Luis works with his wife every day from 9:00 am to 6:00 pm. Thanks to the good service they provide and the quality of the products they sell, they have become recognized in the area. His enterprising spirit and desire to get ahead motivated him to seek the support of a loan, in order to invest it in the purchase of wholesale merchandise (pajamas and lingerie). He will also buy insurance for his motorbike, which he uses to provide taxi services. This will allow him to have a greater variety of things that satisfy the needs of his clients and he will be able to increase his sales and his income.
Luis dreams of seeing his business grow to become sustainable and profitable in time, affording him the ability to provide his family with a greater sense of well-being and quality of life.
More information about this loan
By funding this loan, you are promoting entrepreneurship in remote regions, including areas recovering from guerilla warfare in Colombia, and helping to reverse the rural exodus which occurred in the past decades when a the rural population fled their countryside homes for the safer cities.
This Kiva loan was created by Kiva's field partner Interactuar specifically for Kiva funding, in an effort to reach more borrowers in rural areas. Most of the Interactuar's lending operations are focused in urban parts of Medellin. But this loan product is designed to provide working capital to riskier agricultural businesses who have been traditionally excluded from the finance sector.
Important InformationThis loan is structured on Kiva as a bullet loan, which means a single payment is required at the end of the loan term. By Colombian law, Kiva's partner Interactuar is required to offer borrowers loans with a variable interest rate that fluctuates with the market rate. Because fixed monthly payments are applied first to interest and then to principal, Interactuar is unable to predict upfront what portion of each repayment would go towards the loan principal. This creates a challenge with Kiva's system, which doesn't allow for unpredictable principal payments, and can result in some Interactuar clients appearing falsely delinquent. To remedy this, the loan has an end-of-term repayment plan on Kiva, but the borrower will continue scheduled monthly repayments to Interactuar, who will then pass along the principal amount to Kiva lenders. This means that you may see repayments made on this loan throughout the repayment term, as opposed to receiving repayment in full at the end of the loan term.
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