Eusebio Rosales Vilchez

Thank you for your loan. It has been disbursed to Eusebio Rosales Vilchez by EDAPROSPO in Peru. We are excited to watch this business grow. Over the next 5 months, EDAPROSPO will be collecting repayments from this entrepreneur and posting progress updates on the Kiva website.

Mr Eusebio Rosales’ shop lies on a corner several blocks away from the plaza of Matucana, a small town in the sierra about 3 hours east of Lima, Peru. Eusebio has lived here since 1970 and seen the town (and weather…he assures me there has been climate change since he’s moved here…where once seasons were defined, now the weather is all over the place) go through many changes. His shop has steadily grown to a comfortable size and now he works just to ‘pay the bills’. He has a daughter who teaches at a primary school (elementary to Americans, and my dear Watson) and who he gives some of the store’s profits as well.

When he started his business, Mr. Rosales sold potatoes and vegetables. He has since switched to candies, soda, bread, and canned products for two reasons. First, potatoes are heavy and once he reached a certain age, he did not want to have to lift bags of them every day. Second, vegetables have a short shelf life (you have to sell them relatively quickly before they go bad) while the products he sells now can sit there until sold without worry. While before he had to buy more vegetables twice a week to stock his store, now he only has to get more goods once a month. The switch to these types of goods, however, brings its own challenge to his business.

One of the major constraints for his business that microfinance can help him overcome is lack of access to capital. Every month, Eusebio buys more goods from distributors who drive around in their cars. They only take cash so he must pay up front. Thus, if he has not made enough in profits from the previous month, he cannot buy as many products which means he cannot sell as much the next month and a vicious cycle develops. Mr Rosales used your loan to overcome this constraint by having a large (for Matucana) supply of ready capital to avoid the trap I mentioned above.

Nevertheless, Mr Eusebio Rosales has told me that he does not expect to ask for a new loan, as he did not like the experience very much. While he was grateful for the opportunity to get access to additional capital, he did not like having to worry about paying someone back every month. As his business is already well established and he is not looking to aggressively increase his profits, he placed more importance on living tranquilly. As you can imagine, taking out a loan forces one to make a certain number of sales each month in order to be able to make your monthly repayment. While he may not have that comfort of accessible capital for his monthly purchases from distributors, he prefers that once-a-month worry to the daily worry of making enough sales to make a monthly repayment. Eusebio is thankful for the experience and now has better understanding of what he wants and does not want. If he was in a different situation in life and in his business, he may have wanted to continue his experiment with loans to better his situation, but now he is content with what he has. Thank you for allowing Mr Rosales this learning experience by giving him access to capital he did not have previously and the ability to experiment with how he conducts his business here in Matucana, Peru.

One quick note, EDAPROSPO is waiting until the end of loans to provide a journal update. In this way, they hope that you can get a better sense of the social impact of your loan. If you would like to lend to other businesses with EDAPROSPO, please click here for their currently fundraising entrepreneurs on Kiva.

During a routine audit of Field Partner EDAPROSPO, Kiva discovered a number of discrepancies between the information posted to the Kiva website and what actually occurred on the ground. Specifically, many loans uploaded to the website before December 2008 contain inaccurate loan amounts, terms and/or loan uses.

This is in violation of Kiva policy, and as such, as soon as we were alerted to a possible violation we placed EDAPROSPO on "pause." After placing them on pause, Kiva proceeded to execute a complete verification of every loan EDAPROSPO posted to the Kiva website; in total we examined 757 loans.

As a result of our audit, we have discovered that 52% of the loans posted to the Kiva website by field partner EDAPROSPO contain data inaccuracies. 98% of these inaccuracies pertain to loans posted to the Kiva website before December 2008, when EDAPROSPO was under a different management team. After significant management turnover at the end of 2008, almost all loans on the Kiva website contain complete and accurate information and these loans comprise only 2% of the total discovered inaccuracies.

You are receiving this email as we wanted to alert you that, after our verification efforts, Kiva cannot confirm that the specific loan you funded was actually disbursed. We can, however, confirm that the person you lent to is an EDAPROSPO borrower. Because EDAPROSPO has decided to guarantee all loans made on Kiva, you have continued to receive repayments on schedule.

Because the new management team has proven that they are committed to providing accurate and transparent information to the Kiva website, and because they have repaid almost all of the inaccurate loans on-time, Kiva has decided to re-open the Kiva-EDAPROSPO relationship. During this new "pilot" phase on Kiva, we will be working closely with the new EDAPROSPO team, including their internal and external auditors, to continually verify new EDAPROSPO loans posted to Kiva, and if we are alerted to any new inaccuracies we will pause their relationship with Kiva and follow-up accordingly.

If you have any questions, please visit Kiva's Help Center at http://www.kiva.org/about/help.