long term problems even if the loss is not covered by the field partner. There is a damage industrialized countries have made through aid that goes far beyond support in crises, taking away something from a spirit of “I can do this- I can handle the challenges in my life!” which is so important in microfinance… but back to transparency. [...]
9. Victory | 10 May 2011 at 19:13
I’m impesserd! You’ve managed the almost impossible.
10. How are communities affected when women control their own investments? – Conversations for a Better World | 9 June 2010 at 11:52
[...] Anna Antoni, a Kiva fellow based in Bali explains: The fear of the Kiva field partner where I serve was if borrowers know that their loan comes from abroad, they will think it is charity. They will not feel obliged to pay back their loan and it will cause long term problems even if the loss is not covered by the field partner. There is a damage industrialized countries have made through aid that goes far beyond support in crises, taking away something from a spirit of “I can do this- I can handle the challenges in my life!” which is so important in microfinance…but back to transparency. [...]
11. Thomas | 4 June 2010 at 10:21
Hi Anna
Let me first express my appreciation for the time and money you devote to Kiva and it’s entrepreneurs. I also appreciate your concerns and your engagement to protect the entrepreneurs (I prefer that term over “borrowers”).
However – I would like to cite one of your colleague Kiva Fellow who wrote in his blog, that he prints the pictures from the lenders for each entrepreneur he visits, and he gives them the printout, where they see all these people all over the world caring about them and lending them money.
I am convinced the fact that Kiva makes a direct connection between lender and entrepreneur and that they would even be able to meet one on one, should the lender ever care to travel to the entrepreneur, in other words, that the money does not come from an anonymous, faceless pot of money, but from real people, this makes the difference.
The emotional, personal experience to learn, that people out there care about my wellbeing, is in my firm belief as important as the money itself.
I suppose (maybe too negatively) that the microfinance partner has also an interest NOT to be too transparent about the source of the money, as this could (in the opionion of the local MFI-management) lower the esteem the entrepreneur has for the MFI.
While this is completely unfounded – Kiva could never function efficiently without the local MFIs – and Kiva lenders co-finance the MFI by giving the money at 0% interest rate, while the MFI rightfully charges a reasonable interest on the loan, it seems understandable that the local MFI would prefer to appear as the real source of the money.
It is conceivable that entrepreneurs in very harsh environments with high criminality levels could come under pressure when it is known that they got money. My solution to this problem would be to restrict access to profiles and figures for an entrepreneurs to lenders only, once the credit got funded.
Keep up your great work as Kiva Fellow. Best wishes from Zurich!
Thomas
12. Jan & John, Kiva Friends | 4 June 2010 at 07:06
Thanks for this post. I think it is so very important for us all to be open in our dealings. I am willing to have my information given to the borrower. In return I love making eye contact and connecting with the person in the borrower profile. These human connections will go further to creating peace in our time than anonymous aid donations. I am glad Kiva and the partners continue to work on educating all of us. jan
13. katimayfield | 2 June 2010 at 13:22
As we work with our field partners to implement the new client waiver, this topic is so important. Simultaneously opening up the Kiva process to borrowers and emphasizing the fact that they still must repay the money they receive was a big challenge for me. Reading about your experiences with the same gives me an opportunity learn new ways to define and explain Kiva. thanks!
14. howard zugman | 2 June 2010 at 07:25
Hi Anna,
Thank you for the thoughtful post. My own view on any “arrangement” or “deal” or “contract” is that it has to be judged in its enitrety – not by its parts. I judge the “deal” as fair and of value if BOTH parties feel better off because of the deal. Using that criteria, I believe that most (perhaps the overwhelming majority) of the Kiva “deals” qualify as good deals. Maybe the borrower would prefer to not have his “deal” exposed on the NET (and perhaps this is true of the lender too) but accepts this as “part of the deal” because without the NET there might not have been a “deal” in the first place..
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