Status Update - December 8, 2011:
Kiva has ended its partnership with Microfund Togo and changed the Fundraising Status to "Closed." This status update includes our efforts since the last update in February, 2011, and is our final update on this partnership.
In February 2011, Kiva marked as defaulted all outstanding loans with Microfund Togo, except the last 57 loans fundraised on Kiva, which were refunded (the previous status update on this page details the default and refund actions). As a result, Microfund Togo has a Default Rate on Kiva of 20.72%, representing $494,958 of losses. Microfund Togo has repeatedly refused to respond to Kiva's numerous communication efforts regarding this default amount, including efforts from Kiva's legal representation in Togo.
Kiva's policy is to consider legal options in a situation such as this, where the Field Partner is non-responsive to Kiva's requests for repayment despite the partnership agreement between Kiva and the Field Partner. In this case, Kiva investigated legal options in both Togo and California, and took legal steps which included retaining legal counsel in Togo.
Based on discussions with our U.S. and Togo lawyers and an evaluation of the legal and business contexts, Kiva has decided not to continue pursuing legal action against Microfund Togo at this time. For more information on the default risk of your loan funds, please visit Kiva's Risk and Due Diligence center.
Status Update - February 24, 2011:
Microfund Togo has $211,250 in loans on Kiva currently in arrears out of a total outstanding portfolio of $542,649. As a result, its delinquency rate as expressed on the Kiva website is currently 38.93%. As indicated by this delinquency rate, Microfund Togo is currently overdue in remitting funds to Kiva.
Because of the circumstances described below, this status update provides information on two actions Kiva is taking with respect to Kiva loans made through Microfund Togo.
Default of Loans:
In August of 2010, Kiva lowered Microfund Togo's risk rating to one star (the reasons for this adjusted risk rating are described in the status update previously posted on this page). Prior to the effective date of this change, $495,134.41 in funds which had been raised for Microfund Togo borrowers through the Kiva website had not been repaid (including the $211,250 in arrears mentioned above). In mid-September of 2010, Kiva made the decision to pause Microfund Togo's ability to fundraise new loans on the Kiva website (as described in the status update dated September 16, 2010).
Unfortunately, since such time and despite considerable efforts, there has been a complete lack of responsiveness by Microfund Togo's management to Kiva's repeated requests for payment, information and status updates. Kiva's policy is to default loans if we deem that either collection of the loan funds through our customary procedures (for example, without legal intervention) is unlikely, or if six months since the last repayment have passed, subject to case by case differences. In the case of Microfund Togo, due to the complete lack of responsiveness by Microfund Togo to any of Kiva's requests, we have deemed that the collection of the remaining unpaid loan funds is unlikely. As a result, these funds will be defaulted within the next week.
Kiva is working diligently towards recovering these defaulted lender funds at this time. Over the past few months, we have been actively investigating our legal options in both Togo and California jurisdictions. In the event that Kiva is able to recover any lender funds, Kiva will pay all such funds out to Kiva lender accounts on a pro-rated basis.
Refunding of Loans:
In August of 2010, when Kiva lowered Microfund Togo's risk rating to one star, Kiva was still receiving timely and verifiable reports on borrower repayments. As a result, Kiva allowed Microfund Togo to fundraise on the Kiva website under a one-star rating, and 57 loans were subsequently funded over the course of the next few weeks.
At this time, Kiva has made the decision to refund $47,515 in net funds to the Kiva lenders who contributed to these underlying loans. As a result, 56 of these lenders will see the complete return of their capital. The first of the 57 loans will receive a partial refund that will be shared with other Microfund Togo lenders.
The aforementioned loans should have been refunded earlier, but our existing processes did not anticipate this situation and there was a process breakdown. As a result, Kiva has reviewed its existing policies and procedures, and is instituting a new procedure that will work to help insure that loans are either refunded or settled out in a more streamlined timeframe, when Kiva is in a situation such as this where there is an emerging problem with a field partner.
We will keep this page updated with further updates as information becomes available.
Status Update - December 8, 2010:The delinquency rate for Microfund Togo loans on the Kiva website is 24.8%, as per Kiva's revised formula for calculating late repayments. This rate is up from 14% in November 2010.
As a reaction to this increase, Kiva's Regional Development Officer in West Africa has reached out to Microfund Togo, and we are continuing to work to obtain the outstanding delinquent balance owed to Kiva. We will continue to investigate this matter, and will provide updates as soon as we are able.
Status Update - September 16, 2010:We are continuing to gather information on Microfund's situation. In the meantime, as a precaution we are temporarily suspending Microfund's ability to fundraise new loans on the Kiva website. We will continue to update the Kiva lender community as we learn more.
Status Update - August 27, 2010:Microfund has been a Kiva Field Partner for 45 months. During that time, Microfund borrowers have paid back $1,583,800 in loans, while Microfund has maintained a 0% delinquency and default rate.
As part of routine monitoring, Kiva recently conducted a visit to Microfund in Lomé, Togo. During this visit our analysts were able to gather updated operational and financial information about the institution, as well as meet with key members of the staff and board.
The information gathered during this visit has led us to believe that Microfund’s original risk rating (4 out of 5) may no longer be appropriate given the level of risk posed by the institution. As such, we have reduced their star rating from 4 to 1 stars. This reduction is a reflection of a demonstrated level of financial performance, portfolio health, governance, and general operations that is of greater risk than our teams originally observed.
Microfund has been informed of our analysts’ findings, and their corresponding drop in rating. We will continue to facilitate Microfunds’ fundraising on the Kiva website, albeit at a lower level than before, and will keep this page updated as we receive updates from the field about their status of operations.
Partner Description provided by Microfund Togo:
The mission of MICROFUND is to provide financial and technical assistance to the economically active poor in rural, peri-urban and urban environments, who are unable to access the formal financial sector (most notably banks), by offering them high-quality financial services through autonomous and local cooperative structures.
MICROFUND is a microfinance institution created on March 21, 1998 with the aim of facilitating credit operations and savings mobilization. Its principal challenges are to combat poverty in Togo, to increase the revenues of marginalized populations in cities and the country, and to research financial partners to provide institutional support and loan funds.
Repayment Performance on Kiva
|This Field Partner||All Kiva Partners|
|Start Date On Kiva||Nov 6, 2006||Oct 12, 2005|
|Amount of raised Inactive loans||$0||$1,414,725|
|Number of raised Inactive loans||0||1,374|
|Amount of Paying Back Loans||$0||$137,653,725|
|Number of Paying Back Loans||0||166,702|
|Amount of Ended Loans||$2,388,625||$771,773,225|
|Number of Ended Loans||2,717||965,010|
|Amount in Arrears||$0||$7,711,499|
|Number of Loans Delinquent||0||21,563|
|Amount of Ended Loans Defaulted||$494,958||$10,384,180|
|Number of Ended Loans Defaulted||803||29,512|
|Currency Exchange Loss Rate||0.01%||0.46%|
|Amount of Currency Exchange Loss||$177||$4,150,252|
|Amount of Refunded Loans||$57,850||$5,827,650|
|Number of Refunded Loans||66||5,888|
Loan Characteristics On Kiva
|This Field Partner||All Kiva Partners|
|Loans to Women Borrowers||70.79%||75.02%|
|Average Loan Size||$876||$404|
|Average Individual Loan Size||$879||$636|
|Average Group Loan Size||$1,185||$1,790|
|Average number of borrowers per group||3||7.8|
|Average GDP per capita (PPP) in local country||$1,500||$5,917|
|Average Loan Size / GDP per capita (PPP)||58.40%||6.83%|
|Average Time to Fund a Loan||1.53 days||6.97 days|
|Average Dollars Raised Per Day Per Loan||$573.72||$57.97|
|Average Loan Term||15.07 months||11.09 months|
Journaling Performance on Kiva
|This Field Partner||All Kiva Partners|
|Average Number of Comments Per Journal||0.40||0.05|
|Average Number of Recommendations Per Journal||2.54||1.22|
Borrowing Cost Comparison (based on 2009 data)
|This Field Partner||Median for MFI's in Country||All Kiva Partners|
|Average Cost to Borrower||N/A||24.00% PY||26.49% PY|
|Profitability (return on assets)||N/A||3.1%||0.07%|
|Average Loan Size (% of per capita income)||N/A||188.00%||18.04%|
Country Fast Facts
- Official Language:
- French (official), Ewe, Mina, Kabye and Dagomba
- Avg Annual Income:
- Labor Force:
- agriculture: 65%, industry: 5%, services: 30%
- Population Below Poverty Line:
- Literacy Rate:
- Infant Mortality Rate (per 1000):
- 46.73 deaths
- Life Expectancy:
- 55.81 years