Rent-to-Own
Kiva conducts regular, ongoing monitoring of all Lending Partners, but only posts status updates here in response to relevant, major changes at the partner.
Status update - September 21, 2021
Kiva and Rent-to-Own (RTO) have agreed to end their partnership after 8 years and more than $393,750 in loans raised. This is due to a severe economic downturn in Zambia and then the COVID-19 pandemic in 2020 exacerbating this crisis, dramatically affecting the business and their clients. RTO is faced with closing the business or restructuring to a grant-funded organization in order to maintain their social mission. Kiva has written off RTO's remaining balance of $35,299 to support their continued impact with small-scale entrepreneurs in Zambia. We thank Rent-to-Own for the years of collaboration and wish them success in their future endeavors.
Partner description:
Farmers and rural business owners in Zambia lack access to affordable, available and appropriate equipment for key business ventures such as farming and food production. Without productive assets these entrepreneurs are not able to realize their business potential.
Rent-to-Own is a social enterprise that directly responds to this challenge through a holistic approach: help customers select their assets and provide low-cost distribution, tailored financing options, and training services so that each customer walks away with the assets, knowledge, and skills needed to grow their businesses.
Founded in 2010 with the help of Engineers Without Borders and Forest Fruits Ltd., Rent-to-Own has served more than 2,600 customers, benefiting 13,000+ disadvantaged household members in rural Zambia.
Kiva lenders’ funds will allow Rent-to-Own to further expand its unique asset financing program, reaching more customers in the bottom of the pyramid across rural Zambia. Currently Rent-to-Own operates out of 10 field locations, each serving customers within a 50-km radius. They’re working hard to both increase sales density at each field location and expand geographically in order to bring our rural asset financing solution to thousands of people a year. However, finding financing is difficult because the model – despite being proven – is new. Kiva funding will be used to make this happen.
A unique lending approach:
Most small business owners in Zambia live hundreds of kilometers away from the capital city, which makes the purchase of equipment costly and challenging. Rent-to-Own uses a product catalogue for customers to purchase equipment needed to grow their businesses and a network of local agents who leverage their social networks to decide if customers are credit-worthy. Once customers are approved, Rent-to-Own provides delivery, installation and training services for their equipment to enable same-day use.
Samuel is a small-scale vegetable farmer from the farming area of Chibombo District, Zambia. He bought an irrigation pump from Rent-to-Own. Since the pump was delivered, Samuel no longer needs to water his crops with buckets by hand. This has allowed him to irrigate a larger portion of land in less time. Samuel said, Rent-to-Own has made his “[…] dream coming true.”
The typical entrepreneur earns less than $2.50/day and employs 2-10 people. Rent-to-Own focuses on entrepreneurs who can generate new revenue with the right tools and equipment, and who are in remote, underserved areas. By sourcing the products on its own and organizing delivery and installation for customers, in most cases they’re able to provide products at a fraction of the cost.
Learn more about Rent-to-Own’s work and impact:
In addition to providing low-cost assets, financing and a holistic set of support services for these assets, Rent-to-Own delivers a wide variety of trainings ranging from business development to record keeping. These trainings ensure that customers can maximize their earnings from the equipment.
Rent-to-Own joined Kiva through the experimental partnership program, and has therefore received a lighter level of due diligence. Accordingly, loans associated with this partner carry a higher level of risk than typical Kiva loans.
Repayment Performance on Kiva
This Lending Partner | All Kiva Partners | ||
Start Date On Kiva | Mar 1, 2013 | Oct 12, 2005 | |
---|---|---|---|
Total Loans | $393,750 | $2,056,238,590 | |
Amount of raised Inactive loans | $0 | $277,355 | |
Number of raised Inactive loans | 0 | 253 | |
Amount of Paying Back Loans | $0 | $158,100,775 | |
Number of Paying Back Loans | 0 | 187,973 | |
Amount of Ended Loans | $393,750 | $1,854,343,460 | |
Number of Ended Loans | 396 | 2,501,455 | |
Delinquency Rate | 0.00% | 12.27% | |
Amount in Arrears | $0 | $11,965,982 | |
Outstanding Portfolio | $0 | $97,560,700 | |
Number of Loans Delinquent | 0 | 63,552 | |
Default Rate | 20.02% | 1.84% | |
Amount of Ended Loans Defaulted | $78,814 | $34,038,827 | |
Number of Ended Loans Defaulted | 95 | 91,258 | |
Currency Exchange Loss Rate | 2.24% | 0.47% | |
Amount of Currency Exchange Loss | $8,819 | $12,742,203 | |
Refund Rate | 1.47% | 0.55% | |
Amount of Refunded Loans | $5,775 | $11,261,520 | |
Number of Refunded Loans | 4 | 9,866 |
Loan Characteristics On Kiva
This Lending Partner | All Kiva Partners | ||
Loans to Women Borrowers | 27.93% | 78.49% | |
---|---|---|---|
Average Loan Size | $999 | $393 | |
Average Individual Loan Size | $999 | $585 | |
Average Group Loan Size | $0 | $1,913 | |
Average number of borrowers per group | 0 | 8.3 | |
Average GDP per capita (PPP) in local country | $4,100 | $5,592 | |
Average Loan Size / GDP per capita (PPP) | 24.36% | 7.03% | |
Average Time to Fund a Loan | 2.89 days | 9.13 days | |
Average Dollars Raised Per Day Per Loan | $345.83 | $43.04 | |
Average Loan Term | 9.51 months | 11.5 months |
Journaling Performance on Kiva
This Lending Partner | All Kiva Partners | ||
Total Journals | 91 | 1,224,773 | |
---|---|---|---|
Journaling Rate | 19.44% | 41.91% | |
Average Number of Comments Per Journal | 0.00 | 0.02 | |
Average Number of Recommendations Per Journal | 0.00 | 0.55 |
Borrowing Cost Comparison (based on 2017 data)
This Lending Partner | Median for MFI's in Country | All Kiva Partners | ||
Average Cost to Borrower | 39% APR | 74.00% PY | 26.61% PY | |
---|---|---|---|---|
Profitability (return on assets) | -97.6% | 3.2% | -1.37% | |
Average Loan Size (% of per capita income) | N/A | 10.00% | 0.00% |
Country Fast Facts
- Country:
- Zambia
- Capital:
- Lusaka
- Official Language:
- Bembe 33.4%, Nyanja 14.7%, Tonga 11.4%, Lozi 5.5%, Chewa 4.5%, Nsenga 2.9%, Tumbuka 2.5%, Lunda 1.9%, Kaonde 1.8%, Lala 1.8%, Lamba 1.8%, English (official) 1.7%, Luvale 1.5%, Mambwe 1.3%, Namwanga 1.2%, Lenje 1.1%, Bisa 1%, other 9.2%, unspecified 0.4%
- Population:
- 14,638,505
- Avg Annual Income:
- $4,100
- Labor Force:
- agriculture: 85%, industry: 6%, services: 9%
- Population Below Poverty Line:
- 60.50%
- Literacy Rate:
- 63.40%
- Infant Mortality Rate (per 1000):
- 66.62 deaths
- Life Expectancy:
- 55.83 years