Video Blog: Trek to Kanaan Village
16 February 2011 at 07:00 Lisa 11 comments
Are microfinance institutions (MFIs) exploiting poor borrowers by charging the excessive interest rates? Some people think so, especially after the publicity around Andhra Pradesh in India. Despite recent events, there has always been a widespread agreement that most MFIs should operate sustainably, keeping costs as low as possible, and charging interest rates high enough to cover these costs. However, even in these instances, rates hover much higher than your typical commercial bank.
One of the leading factors attributing to high MFI interest rates is administration expense. The cost to process numerous tiny loans requires a lot more legwork that cannot sustainably offset by economies of scale. Also, MFIs often operate in remote or low population density areas, were simple contact with the borrower can turn into long journey. The video below depicts this through my trek out to Kanaan Village in West Timor, Indonesia. Enjoy!
Lisa Skowron is part of the Kiva Fellow’s 14th Class and is currently working with TLM in Kupang, West Timor, Indonesia.
Entry filed under: Indonesia, KF14 (Kiva Fellows 14th Class), Tanaoba Lais Manekat (TLM). Tags: blogsherpa, BlogSherpa Indonesia, Indonesia, Kiva, Kiva Fellows, MFI interest rates, microfinance, video, west timor.
1. Agriculture Loans: What Makes Them So Different? « Kiva Stories from the Field | 16 September 2011 at 12:01
[...] some of the other Kiva fellows’ posts, rural loans can be a challenge to service, often involving lengthy treks along unpaved roads. Rwanda: Brand New Rice [...]
2. Surat Dari Indonesia | 12 September 2011 at 18:26
[...] posts from Lisa Skowron: Huh, There’s a West Timor? Video Blog: Trek to Kanaan Village Hear that? It’s Kupang Bemo Rap!! A Different Spin on Mobile [...]
3. West Timor Research Insights from a Boren Fellow « Kiva Stories from the Field | 1 May 2011 at 07:02
[...] posts from Lisa Skowron: Huh, There’s a West Timor? Video Blog: Trek to Kanaan Village Hear that? It’s Kupang Bemo Rap!! A Different Spin on Mobile [...]
4. A Different Spin on “Mobile Savings” « Kiva Stories from the Field | 15 April 2011 at 07:02
[...] Previous posts from Lisa Skowron: Hear that??? It’s Kupang Bemo Rap! Huh, There’s a West Timor? Video Blog: Trek to Kanaan Village [...]
5. Special Update from the Field: Beaches, Safaris + Cambodian Glamour Shots « Kiva Stories from the Field | 1 April 2011 at 00:14
[...] are nothing if not creative. We’ve gone to elaborate lengths to convince you that it can be hard to visit borrowers and that when we’re not trekking for miles we’re doing elaborate calculations or [...]
6. Here that?? It’s Kupang Bemo Rap!! « Kiva Stories from the Field | 24 March 2011 at 07:01
[...] Previous posts from Lisa Skowron: Huh, There’s a West Timor? Video Blog: Trek to Kanaan Village [...]
7. Last Week in the Field: “Christmas”, Trekking, Adversity & Good Company « Kiva Stories from the Field | 21 February 2011 at 02:17
[...] Video Blog: Trek to Kanaan Village Country: Indonesia / Fellow: Lisa Skowron (KF14) Lisa’s post is a perfect visual companion to Nila’s defense of “high” interest rates. Just wait for the part where a loan officer tries to drive a scooter through a river so he can (eventually) visit a client. [...]
8. Lisa | 18 February 2011 at 02:31
Thanks guys!!
9. Mei-ing | 17 February 2011 at 07:41
AWESOME!
10. Alexis Ditkowsky | 17 February 2011 at 01:10
Love this. Puts my whining about potholes and cows to shame.
11. Margo, Kiva Dev Intern | 16 February 2011 at 16:55
So eye opening to watch your visit to a borrower on video! Thanks for sharing your journey with us.