THRIVE Microfinance is a for-profit Zimbabwean microfinance institution that utilizes the group lending methodology, lends only to women and provides auxiliary training before and during the lending process. 
 
Founded in 2012 by former Kiva Fellow Henry Bartram, the organization provides productive business loans. 
 
A unique lending approach:
 
THRIVE currently loans to approximately 25 groups with $190,000 outstanding. The organization issues productive business loans, for a maximum of $500 for the first loans. Thrive charges between 3% and 5% interest each month. For more information on the company's approach and reasoning for these rates please see the partner note below.
 
Zimbabwe suffers from a chronic shortage of available credit. From 1999 to 2009, the country suffered from hyperinflation. This reduced the value of the currency to zero and destroyed savings and capital. During this time, many financial organizations collapsed, and the ones that survived are still very weak.  
 
With Kiva’s support, THRIVE will be able to finance many more groups of women, providing opportunities for those who would not otherwise have access to capital and financial support.

A note from THRIVE:

THRIVE is an independent organization and does not exist within a larger network that can support its operations.  It receives no funding from governments or other charitable organizations.  It is run on the basis of sustainability so that it is not dependent upon the support of third parties for its survival.  If we fall, there is no one to catch us and we operate in a challenging environment where many similar organizations have fallen.
 
Any profits are retained in the business for the benefits of borrowers – no dividends or bonuses are paid.  We expect to be broadly break –even in 2014, our third year of existence.  We actively seek ways to reduce the cost to borrowers and recently introduced a lower rate so that borrowers borrowing less than $275, pay 3%/month compared with 5% for all other borrowers.  As we can reduce borrowing costs we will do so.
 
Zimbabwe is a high-cost economy.  Following hyperinflation, there is very little liquidity and our next-best alternative source of funds after Kiva costs us about 17% per annum.  THRIVE’s interest rates compare very well with nearly all lenders in Zimbabwe.
 
Costs to borrowers do not only consist of interest costs.  We spend a long time training borrowers and this is a key reason for our higher interest rates – we have to recover these costs.  As a result, we make fewer bad loans, which is demonstrated by the fact that our bad debts compare well with most other MFIs in Zimbabwe.
 
We believe that avoiding bad loans is a key responsibility.  We only lend for business purposes.  Bad loans are very costly to borrowers.  An inappropriate loan at low interest rates is more difficult to repay than an appropriate loan at a higher interest rate because the underlying income generation is not there.  The key to affordability for the borrower is not the interest rate (unless it is exorbitant) but whether the loan is to support a well thought-through business application that is likely to succeed.
 
Our training does not only help us to avoid bad loans.  It also helps our borrowers to manage their financial affairs more effectively.  We believe that the ability to make good financial decisions is a key life skill.  Even though we could reduce the interest rate if we reduced the amount of training, we do not believe that it is in our borrowers’ interests to do so.


A Note on Thrive’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 hardworking 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.
 
Factors that drive up the costs that this partner organization charges its borrowers include:
  • They provide very small loans. This leads to higher operating costs, since providing each individual loan presents a minimum per-unit cost.
  • 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 operate in a market where microfinance is highly underdeveloped. This means that finding, training and maintaining qualified staff is more expensive and difficult than in more-developed markets.
 

 
 

Repayment Performance on Kiva

    This Field Partner All Kiva Partners
  Start Date On Kiva May 8, 2014 Oct 12, 2005
Total Loans $108,525 $608,635,700
Amount of raised Inactive loans $0 $531,050
Number of raised Inactive loans 0 470
Amount of Paying Back Loans $108,525 $122,656,125
Number of Paying Back Loans 70 131,716
Amount of Ended Loans $0 $485,448,525
Number of Ended Loans 0 614,304
Delinquency Rate 0.09% 3.69%
Amount in Arrears $60 $2,968,440
Outstanding Portfolio $65,578 $80,418,434
Number of loanDelinquent 1 13,446
Default Rate 0.00% 1.10%
Amount of Ended Loans Defaulted $0 $5,358,572
Amount of Ended Loans $0 $485,448,525
Number of Ended Loans Defaulted 0 16,820
Currency Exchange Loss Rate 0.00% 0.09%
Amount of Currency Exchange Loss $0 $572,888
Refund Rate 0.00% 0.75%
Amount of Refunded Loans $0 $4,553,925
Number of Refunded Loans 0 5,085

Loan Characteristics On Kiva

    This Field Partner All Kiva Partners
  Loans to Women Borrowers 100.00% 74.22%
Average Loan Size $378 $419
Average Individual Loan Size $0 $656
Average Group Loan Size $1,550 $1,831
Average number of borrowers per group 4.1 8
Average GDP per capita (PPP) in local country $400 $3,422
Average Loan Size / GDP per capita (PPP) 94.54% 12.24%
Average Time to Fund a Loan 8.99 days 5.72 days
Average Dollars Raised Per Day Per Loan $42.05 $73.22
  Average Loan Term 6.93 months 10.42 months

Journaling Performance on Kiva

    This Field Partner All Kiva Partners
  Total Journals 0 303,934
  Journaling Rate 0.00% 42.46%
  Average Number of Comments Per Journal 0.00 0.08
  Average Number of Recommendations Per Journal 0.00 1.82

Borrowing Cost Comparison (based on 2013 data)

    This Field Partner Median for MFI's in Country All Kiva Partners
  Average Cost to Borrower 75% PY 59.00% PY 33.29% PY
  Profitability (return on assets) N/A N/A -1.37%
  Average Loan Size (% of per capita income) N/A 138.00% 38.28%

Country Fast Facts

Field Partner Staff

Henry Bartram
Daisy Sibanda