Status Update - July 3, 2014

CRAN has been paused from raising funds on the Kiva platform. Kiva remains engaged in discussions with other funders regarding the future of CRAN and is working to determine an appropriate repayment schedule. 

Status Update - June 19, 2013

Kiva has been actively monitoring CRAN throughout the partnership, including an on-site visit in late 2012. At this time, Kiva is engaged in discussions with other CRAN funders and will continue to monitoring CRAN's financial position. Further updates will be provided after evaluation of mid-year financials and portfolio indicators.

Original Partner Description:

Christian Rural Aid Network (CRAN) is a Christian development NGO striving to reduce poverty and its effects among disadvantaged groups and communities in rural Ghana. CRAN's vision is to see a Ghanaian society in which poverty and its concomitants are substantially reduced, if not completely eradicated. The NGO’s broad aim is to promote the socio-economic development of the rural poor through a focus on the economic and social empowerment of women as well as the right of children to quality formal basic education. Its work is based on the values of Christian motivation and obligation towards the development of the individual as a whole. Towards this end, CRAN staff works tirelessly to improve quality of life for the rural poor in a holistic manner (physically, socially, economically and spiritually) through projects in social development as well as a thriving microfinance program. The CRAN staff employs and promotes demand-led and self-help strategies towards rural community development and poverty reduction in a professional and qualitative manner, with a commitment to ensuring an improved quality of life for the majority of Ghana’s population who reside in mainly squalid and distressed communities. With Cape Coast as the NGO’s headquarters, CRAN currently operates in three regions of Ghana from eight branches, and has served over 20,000 loan clients in its microfinance program.

Update: June 3, 2011
 
As of June 1, 2011, CRAN had $64,123 in loans on Kiva in arrears, out of a total outstanding portfolio of $218,626. As a result, its delinquency rate as expressed on the Kiva website was 29.33%.
 
In the partner page update from May 2, 2011, Kiva clarified that settlements would be temporarily turned off until a balance of $42,492 in new capital has been built up and remitted to CRAN:
 
During the negotiation of the original Standstill Agreement, Kiva was paid $42,492 by CRAN, which we repaid to Kiva lenders.  In order to help ensure that CRAN has sufficient cash to continue to operate and ultimately repay all Kiva funds and to ensure fairness to all creditors, it was agreed that Kiva will remit that payment back to CRAN, by temporarily turning settlements off until a balance of $42,492 in new capital has been built up and remitted to CRAN.
 
Kiva will extend its ongoing policy of allowing CRAN to continue to raise funds on the Kiva website. Once the $42,492 new balance is accrued (as described in the preceding bullet point), as before, new funds raised will be used to make repayments on older CRAN loans via Kiva’s standard net billing process.
 
As of June 1, 2011, a balance of $42,492 in new capital had accrued and was remitted to CRAN.  Settlements has been turned back on, and as before, new funds raised will be used to make repayments on older CRAN loans via Kiva’s standard net billing process.

Kiva will update CRAN’s partner page with additional information as it becomes available to us.
 
Status Update: May 2, 2011

In 2010, Kiva and other creditors entered into a six month Standstill Agreement with CRAN (described in a previous status update, dated November 5, 2010).  As a part of this Standstill Agreement, these creditors, including Kiva, CORDAID and Tara Jane Trust, agreed not to take certain remedial actions against CRAN during a “standstill period” in order to give CRAN  an opportunity to recover from high levels of portfolio at risk.  
 
During the standstill period, Kiva allowed CRAN to continue raising funds on the website, however because of the factors that led to the need for a Standstill Agreement, Kiva indicated to lenders that loans to borrowers with CRAN were considered highly risky.  New funds raised during this period were used to make repayments on older CRAN loans via Kiva’s standard net billing process and Kiva did not receive any direct repayments from CRAN in respect of their loans (thus while some individual lenders were repaid during this period, the aggregate amount owed by CRAN to Kiva lenders did not change). 
 
Following the initial expiration of the standstill period, the standstill was extended.  This decision was made because the creditors who were party to the agreement agreed that CRAN had made significant progress in meeting the milestones and standards set forth in the Standstill Agreement but that additional time and data was needed to organize and set up a longer term restructuring arrangement among the parties.  In connection with making this decision, CRAN's performance under the conditions of the original Standstill Agreement was evaluated.  In particular, the original Standstill Agreement required CRAN to engage a turnaround specialist, strengthen management structures, pursue and report on progress (monthly) in recovering delinquent loans, tightly control delinquency on new loans to clients, and engage new external auditors.  
 
CRAN has made significant progress on meeting these obligations.  First and foremost, CRAN has successfully engaged an experienced microfinance specialist with Freedom from Hunger Ghana, who has worked with CRAN management to implement a new credit methodology called Credit with Education.  This microfinance specialist has also been elected to the CRAN board of directors.  Initial reports are that the new credit methodology is working well and  in addition to helping control delinquency, is helping CRAN reach rural populations that they didn’t serve previously.  
 
It is partly because of CRAN’s improved financial performance and the deeper social impact of loans made by CRAN that leads us to conclude that CRAN continues to be a good fit for Kiva and its mission, both from a financial and social perspective.  Further, we believe that continuing our funding relationship with CRAN will increase the stability and growth of the organization, increasing the probability that  Kiva lenders who have previously loaned to CRAN borrowers will be repaid.
 
Given the performance of CRAN under the original standstill agreement, CRAN and its creditors Kiva, Cordaid and Tara Jane Trust have entered into a new Restructuring Agreement, which gives CRAN further opportunity to improve its operations and thereby increases the probability of repayments to Kiva lenders.  
 
The following is a brief summary of the new agreement:
  • Creditors, including Kiva, will not require repayment of any principal until January 1, 2013.   After such time, the creditors will work with CRAN to develop a repayment plan considering the organization’s health. 
  • One of CRAN's creditors, CORDAID, has agreed to provide CRAN with additional funds, a portion of which will be in the form of a grant and the remainder in the form of additional loan financing. The making of these payments by Cordaid will be conditioned upon CRAN fulfilling certain management and operational milestones. 
  • During the negotiation of the original Standstill Agreement, Kiva was paid $42,492 by CRAN, which we repaid to Kiva lenders.  In order to help ensure that CRAN has sufficient cash to continue to operate and ultimately repay all Kiva funds and to ensure fairness to all creditors, it was agreed that Kiva will remit that payment back to CRAN, by temporarily turning settlements off until a balance of $42,492 in new capital has been built up and remitted to CRAN.
  • Kiva will extend its ongoing policy of allowing CRAN to continue to raise funds on the Kiva website. Once the $42,492 new balance is accrued (as described in the preceding bullet point), as before, new funds raised will be used to make repayments on older CRAN loans via Kiva’s standard net billing process.
  • CRAN’s founder and CEO will step down as CEO, but will remain with the organization as a member of the Board and will provide advisory support to CRAN.  A new experienced CEO is in the process of being hired.
Kiva will update CRAN’s partner page with additional information as it becomes available to us. 

Status Update: November 5, 2010

Earlier this year, Kiva entered into a six month Standstill Agreement with CRAN. Creditors, including Kiva, CORDAID and Tara Jane Trust, agreed not to demand cash repayments during this period in order to give CRAN sufficient time to recover from high levels of portfolio at risk.

These decisions were made in order to help maximize CRAN's chances of successfully regaining its footing, and repaying Kiva lenders' capital. In addition:
  • Kiva agreed to continue to allow CRAN to fundraise on the website, subject to clear warnings and disclaimers that have been placed on each loan, describing the higher risk entailed in lending to CRAN borrowers.
  • Also, Kiva agreed to allow repayments from CRAN borrowers to be allotted to lenders through net billing.
On October 11, 2010, Kiva and CRAN’s two other creditors agreed to extend the formal standstill for an additional two months. This was agreed upon in order to allow the creditors and CRAN to settle on a long-term plan to allow the organization to regain its footing.

Kiva will update CRAN’s partner page with additional information as it becomes available to us.

Status Update: May 10, 2010

Kiva, along with CRAN’s two other creditors (CORDAID and Tara Jane Trust), have entered into a six month Standstill Agreement with CRAN. Under the terms of this agreement, CRAN is obligated to engage a turnaround specialist, strengthen management structures, pursue and report on progress (monthly) in recovering delinquent loans, tightly control delinquency on new loans to clients, and engage new external auditors. Creditors, including Kiva, have agreed not to demand cash repayments during this period in order to give CRAN sufficient time to recover from high levels of portfolio at risk.

During the Standstill Agreement period, Kiva has decided to allow CRAN to continue raising funds on the website. New funds raised will largely be used to make repayments on older CRAN loans via Kiva’s standard net billing process. Kiva lenders are warned that loans to borrowers with CRAN are currently highly risky.

To date, CRAN has made significant progress on the conditions of the Standstill Agreement. Specifically, the organization has engaged a qualified individual associated with Freedom from Hunger Ghana to train CRAN staff on appropriate delinquency management and to reform the credit methodology. Collections on the most delinquent loans are in line with targets specified in the Standstill Agreement and delinquency is very low on loans disbursed under the new credit methodology. Long term, Kiva is encouraged at the level of involvement of the Board in the turnaround effort and the beginnings of a restructuring of management to ensure professionalism of the microfinance program.

Kiva will update CRAN’s partner page with relevant news as it becomes available to us.

Status Update: September 18, 2009

Following an onsite visit by Kiva’s Microfinance Partnerships Manager for Anglophone Africa and Portfolio and Risk Director, Kiva learned that CRAN has suffered significant deterioration in its overall portfolio quality revealing a portfolio at risk greater than 30 days of approximately 55% as of late August 2009 (approximately 55% of outstanding funds to borrowers have been overdue more than 30 days). While Kiva requires quarterly portfolio and financial reporting from all partners, Kiva staff learned onsite that previously reported figures, including first quarter figures for 2009, showed significantly lower delinquency as result of the fact that they only reflected a subset of the portfolio.

During the onsite visit, Kiva learned that loans have become increasingly overdue as a result of insufficient follow up on arrears cases by CRAN staff, an improveable credit methodology, significant external shocks to the local economy especially in the area of fishing in the Cape Coast area (where 5 of CRAN’s 7 offices operate), and seasonality correlated with crop cycles. These strains have been corroborated with anecdotal evidence from a recent Kiva Fellow who did not find any misrepresentation of borrower profiles on Kiva.

CRAN has put together a recovery plan since Kiva’s visit that focuses on monitoring loan delinquency more closely, revising cashflow projections, employing four additional Loan Recovery Officers to pursue severely delinquent loans in court, waiving additional interest on overdue loans, and ensuring data quality through more timely reconciliation. Kiva has spoken with management and the Chair of the Board of Directors to discuss the plan and is following its implementation closely.

Kiva has decided to allow CRAN to continue to post borrowers to Kiva, albeit at a lower rate, with the clear and full disclosure that these are very high risk loans. Kiva will continue to monitor this partner on an ongoing basis and will post further updates as we receive further information.

Repayment Performance on Kiva

    This Field Partner All Kiva Partners
  Start Date On Kiva Dec 6, 2007 Oct 12, 2005
Total Loans $3,830,100 $596,456,075
Amount of raised Inactive loans $0 $749,875
Number of raised Inactive loans 0 614
Amount of Paying Back Loans $347,400 $119,690,425
Number of Paying Back Loans 936 127,535
Amount of Ended Loans $3,482,700 $476,015,775
Number of Ended Loans 8,742 603,926
Delinquency Rate 98.41% 3.74%
Amount in Arrears $170,120 $2,923,153
Outstanding Portfolio $172,868 $78,164,901
Number of loanDelinquent 936 10,814
Default Rate 1.00% 1.12%
Amount of Ended Loans Defaulted $34,724 $5,345,655
Amount of Ended Loans $3,482,700 $476,015,775
Number of Ended Loans Defaulted 291 16,811
Currency Exchange Loss Rate 0.40% 0.09%
Amount of Currency Exchange Loss $15,325 $538,749
Refund Rate 0.85% 0.76%
Amount of Refunded Loans $32,675 $4,537,625
Number of Refunded Loans 76 5,064

Loan Characteristics On Kiva

    This Field Partner All Kiva Partners
  Loans to Women Borrowers 92.92% 74.20%
Average Loan Size $395 $418
Average Individual Loan Size $395 $656
Average Group Loan Size $1,289 $1,829
Average number of borrowers per group 5.1 8
Average GDP per capita (PPP) in local country $2,643 $3,427
Average Loan Size / GDP per capita (PPP) 14.94% 12.20%
Average Time to Fund a Loan 1.43 days 5.64 days
Average Dollars Raised Per Day Per Loan $276.67 $74.12
  Average Loan Term 5.04 months 10.37 months

Journaling Performance on Kiva

    This Field Partner All Kiva Partners
  Total Journals 4,827 297,569
  Journaling Rate 48.25% 42.38%
  Average Number of Comments Per Journal 0.06 0.08
  Average Number of Recommendations Per Journal 1.17 1.86

Borrowing Cost Comparison (based on 2012 data)

    This Field Partner Median for MFI's in Country All Kiva Partners
  Average Cost to Borrower 61% PY 53.00% PY 33.26% PY
  Profitability (return on assets) 4.3% 0.3% -1.45%
  Average Loan Size (% of per capita income) N/A 13.00% 40.88%

Country Fast Facts

Field Partner Staff

Gifty Addo
Rosemary Apusiga
Simon Atiatorme
Brian Banks
Chantal Victoria Bright
Jennifer Chizek
Michael Cmok
Mary Cronen
Richard D'Amato
victor dzikunu
Perpetual Eduah
Solomon Edziah
Cari Gagner
Cecilia Gameli
Monica Gillis
Tobias Hoelscher
Elwinder Singh Jasvir Singh
Maren Killackey
Caleb Lloyd
Sean McLafferty
christopher mensah-adator
Eric Mundschenk
mary narh
mary narh
Marissa Neale
Veronica Nuwodjuro
Jerry Onai
Adriana Rhine
Rosemary Sirois
Jenny Smith
Katherine Steussy-Williams
Friederike Terbeck
Jonathan Trenk
ben turkson
Benjamin Turkson
Gabrielle Tygh
jake wesely
Nicholas Zuzelo