Kiva conducts regular, ongoing monitoring of all Field Partners, but only posts status updates here in response to relevant, major changes at the partner.
Pana Pana is a nonprofit civil association founded in 1990 in Nicaragua. The organization’s official name is Asociacion para el Desarrollo de la Costa Atlantica (Association for the Development of the Atlantic Coast) but they have always been known as Pana Pana which means “mutual help” in the local language.
Established in Nicaragua’s post revolution era, Pana Pana aims to foster economic development mainly in the regions that were affected by revolutions and war. Pana Pana is located in the Region Autonoma del Atlántico Norte (RAAN), a semi-autonomous region in northeast Nicaragua that was particularly devastated during the war. The RAAN was remarkably cut off from the rest of Nicaragua until recently and has a very high indigenous population (90%, made up of Miskito, Mayangna and Creoles). Until now, geographically, the RAAN remains quite inaccessible.
The organization’s earliest projects supported families to rehabilitate homes that had been destroyed and plant basic grains and crops for their own sustenance. In coastal areas, Pana Pana’s focus was on teaching artisanal fishing techniques and how to construct canoes.
Today, Pana Pana offers loans for commerce, housing, and a small number of agriculture loans. They also have a small social development unit that runs Pana Pana’s non-financial services. This includes technical assistance for housing loans and the development of a water and sanitation project.
Kiva lenders’ funds are used to support the loan products including a) communal banks, b) water and sanitation and c) agriculture loans. Kiva is thrilled to help Pana Pana improve the livelihoods of the communities in RAAN.
A unique lending approach:
Pana Pana is working with communal banks exclusively in areas that have no other access to microfinance including Waspam. Due to the extreme distance that loan officers have to travel, high operating expenses have dissuaded Pana Pana from expanding this program. By financing communal banks, Kiva would be serving clients that have literally no other access to loans, and at the same time would be lowering Pana Pana’s cost of capital so that the operating expenses for expanding this product become affordable.
Additionally, Pana Pana is currently in the process of launching a water and sanitation loan product. Lack of drinking water and lack of access to proper sanitation facilities is a huge problem in the RAAN. In conjunction with Water Aid, Pana Pana will train women on how to make environmentally friendly toilets that are appropriate for rural use. Then the women will actually sell the product to rural families who lack access to sanitation services. Loans would be for the female entrepreneurs to obtain and assemble the product and to support the women as they begin the sales process. Pana Pana also plans to offer more agricultural loans in areas where agriculture is the main source of income. Currently, Pana Pana is offering very few agriculture loans. Since the organization has such limited funds, they cannot fund high-risk initiatives that will require long loan terms and a one year grace period. Kiva funding would enable them to support rural families that produce tubers and plantains on communal land.
A Note on Pana Pana's Portfolio Yield:
We care deeply about the cost that Kiva borrowers pay for their loans, which is why fair pricing is a core part of our initial due diligence process for Field Partners. With Kiva's 0% capital, many of our Field Partners are also able to add additional value to their loans by reducing interest rates, offering non-financial services or creating new loan products.
For partners with reported portfolio yields or average APRs higher than 50%, Kiva takes steps to check that the high rates are justified by the impact of the loans. Kiva also verifies that the partner is not generating unreasonable profits or paying inflated salaries, and that the partner’s elevated operating costs are justified by its operating environment and/or the design of its loan products.
We seek to support loans that don’t impose an unjustifiable cost burden on hard-working borrowers. We nevertheless recognize that in order to reach vulnerable and excluded people with high-impact products and services, some of our partners incur high costs that necessitate charging higher-than-average costs to borrowers in order to allow for sustainability and scale. With this partner, Kiva capital is supporting a loan product that costs less than the partner's typical products.
Factors that drive up the costs that this partner organization charges its borrowers include:
- They provide very short term loans, which leads to higher operating costs, since each short-term loan generates a smaller amount of revenue than a longer-term loan.
- They provide more than just cash to many of their borrowers, including costly wraparound services such as healthcare, financial or business training, agricultural extension services, insurance or access to education.
- They work in areas with very poor infrastructure, such as limited roads. This increases the costs of finding clients and maintaining branch offices.
- They’re based in an area with a high cost of living and doing business. This is often due to the high demand and low supply of adequate housing and goods.
- They’re a small company or organization that hasn’t yet achieved the scale and efficiency necessary to reach sustainability and reduce pricing, but the impact of their services merits the opportunity to prove their business model.
- They pay high interest rates on the loans they take from banks and other funders, given the market in which they operate. This means they need more support from innovative sources like Kiva to reduce costs and pass savings on to borrowers.
- They work extensively in rural areas, which requires their employees to engage in costly travel to find and serve their clients.
- They operate in a region known to be at risk of natural disaster, which increases the cost of doing business.
- They operate in an area with a limited or poorly functioning banking system. This makes it difficult to access funding locally, and makes it more challenging to send and receive payments on loans from outside the country.
Repayment Performance on Kiva
|This Field Partner||All Kiva Partners|
|Start Date On Kiva||Oct 4, 2013||Oct 12, 2005|
|Amount of raised Inactive loans||$0||$481,500|
|Number of raised Inactive loans||0||394|
|Amount of Paying Back Loans||$72,425||$142,441,150|
|Number of Paying Back Loans||99||174,248|
|Amount of Ended Loans||$645,550||$793,770,275|
|Number of Ended Loans||986||994,484|
|Amount in Arrears||$1,845||$7,470,917|
|Number of Loans Delinquent||8||19,638|
|Amount of Ended Loans Defaulted||$11,245||$11,137,050|
|Number of Ended Loans Defaulted||43||31,506|
|Currency Exchange Loss Rate||0.00%||0.46%|
|Amount of Currency Exchange Loss||$3||$4,278,396|
|Amount of Refunded Loans||$0||$5,887,300|
|Number of Refunded Loans||0||5,924|
Loan Characteristics On Kiva
|This Field Partner||All Kiva Partners|
|Loans to Women Borrowers||76.44%||75.18%|
|Average Loan Size||$344||$401|
|Average Individual Loan Size||$581||$634|
|Average Group Loan Size||$785||$1,773|
|Average number of borrowers per group||3.3||7.8|
|Average GDP per capita (PPP) in local country||$4,800||$5,898|
|Average Loan Size / GDP per capita (PPP)||7.17%||6.80%|
|Average Time to Fund a Loan||11.58 days||6.94 days|
|Average Dollars Raised Per Day Per Loan||$29.74||$57.84|
|Average Loan Term||8.69 months||11.1 months|
Journaling Performance on Kiva
|This Field Partner||All Kiva Partners|
|Average Number of Comments Per Journal||0.00||0.05|
|Average Number of Recommendations Per Journal||0.00||1.20|
Borrowing Cost Comparison (based on 2014 data)
|This Field Partner||Median for MFI's in Country||All Kiva Partners|
|Average Cost to Borrower||58% PY||27.00% PY||26.05% PY|
|Profitability (return on assets)||5.1%||0.9%||-0.31%|
|Average Loan Size (% of per capita income)||N/A||40.00%||17.73%|
Country Fast Facts
- Official Language:
- Spanish (official) 95.3%, Miskito 2.2%, Mestizo of the Caribbean coast 2%, other 0.5%
- Avg Annual Income:
- Labor Force:
- agriculture: 31%, industry: 18%, services: 50%
- Population Below Poverty Line:
- Literacy Rate:
- Infant Mortality Rate (per 1000):
- 20.36 deaths
- Life Expectancy:
- 57.48 years
Field Partner StaffMario Alberto Bolanos Alaniz
Jefty Borst Chow
Tania Hayde Diaz Rivas
Licha María Espinoza Padilla
Luis Wilson Guill
Lucila Law Blanco