Status update — May 13, 2019

Kiva and Micrograam have ended their partnership after over 5 years and $296,625 in loans raised. This Field Partner has repaid its outstanding balance to Kiva in full, and these funds have been distributed to lenders. We thank Micrograam for the years of collaboration and wish them success in their future endeavors.

Status update — December 26, 2016

Due to regulatory changes by the government of India, Kiva is no longer able to send funds to MicroGraam. As a result, Kiva has moved this Lending Partner to inactive status. This means MicroGraam is no longer fundraising loans on the website, though Kiva fully expects the partner to continue to send repayments owed to Kiva lenders for as long as the partner has an outstanding balance. If the regulations change and this partner requests to fundraise on Kiva again, Kiva is willing to re-open their line of funding. We will first conduct any additional monitoring and due diligence tasks we believe necessary before allowing the partner begin fundraising for new loans.

Partner description:

MicroGraam Marketplace (MicroGraam) is a Bangalore-based, crowd-funding lending platform that aims to promote development and growth throughout India by providing underserved populations with access to formal loan financing.

MicroGraam focuses on poverty alleviation in rural areas and -- despite being based in Bangalore, Karnataka -- currently lends to communities across India, reaching into Tamil Nadu, West Bengal, Jharkhand, Assam and Karnataka. In order to provide critical capital in these areas, MicroGraam collaborates with various partners located across the country, applying a structure very similar to Kiva’s.

Through its partnerships, MicroGraam has been able to reach over 3,169 clients in rural underserved areas since its inception in 2010. The partner organizations currently provide clients -- most of whom are women -- with three types of loans: (1) agricultural loans, (2) educational loans, and (3) microenterprise loans.

MicroGraam’s existing network of partners is comprised of 26 social organizations (largely NGOs and MFIs). Prior to partnering with MicroGraam, each organization undergoes a strict due diligence process, ensuring that they have the proper social performance priorities and that they post qualified loans to MicroGraam’s website.

Under this structure, if a loan is fully funded on Kiva, funds are wired from Kiva to MicroGraam, and from MicroGraam to the relevant partner, who in most cases will then disburse the loan to the borrower and later collect repayments. In certain cases, and with certain partners, loans may already be pre-disbursed and will be marked as such on the loan page.

In order to cover its operational costs and those of its partners, MicroGraam loans have small, competitive interest rates. Rates typically fall between a range of 9.5% and 14.5%, with a cap at 16.5%. For MicroGraam loans not funded through Kiva, 2% of the interest paid by borrowers goes to cover operational costs at MicroGraam, and 5% goes to the partner; the remaining interest is paid to the MicroGraam lender. As part of their marketplace model, MicroGraam lenders are invited to bid on interest rates to encourage competition, keep the rates low, and -- by allowing them to collect returns on their investments -- motivate lenders to make more loans at higher volumes.

For loans funded through Kiva, interest will only be paid to cover costs at MicroGraam and the partner organization. Interest will not be paid to the lender, as is the case with all Kiva loans.

When Kiva lenders support borrowers through MicroGraam, they are in fact lending through two layers. While this system may translate into higher risk, it also gives lenders the chance to have a greater impact in these communities as each loan empowers not only the borrower, but also MicroGraam and MicroGraam’s partners. MicroGraam loans that are backed by Kiva lenders will go out to borrowers with an interest rate in the range of 9.5% and 14.5%. In addition to the operational costs, given that Kiva loans are in US dollars, there is an additional cost to cover the currency risk.

A unique lending approach:

By partnering with Kiva, MicroGraam will be able to grow its loan portfolio and expand the impact that it is making within the Indian microfinance market. With the addition of Kiva capital and access to our large network lenders, MicroGraam will be able to forge new partnerships with impactful social organizations, connecting more rural areas with critical capital and bringing financial services to those who need them the most.

Specifically, Kiva will enable MicroGraam to (1) extend its current low interest rate products and services to more clients, (2) increase funding for borrowers through access to a broader lender community, and (3) offer clients new and different types of loans.

India has 33% of the world’s poor, but also some of the strictest regulations surrounding foreign  financing. MicroGraam presents a unique opportunity for Kiva to reach entities that it would not normally be able to work with, while also giving Kiva lenders the chance to support communities that they would otherwise be unable to connect with.


Repayment Performance on Kiva

    This Lending Partner All Kiva Partners
  Start Date On Kiva Mar 14, 2014 Oct 12, 2005
Total Loans $296,625 $1,963,391,405
Amount of raised Inactive loans $0 $623,050
Number of raised Inactive loans 0 271
Amount of Paying Back Loans $0 $155,983,140
Number of Paying Back Loans 0 182,346
Amount of Ended Loans $296,625 $1,776,188,995
Number of Ended Loans 501 2,383,143
Delinquency Rate N/A 11.21%
Amount in Arrears N/A $10,545,215
Outstanding Portfolio N/A $94,056,681
Number of Loans Delinquent N/A 43,938
Default Rate N/A 1.82%
Amount of Ended Loans Defaulted N/A $32,352,693
Number of Ended Loans Defaulted N/A 84,927
Currency Exchange Loss Rate N/A 0.49%
Amount of Currency Exchange Loss N/A $12,028,211
Refund Rate 0.00% 0.54%
Amount of Refunded Loans $0 $10,528,825
Number of Refunded Loans 0 9,602

Loan Characteristics On Kiva

    This Lending Partner All Kiva Partners
  Loans to Women Borrowers 91.72% 78.25%
Average Loan Size $101 $392
Average Individual Loan Size $379 $589
Average Group Loan Size $689 $1,893
Average number of borrowers per group 8.1 8.3
Average GDP per capita (PPP) in local country $4,000 $5,599
Average Loan Size / GDP per capita (PPP) 2.52% 7.00%
Average Time to Fund a Loan 5.06 days 8.94 days
Average Dollars Raised Per Day Per Loan $19.94 $43.84
  Average Loan Term 42 months 11.47 months

Journaling Performance on Kiva

    This Lending Partner All Kiva Partners
  Total Journals 1 1,181,957
  Journaling Rate 0.20% 42.25%
  Average Number of Comments Per Journal 0.00 0.02
  Average Number of Recommendations Per Journal 0.00 0.57

Borrowing Cost Comparison (based on 2015 data)

    This Lending Partner Median for MFI's in Country All Kiva Partners
  Average Cost to Borrower 1% PY 22.00% PY 27.02% PY
  Profitability (return on assets) 0.6% 1.2% -3.03%
  Average Loan Size (% of per capita income) N/A 10.00% 0.00%

Country Fast Facts

Lending Partner Staff