MicroKing Finance
Zimbabwe
Status Update - August 13, 2012
This spring, MicroKing's delinquency rates became abnormally high. As a result, the organization has decided to restructure part of its Kiva portfolio. It will be re-evaluating the repayment terms of certain borrower groups to ease the burden on clients who are having difficulty repaying their loans on time.
Unfortunately, it is impossible to change the repayment schedule of a loan once it is posted to Kiva. This means that clients may show up on Kiva as delinquent, even though they are not. This is becauseMicroKing is collecting less per installment than reflected on the website. For example, a loan that originally had a 12-month repayment term may be restructured to 18 months so that the client can pay less per installment.
MicroKing's decision to restructure will affect delinquency rates in two places on Kiva:
1. MicroKing's overall delinquency rate will be artificially high.
2. MicroKing borrowers may appear delinquent on Kiva when they are actually paying back on time per their restructured payment schedules.
MicroKing attributes repayment difficulty to seasonality and low-liquidity during the months of January, February and March in Zimbabwe. During this period, many people need to pay school fees, and agricultural workers must buy inputs like seed and fertilizer. The lack of disposable cash in the market hurts Kiva borrowers who are primarily employed in retail and cross-border trade.
Last updated August 13, 2012
Partner Description:
MicroKing Finance is one of Zimbabwe's leading microfinance institutions and provides savings and credit services to micro, small, and medium enterprises in Zimbabwe. As of the first quarter of 2011, the institution had 7 branches in Zimbabwe in Harare, Chitungwiza, Masvingo, Mbare, Mutare, Bulawayo and Gweru. MicroKing serves more than 10,000 clients with a portfolio in excess of US$7M.
The microfinance market in Zimbabwe is highly underdeveloped and continues to adjust to the new realities of the Zimbabwe economy. Prior to 2009, the Zimbabwe dollar was the only permissible currency for business transactions and was rapidly devalued from hyperinflation:
Year Inflation rate (consumer prices)
2002 134.50 %
2003 384.70 %
2004 133.00 %
2005 266.80 %
2006 976.40 %
2007 12,563.00 %
2008 11,200,000.00 %
In early 2009, the Reserve Bank of Zimbabwe formally allowed the US dollar to operate as a secondary currency and, practically, became the primary currency of transactions in the country. MicroKing and it clients almost exclusively transact in US dollars as of early 2011.
During the period of hyperinflation, microfinance loans in Zimbabwe were extended for extraordinarily short terms and generally to cross-border traders. As of early 2010, loans continued to be extended over short time horizons reflecting short term financing for portfolios, concerns about continued economic and political stability, and frequent borrower business orientations to quick turnover activities
MicroKing has a long history in Zimbabwe and was originally founded in July 2001 as a division of Kingdom Bank Limited, a commercial bank in Zimbabwe, to provide high quality financial services to the under-banked but rapidly growing Zimbabwean informal sector. Since 2005, MicroKing has been 100% owned by Kingdom Financial Holdings Limited and is registered as a microfinance institution through the Reserve Bank of Zimbabwe. The organization is financed by Kingdom Bank, a sister entity, as well as via loans from Triple Jump (Dutch microfinance lender) and Mercy Corps (on an agricultural value chain project).
Kiva loans at MicroKing are unique and are only provided to group loan clients. Kiva loans have the following attributes:
Loan Term: 3-24 months
Grace Period: 0-4 months
Interest Rate: 36% annualized declining balance
Fees: 5% upfront
Compulsory Savings: None
Pricing on Kiva loans is significantly reduced (40% lower than non-Kiva loans) but provided at levels that ensure MicroKing can remain sustainable.
Note: MicroKing's loans are guaranteed against institutional default (failure of MicroKing to repay Kiva lenders if the borrower repays MicroKing) by MicroKing's parent company: Kingdom Financial Holdings Limited.
This spring, MicroKing's delinquency rates became abnormally high. As a result, the organization has decided to restructure part of its Kiva portfolio. It will be re-evaluating the repayment terms of certain borrower groups to ease the burden on clients who are having difficulty repaying their loans on time.
Unfortunately, it is impossible to change the repayment schedule of a loan once it is posted to Kiva. This means that clients may show up on Kiva as delinquent, even though they are not. This is becauseMicroKing is collecting less per installment than reflected on the website. For example, a loan that originally had a 12-month repayment term may be restructured to 18 months so that the client can pay less per installment.
MicroKing's decision to restructure will affect delinquency rates in two places on Kiva:
1. MicroKing's overall delinquency rate will be artificially high.
2. MicroKing borrowers may appear delinquent on Kiva when they are actually paying back on time per their restructured payment schedules.
MicroKing attributes repayment difficulty to seasonality and low-liquidity during the months of January, February and March in Zimbabwe. During this period, many people need to pay school fees, and agricultural workers must buy inputs like seed and fertilizer. The lack of disposable cash in the market hurts Kiva borrowers who are primarily employed in retail and cross-border trade.
Last updated August 13, 2012
Partner Description:
MicroKing Finance is one of Zimbabwe's leading microfinance institutions and provides savings and credit services to micro, small, and medium enterprises in Zimbabwe. As of the first quarter of 2011, the institution had 7 branches in Zimbabwe in Harare, Chitungwiza, Masvingo, Mbare, Mutare, Bulawayo and Gweru. MicroKing serves more than 10,000 clients with a portfolio in excess of US$7M.
The microfinance market in Zimbabwe is highly underdeveloped and continues to adjust to the new realities of the Zimbabwe economy. Prior to 2009, the Zimbabwe dollar was the only permissible currency for business transactions and was rapidly devalued from hyperinflation:
Year Inflation rate (consumer prices)
2002 134.50 %
2003 384.70 %
2004 133.00 %
2005 266.80 %
2006 976.40 %
2007 12,563.00 %
2008 11,200,000.00 %
In early 2009, the Reserve Bank of Zimbabwe formally allowed the US dollar to operate as a secondary currency and, practically, became the primary currency of transactions in the country. MicroKing and it clients almost exclusively transact in US dollars as of early 2011.
During the period of hyperinflation, microfinance loans in Zimbabwe were extended for extraordinarily short terms and generally to cross-border traders. As of early 2010, loans continued to be extended over short time horizons reflecting short term financing for portfolios, concerns about continued economic and political stability, and frequent borrower business orientations to quick turnover activities
MicroKing has a long history in Zimbabwe and was originally founded in July 2001 as a division of Kingdom Bank Limited, a commercial bank in Zimbabwe, to provide high quality financial services to the under-banked but rapidly growing Zimbabwean informal sector. Since 2005, MicroKing has been 100% owned by Kingdom Financial Holdings Limited and is registered as a microfinance institution through the Reserve Bank of Zimbabwe. The organization is financed by Kingdom Bank, a sister entity, as well as via loans from Triple Jump (Dutch microfinance lender) and Mercy Corps (on an agricultural value chain project).
Kiva loans at MicroKing are unique and are only provided to group loan clients. Kiva loans have the following attributes:
Loan Term: 3-24 months
Grace Period: 0-4 months
Interest Rate: 36% annualized declining balance
Fees: 5% upfront
Compulsory Savings: None
Pricing on Kiva loans is significantly reduced (40% lower than non-Kiva loans) but provided at levels that ensure MicroKing can remain sustainable.
Note: MicroKing's loans are guaranteed against institutional default (failure of MicroKing to repay Kiva lenders if the borrower repays MicroKing) by MicroKing's parent company: Kingdom Financial Holdings Limited.
Repayment Performance on Kiva
Repayment Performance on Kiva| This Field Partner | All Kiva Partners | ||
| Start Date On Kiva | Mar 30, 2011 | Oct 12, 2005 | |
|---|---|---|---|
| Total Loans | $1,465,750 | $432,399,575 | |
| Amount of Raised Inactive Loans | $1,500 | $301,825 | |
| Number Of Raised Inactive Loans | 1 | 235 | |
| Amount of Paying Back Loans | $387,900 | $92,726,900 | |
| Number Of Paying Back Loans | 204 | 100,693 | |
| Amount of Ended Loans | $1,076,350 | $339,370,850 | |
| Number Of Ended Loans | 506 | 443,521 | |
| Delinquency Rate | 0.14% | 2.50% | |
| Amount In Arrears | $409 | $1,467,080 | |
| Outstanding Portfolio | $301,941 | $58,746,667 | |
| Number of Loans Delinquent | 3 | 11,059 | |
| Default Rate | 5.12% | 0.95% | |
| Amount of Ended Loans Defaulted | $55,077 | $3,227,945 | |
| Amount of Ended Loans | $1,076,350 | $339,370,850 | |
| Number Of Ended Loans Defaulted | 95 | 9,845 | |
| Currency Exchange Loss Rate | 0.00% | 0.02% | |
| Amount of Currency Exchange Loss | $0 | $77,519 | |
| Refund Rate | 0.89% | 0.94% | |
| Amount of Refunded Loans | $13,000 | $4,075,975 | |
| Number Of Refunded Loans | 5 | 4,599 |
Loan Characteristics On Kiva
Loan Characteristics On Kiva| This Field Partner | All Kiva Partners | ||
| Loans To Women Entrepreneurs | 82.70% | 74.00% | |
|---|---|---|---|
| Average Loan Size | $415 | $408 | |
| Average Individual Loan Size | $709 | $646 | |
| Average Group Loan Size | $2,201 | $1,747 | |
| Average Number Of Entrepreneurs Per Group | 5.4 | 8 | |
| Average GDP Per Capita (PPP) in Local Country | $400 | $3,348 | |
| Average Loan Size / GDP Per Capita (PPP) | 103.64% | 12.18% | |
| Average Time To Fund A Loan | 6.57 days | 4.68 days | |
| Average Dollars Raised Per Day Per Loan | $63.13 | $87.13 | |
| Average Loan Term | 6.22 months | 9.63 months |
Journaling Performance on Kiva
Journaling Performance on Kiva| This Field Partner | All Kiva Partners | ||
| Total Journals | 131 | 208,109 | |
|---|---|---|---|
| Journaling Rate | 22.42% | 40.14% | |
| Average Number Of Comments Per Journal | 0.01 | 0.11 | |
| Average Number Of Recommendations Per Journal | 0.01 | 2.66 |
Borrowing Cost Comparison (based on 2011 data)
Borrowing Cost Comparison (based on 2011 data)| This Field Partner | Median for MFI Peers in Country | All Kiva Partners | ||
| Portfolio Yield | 71.40% | 71.40% | 35.16% | |
|---|---|---|---|---|
| Profitability (Return on Assets) | 13.8% | 13.8% | -0.08% | |
| Average Loan Size (% of Per Capita Income) | 173.30% | 173.30% | 46.79% |
Country Fast Facts
Country Fast Facts- Country:
- Zimbabwe
- Capital:
- Harare
- Official Language:
- English (official), Shona, Sindebele (the language of the Ndebele, sometimes called Ndebele), numerous but minor tribal dialect
- Population:
- 12,084,304
- Avg Annual Income:
- $400
- Labor Force:
- agriculture: 66%; industry: 10%; services: 24%
- Population Below Poverty Line:
- 68%
- Literacy Rate:
- 90.7%
- Infant Mortality Rate (per 1000):
- 29.5 deaths
- Life Expectancy:
- 49.64 years
Field Partner Staff
Zvakanaka BasiraLlyod Bororwe
Mordecai Samuel Burutu
Lovejoy Chakwenya
Paul Chikore
Precious Chinyanga
Shamiso Dhliwayo
Gift Dube
Zibusiso Gumpo
Farai Gwela
Kudzayi Hove
Brian Jongwe
Brian Jongwe
Emelencia Machesa
Mercy Mapfuti
Pamhidzai Mhongera
Tawanda Mpoperi
Clive Mukucha
Sinikiwe Musikavanhu
Paddington Muskwe
Anna Mutembedza
Tambudzai Nyamundanda
Abba Paradza
Jenny Prosser
Leopold Ruswa
Bart Sitarz