In our previous update dated March 3, 2010, we mentioned that Kiva would continue to evaluate all available options to recover lender funds from Ebony Foundation. Kiva has looked into taking potential legal action against Ebony Foundation to recover funds and has met with legal counsel in Kenya to evaluate this option. Based on our research, information available to us regarding other creditors who have pursued legal recovery of funds owed to them by Ebony Foundation, and other considerations, we feel it is not prudent for us to pursue legal or other action against Ebony Foundation.
We would like to thank all our lenders who have made loans to Ebony Foundation and we appreciate your patience as we worked through these issues.
Update: March 3, 2010
As noted on October 16, 2009, all Ebony Foundation loans on Kiva are in default and Kiva staff continue to judge the likelihood of recovering repayments from Ebony Foundation to be very low. However, Kiva continues to evaluate all available options to recover lender funds governed by a signed Promissory Note with Ebony Foundation.
Following MyC4’s public notice regarding Ebony Capital Enterprises, Kiva staff in the field and in San Francisco have investigated this attempt at receivership and recovery. Kiva understands that MyC4 had originally signed their contract with Ebony Capital Enterprises which, while managed by Ebony Foundation’s Executive Director (James Maina), is a separate legal entity from Ebony Foundation (the entity Kiva partnered with). We have spoken with the appointed receiver and do not believe that Kiva can join this receivership process given that it is with a different legal entity (Ebony Capital Enterprises) than Kiva’s counterpart (Ebony Foundation).
Kiva continues to work hard on behalf of lenders, though we may be unable to share all details of our efforts, especially during the process of negotiations, in order to help ensure maximum recovery of Kiva lenders' funds.
Update: October 16, 2009
After continuing non-payment to Kiva, all active Ebony Foundation loans have now been defaulted. Kiva will continue to pursue recovery of funds on these loans and apply funds proportionally to lenders if and as funds are received. However, Kiva staff have judged the likelihood of recovery on these loans to be sufficiently low such as to update the loan status of these loans to “defaulted”.
Ebony Foundation partnered with Kiva in November 2006 and, through the end of December 2007, the organization raised $650,950.00 on Kiva for borrowers. From December 2007 and through the beginning of early 2008, Kenya suffered the devastating effects of post-election violence and Ebony Foundation’s target area, Nakuru, was severely affected. Ebony Foundation reported that approximately 58% of their Kiva portfolio was unrecoverable. As the organization worked to continue to assess the impact to clients and get operations back up and running, updates and repayments to Kiva were sporadic. Ebony Foundation promised to provide updates on all clients and, in order to ensure repayment to Kiva lenders, signed a Promissory Note including a repayment schedule for a mutually agreed upon amount of $175,679.76 (signed November 14, 2008).
While Ebony Foundation began to repay Kiva, the organization decided that it wanted to make payments for additional funding. As such, a second Promissory Note covering a mutually agreed upon higher amount of $373,810.95 was signed with additional payments to begin in April 2009. Since that note was signed, Ebony Foundation has made only a single payment of $1,222 in July 2009. Kiva staff have repeatedly tried to speak with Ebony Foundation’s Executive Director often finding emails and calls going unanswered. Ebony Foundation has promised to repay Kiva (when they responded to our attempts to contact them) but no funds have been forthcoming.
Kiva is currently considering its options, including potential litigation, to recover funds. While the post-election violence severely damaged Ebony Foundation, Ebony has provided no supporting evidence with regard to its actual losses during that period. Any updates on the situation will be posted to Ebony Foundation’s Field Partner page.
Status Update: July 15, 2009
As of July 15, 2009, Ebony Foundation has made five successful payments to Kiva on a Promissory Note negotiated in late 2008 amounting to a total of $48,749.95. Ebony Foundation has since volunteered to pay back all outstanding funds on Kiva loans as a result of higher than expected repayments from clients affected by the post-election violence in January 2008. Kiva and Ebony Foundation have been negotiating this second Promissory Note covering all remaining funds to Ebony Foundation, in the amount of $373,810.95, and Kiva recently received a signed copy of this note from Ebony Foundation. The new Promissory Note replaces the original Note and provides for repayment over a 22 month period.
Since Ebony Foundation has now agreed to repay all amounts owing to Kiva lenders and has already successfully made five initial repayments, Kiva will now release funds held in escrow and will apply all payments under the Promissory Note to all lenders to Ebony Foundation businesses on a proportional basis. As Kiva receives funds from Ebony Foundation on a monthly basis, we will continue to apply them until the remaining balance has been reduced to zero.
Status Update, March 11, 2009
As of March 9, 2009, Ebony Foundation has made three successful payments on their Promissory Note. Unfortunately, Kiva has yet to receive the list of Ebony Foundation entrepreneurs whose loans Ebony considers defaulted, and, without this information, Kiva staff cannot identify which entrepreneurs' loans these funds should go toward repaying in the Kiva system.
We continue to work closely with Ebony staff to obtain this list so that we are able to properly apply these repaid funds to Kiva lenders in the fairest way possible. Kiva will hold the funds collected from Ebony Foundation in escrow while we continue this work.
Status Update, December 3, 2008
Ebony Foundation has a delinquency rate of almost 60% and has represented to Kiva that this unusually high delinquency rate results from the post-election unrest experienced in Kenya in early 2008. Of the loans that are delinquent, Ebony Foundation has explained that (i) approximately 43% of the borrowers are experiencing delays in ability to repay, but are expected to be able to repay their loans eventually and (ii) the remaining 57% of the borrowers are considered unable to repay their loans and are considered in default, as their businesses are not able to sufficiently recover from the post-election unrest to make any repayments. In addition, the post-election unrest caused other operational problems for Ebony Foundation.
Ebony Foundation is now “paused” on Kiva and is not raising any additional Kiva funding for new loans. However, it remains an operating entity and Kiva is attempting to work through this situation with Ebony Foundation in the following manner:
1. Ebony Foundation recently signed an 18-month non-interest bearing promissory note with Kiva covering the repayment of borrower loans for those borrowers that Ebony Foundation has explained have not defaulted.
2. Kiva and Ebony Foundation have agreed that audit work will be undertaken in the first quarter of 2009 to verify the Foundation’s representation regarding the percentage of loans that Ebony Foundation has designated as defaulted due to the post-election unrest. If the audit confirms Ebony’s representation, those loans will be defaulted under the Kiva system and, as per the terms of Kiva’s policies, no recovery will be available for lenders on such loans.
Kiva will keep you posted regarding Ebony Foundation as more information becomes available. However, additional information may take several months to procure, and we appreciate your patience as Kiva and Ebony Foundation work to resolve this situation.
Original Description from Ebony Foundation
Ebony Foundation (Eb-F) is a micro finance institution providing financial services to peasant, small-scale farmers, Small and Micro Entrepreneurs in Kenya with a mission to improve rural livelihood by promoting income generation activities among the poor.
Eb-F provides its target communities with a range of products and services that include factoring/ payments for produce and services delivered to reputable processing firms, Credit to acquire production inputs, equipment and working capital. Also, it provides credit to finance home ownership and improvement and to finance various family consumption needs like education, medical care and pre- and post- natal care. In addition Eb-F provides rural communities with technical and financial backup to set up and manage efficient Rural Banks.
Eb-F's strategy involves providing the poor, low and medium income earners with financial services inform of credit to undertake and improve income generating activities then link them to viable markets for their produce and services. This ensures that the target communities have a regular income that then forms the basis for further production and consumption savings and credit services leading to improved income and improvement of the family livelihood.
Mission: To promote income generation activities among the urban & rural poor within the East African Region by harnessing and availing financial and non-financial resources to the poor. In five years Eb-F will control 20% of non group based MFI lending to Kenyan Small enterprises with a presence across all the eight provinces of Kenya and we shall be the leading provider of technological based financial services to micro and small enterprises.
The Ebony Foundation can be contacted via email at email@example.com
Repayment Performance on Kiva
|This Field Partner||All Kiva Partners|
|Start Date On Kiva||Nov 13, 2006||Oct 12, 2005|
|Amount of raised Inactive loans||$0||$1,191,400|
|Number of raised Inactive loans||0||1,176|
|Amount of Paying Back Loans||$0||$143,434,400|
|Number of Paying Back Loans||0||176,932|
|Amount of Ended Loans||$697,975||$761,739,900|
|Number of Ended Loans||833||949,238|
|Amount in Arrears||$0||$8,469,846|
|Number of Loans Delinquent||0||30,673|
|Amount of Ended Loans Defaulted||$362,686||$10,405,084|
|Number of Ended Loans Defaulted||828||29,697|
|Currency Exchange Loss Rate||0.00%||0.45%|
|Amount of Currency Exchange Loss||$0||$4,044,725|
|Amount of Refunded Loans||$6,000||$5,824,625|
|Number of Refunded Loans||5||5,887|
Loan Characteristics On Kiva
|This Field Partner||All Kiva Partners|
|Loans to Women Borrowers||58.95%||75.01%|
|Average Loan Size||$840||$405|
|Average Individual Loan Size||$840||$636|
|Average Group Loan Size||$0||$1,795|
|Average number of borrowers per group||0||7.8|
|Average GDP per capita (PPP) in local country||$1,800||$5,918|
|Average Loan Size / GDP per capita (PPP)||46.67%||6.84%|
|Average Time to Fund a Loan||0.71 days||6.97 days|
|Average Dollars Raised Per Day Per Loan||$1,183.20||$58.11|
|Average Loan Term||18.64 months||11.09 months|
Journaling Performance on Kiva
|This Field Partner||All Kiva Partners|
|Average Number of Comments Per Journal||1.08||0.05|
|Average Number of Recommendations Per Journal||3.65||1.23|
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||36.00% PY||26.37% PY|
|Profitability (return on assets)||N/A||0.5%||0.15%|
|Average Loan Size (% of per capita income)||N/A||56.00%||18.21%|
Country Fast Facts
- Official Language:
- English (official), Kiswahili (official)
- Avg Annual Income:
- Labor Force:
- agriculture: 75%, industry and services: 25%
- Population Below Poverty Line:
- Literacy Rate:
- Infant Mortality Rate (per 1000):
- 40.71 deaths
- Life Expectancy:
- 63.52 years
Field Partner StaffNancy Gitau
James .K. Mwangi