Journal entry for Salome Amondi
<< Back to JournalsSpecial Notice on SEED Development Group from Kiva Staff -- April 23, 2008
The business(es) listed above was posted on Kiva's website by our Kenyan Field Partner, SEED Development Group. Our Field Partners are independent microfinance institutions that lend to the poor for poverty alleviation. The role of a Field Partner is to screen each entrepreneur, post his/her profile on the Kiva website, disburse the loan, and collect loan repayments.
During an audit of SEED, Kiva discovered that SEED was not providing entrepreneurs with the full amount of their loans raised on Kiva. This violates Kiva's policies, so we have terminated our partnership with SEED.
Following this discovery, there was a thorough investigation of the situation. Ultimately, SEED defaulted on its entire loan portfolio with Kiva, which means that no further funds are collectible. To learn more about this particular situation and what Kiva is doing to prevent this in the future, please visit:
http://www.kiva.org/about/aboutPartner?id=32
Any repayment notifications you may have received up until this point are available to you as Kiva Credit. Please visit Kiva to re-lend, withdraw or donate this credit to Kiva.
Please realize that our audit uncovered a true exception to the norm; the vast majority of our Field Partners administer your loans with the highest integrity. Kiva will continue to audit Field Partners to monitor the integrity of your loan and to make our website a model for transparency in international development.
Thank you for your understanding and support of Kiva.
Supporting Enterprises for Economic Development (SEED Development Group)Posted by Shelby Clark from Ugunja, Kenya
Apr 23, 2008
Previous Comments
Having lived in many third world countries, I realize how easily this kind of problem can arise. Do the best you can. We came in knowing there are no guarantees...with human beings rich or poor, anywhere. THANK YOU for your good effort. We will continue to support Kiva happily.
Posted by Mark Wilson from Oakland, OR
Apr 23, 2008
Posted by Mark Wilson from Oakland, OR
Apr 23, 2008
Mark said it beautifully.
I am especially grateful that Kiva staff visited "my" SEED entrepreneurs in July 2007 and wrote journal entries so that I know that the funds that they did get were helpful. Thanks, Kiva, for providing a wonderful service for both the borrowers and the lenders.
Posted by Cathy Emrick from Durham, NC
Apr 23, 2008
I am especially grateful that Kiva staff visited "my" SEED entrepreneurs in July 2007 and wrote journal entries so that I know that the funds that they did get were helpful. Thanks, Kiva, for providing a wonderful service for both the borrowers and the lenders.
Posted by Cathy Emrick from Durham, NC
Apr 23, 2008
The truth is, that the fact that this type of thing doesn't happen more often is a credit to KIVA and it's field partners. This incident has not dampened my enthusiasm for the program. Keep up all the great things you do.
Posted by Mike from Vancouver, BC
Apr 23, 2008
Posted by Mike from Vancouver, BC
Apr 23, 2008
Agreed with the others. I think Kiva did a great job of discovering the situation and remedying it to the best of their abilities. There are always learning opportunities to be found. I wish the best for the entrepreneurs who were affected. My intention is to still support Kiva and it's partners in the vision to change the world one small business at a time.
Posted by Kathy from Minneapolis
Apr 23, 2008
Posted by Kathy from Minneapolis
Apr 23, 2008
Thanks for catching this. I hope this didn't negatively affect the entrepreneur we supported... Is there some way to find out what happened to her?
Posted by Ellen from New York
Apr 23, 2008
Posted by Ellen from New York
Apr 23, 2008
I agree 100% with each of the first five comments made above. I have made 70 loans and this is my first loan default. However, I will have two more loan defaults in the next month and all three defaults are from Kenya. In the future, I will be more aware of the country the entrepreneur lives to decide the risk of loan defaults.
Loans that change lives!
Posted by Jeffrey Fields from Norman, OK
Apr 23, 2008
I am sorry to heat about this. I wish that the Kenyan government would take this more seriously as we are trying to help its people. However, I am glad that KIVA was able to rectify the situation. I , like other previous posters state above agree that KIVA is doing a wonderful job and this is an exception rather than the norm. Keep up with the good work KIVA!
Posted by Nur Atiqah Abdul from San Francisco
Apr 23, 2008
I was wondering why Kiva didnt make the funds available to the lenders sooner. The loan term was 6months and Kiva finally released the amount after an year. I would have preferred to put the cash back in rotation sooner.
Posted by chetchow from LA
Apr 23, 2008
I agree with all the above comments. I've been wondering for months what happen to my hairdresser loan and now I know. Thank you KIVA for doing local audits on local partners. I hope my hairdresser got enough funds to get her business rolling.
Posted by Selina from San Francisco Bay Area
Apr 23, 2008
Posted by Selina from San Francisco Bay Area
Apr 23, 2008
Sorry this happened, but thanks for catching it.
I too note that, at least in my case, all three of the defaulted SEED loans had been paid back to about 85%, so I hope this default will not reflect negatively on the borrowers - I am guessing that they paid back what they received.
No matter what, it is still a good thing to do. I will be reinvesting my re-payments.
Posted by Lilly's Nonnie from Phoenix
Apr 23, 2008
I too note that, at least in my case, all three of the defaulted SEED loans had been paid back to about 85%, so I hope this default will not reflect negatively on the borrowers - I am guessing that they paid back what they received.
No matter what, it is still a good thing to do. I will be reinvesting my re-payments.
Posted by Lilly's Nonnie from Phoenix
Apr 23, 2008
Oh Shelby, I am so glad it is you that is there to help with this. What a tough situation and I hope that this was a great learning experience that can help entrepreneurs and Kiva to avoid this problem in the future. I hope to see you possibly this summer at the Kiva office? Take care and keep up all your amazing work.
Posted by Brooke Estin from Bangkok, Thailand and San Francisco, CA
Apr 24, 2008
Posted by Brooke Estin from Bangkok, Thailand and San Francisco, CA
Apr 24, 2008
These things are bound to happen from time to time and that's why it's good to know Kiva is taking its responsibilities seriously by auditing partner programs etc. I mean even big time lending institutions in the USA and the UK have defaulted lately so it's no biggy. In fact this whole incident has simply increased my confidence in Kiva as an organisation trying to do good things.
You'll still get my money! Well done guys!
Posted by Gordon from UK
Apr 24, 2008
You'll still get my money! Well done guys!
Posted by Gordon from UK
Apr 24, 2008
Keep going. This incident is but an obstacle, something to simply get around. Kiva does so much good and we all thank you for that.
We are in this for the long run with you!
Posted by Bill R. from Richmond, VA
Apr 24, 2008
We are in this for the long run with you!
Posted by Bill R. from Richmond, VA
Apr 24, 2008
Honestly, I was relieved when I read the email this morning. I had been thinking about Michael and his family for some time, and I feared the non-payment on the loan indicated distress, perhaps due to the recent violence in the country. As long as he and his family are okay, that is my main concern.
I do feel badly for other entrepreneurs in the country who may miss out on loans due to this matter. However, I personally concur with the thoughts of those who wrote before me. In no way has this incident affected my view about Kiva or the great works that the organization does. I'm excited about placing my money back in circulation.
Great job uncovering this issue before more people were adversely affected!
Posted by Berta from St. Louis
Apr 24, 2008
I do feel badly for other entrepreneurs in the country who may miss out on loans due to this matter. However, I personally concur with the thoughts of those who wrote before me. In no way has this incident affected my view about Kiva or the great works that the organization does. I'm excited about placing my money back in circulation.
Great job uncovering this issue before more people were adversely affected!
Posted by Berta from St. Louis
Apr 24, 2008
I am very sorry to hear about this and I hope this does not hurt the fellow I lent to through SEED. He had a great repayment record! Keep up the good work.
Posted by lisa mayberry from K.C.
Apr 24, 2008
I'm honestly glad to hear that this was the problem! Emily lives in an area of Kenya that has been subject to much violence and related migration recently-- now I can hope even harder that she's okay!
Posted by mitsya from Louisville, KY
Apr 24, 2008
Posted by mitsya from Louisville, KY
Apr 24, 2008
Keep up the good work Kiva and thank you for notifying us so promptly. We appreciate all that you do for others and we will continue to support you.
This is such a wonderful organization.
God Bless!
Posted by Nancy from Bradenton, Floridad
Apr 24, 2008
Sorry to disagree with the group.
I think KIVA should have had more of a handle on this before the loans were dispersed. It is easy to say after the horse is out of the barn, "Gee, the door was left ajar." Kiva should have done more than lip service as the quality of lender. I can understand one borrower defaulting. But in this case it looks like the lender was corrupt. And it looks like the need for KIVA to rush loans to the lenders, may have short circuited the quality review. It reminds me of the way the government does funding- don't worry about the fraud, we will make it up with more taxpayers and good intentions. Over the last year I've made over 150 loans, so its not the loss of $25. But it does leave a bad taste in my mouth. Kenya is off my list and I will have to re-evaluate my commitment since Kiva seems to have dropped the ball on this one.
Posted by Mike from Alexandria, VA
Apr 24, 2008
I think KIVA should have had more of a handle on this before the loans were dispersed. It is easy to say after the horse is out of the barn, "Gee, the door was left ajar." Kiva should have done more than lip service as the quality of lender. I can understand one borrower defaulting. But in this case it looks like the lender was corrupt. And it looks like the need for KIVA to rush loans to the lenders, may have short circuited the quality review. It reminds me of the way the government does funding- don't worry about the fraud, we will make it up with more taxpayers and good intentions. Over the last year I've made over 150 loans, so its not the loss of $25. But it does leave a bad taste in my mouth. Kenya is off my list and I will have to re-evaluate my commitment since Kiva seems to have dropped the ball on this one.
Posted by Mike from Alexandria, VA
Apr 24, 2008
Having lived and worked in several developing nations, I knew the risks going in. While it is unfortunate, these things occassionally happen. With this type of loan I follow my fathers advice, "if it gets paid back, great! if not just know that you were trying to make a difference". Now for my two cents, don't make a bigger difference than you can afford, but do make all the difference you can!
Posted by Casey from Orange Park, FL
Apr 24, 2008
Posted by Casey from Orange Park, FL
Apr 24, 2008
I can tell you from my own experience of working in a Bank that most loans default due to people falling on hard times and if they could pay the loan back, they would. There is always a risk to lending funds however, I would rather take the risk and know that someone has the opportunity to pull themselves out of poverty and provide for their families. I will continue to lend to Kiva.
Posted by Vicki Roth from Ontario
Apr 24, 2008
Posted by Vicki Roth from Ontario
Apr 24, 2008
Mike: I get the impression that the Executive Director of SEED stole the money. See short summary at www.kivafriends.org/index.php/topic,1979.msg27780.html#msg27780http://www.kivafriends.org/index.php/topic,1979.msg27780.html#msg27780. You're taking a whole country off your list because one man in that country is a thief.
You say "Kiva should have done more than lip service as the quality of lender." How would you want Kiva to make its system 100% proof against any theft ever occurring anywhere in the world?
Posted by Ingvar from Stockholm, Sweden
Apr 25, 2008
You say "Kiva should have done more than lip service as the quality of lender." How would you want Kiva to make its system 100% proof against any theft ever occurring anywhere in the world?
Posted by Ingvar from Stockholm, Sweden
Apr 25, 2008
The link in the above comment doesn't work correctly, here's a corrected link:
www.kivafriends.org/index.php/topic,1979.msg27780.html#msg27780
Posted by Ingvar from Stockholm, Sweden
Apr 25, 2008
www.kivafriends.org/index.php/topic,1979.msg27780.html#msg27780
Posted by Ingvar from Stockholm, Sweden
Apr 25, 2008
This is a darn shame, but not at all unexpected. I should hope you (Kiva) are taking appropriate measures to defunct any new corrupt organizations in the future. This is the risk when dealing with poor nations, the corruption temptation is HUGE! I am not at all the least surprised, and I will continue to work with Kiva because I believe in them as a whole. I was just wondering, what are or can be done for the unfortunate business folks, I know if the loans were being cut throated and then not paid back to kiva, then I am pretty sure they are being "loan-sharked" at an unbelievable interest rate to these poor folks, particularly in Kenya, where they have a rep for brutality. My thoughts and best wishes to the good people of that nation.
Posted by Rick Bolivar from Tampa, Fla
Apr 26, 2008
Posted by Rick Bolivar from Tampa, Fla
Apr 26, 2008
I was afraid that my borrower had defaulted and was sorry that he had not been able to make a go of his cobbling business, but now I see that it wasn't his fault.
I hope that Kiva will be able to find someone else to lend money in Kenya, as I see that a number of other people borrow more than once, and I'd like to see some of these people that got the short-end of the stick be given renewed opportunities.
I practice that old saying: don't lend money you can't afford to give. Kiva has always gotten money out of my charity allotment, so if someone defaults, oh well. This isn't money I ever planned on getting back anyways; just less money to lend to someone else.
Posted by Keri from Eagleville, TN
May 5, 2008
I hope that Kiva will be able to find someone else to lend money in Kenya, as I see that a number of other people borrow more than once, and I'd like to see some of these people that got the short-end of the stick be given renewed opportunities.
I practice that old saying: don't lend money you can't afford to give. Kiva has always gotten money out of my charity allotment, so if someone defaults, oh well. This isn't money I ever planned on getting back anyways; just less money to lend to someone else.
Posted by Keri from Eagleville, TN
May 5, 2008
There's no way to accurately monitor in detail all field partners--even with visiting auditors--and no way to anticipate all possible outcomes. Whether this field partner had anything to do with the political situation is unclear, but parts of Kenya have been devastated. More likely, this was an example of simple greed.
Whatever happened, I believe it's important to keep in mind that Kiva's default rate is in the low single digit range. Even more important, the organization continues to learn from mistakes and to improve its operations. In the 14 months I've been a part of kiva, there have been many changes for good..
The rating of field partners is just one example. This change, relatively new, is one that I personally welcomed. The only suggestion I have for kiva in this area is to start new field partners off with a rating of "3" rather than "5".
I remain pleased to be part of a movement to do good. Trying to be perfect would be paralyzing. Keep up the excellent work.
Posted by Jean from USA
May 9, 2008
Whatever happened, I believe it's important to keep in mind that Kiva's default rate is in the low single digit range. Even more important, the organization continues to learn from mistakes and to improve its operations. In the 14 months I've been a part of kiva, there have been many changes for good..
The rating of field partners is just one example. This change, relatively new, is one that I personally welcomed. The only suggestion I have for kiva in this area is to start new field partners off with a rating of "3" rather than "5".
I remain pleased to be part of a movement to do good. Trying to be perfect would be paralyzing. Keep up the excellent work.
Posted by Jean from USA
May 9, 2008
It seems that the Kiva agreement with the local loan administrators should state that they will be immediately dismissed and replaced if certain irregularities are found, like not disbursing all the funds to the businesses. When this situation occurs I would think the loan portfolio administration should be turned over to another local administrator, rather than closing up shop, defaulting on loans, etc. In this way it would seem operations in the country could continue, loans could be repaid, etc. Not that I think the matter should be swept under the rug, these problems do happen from time to time. Sub-prime loan crisis anyone?
I'm not surprised that the Kenyan gov't came down on the side of the local native as opposed to the US non-profit.
Posted by Ralph from Stamford, CT
May 17, 2008
I'm not surprised that the Kenyan gov't came down on the side of the local native as opposed to the US non-profit.
Posted by Ralph from Stamford, CT
May 17, 2008
Since the recipient (Mr. Jack Oguro) was likely victimized by the local lender, I'd very much like to know if a new lender has been located for him. I'd very much like to give him another chance to improve his business, and don't mind about the initial loss. Kiva is doing a good job in a difficult environment.
Posted by Jared from Staten Island
Jun 17, 2008
Posted by Jared from Staten Island
Jun 17, 2008
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