By funding this loan, you're promoting entrepreneurship in remote regions of Colombia, including areas recovering from guerilla warfare, and helping to reverse the rural exodus which occurred in the past decades when the rural population fled their countryside homes for safety in cities.
This loan product was created by Kiva's Field Partner, Interactuar, specifically for Kiva funding, in an effort to reach more borrowers in rural areas. While much of Interactuar's lending operations are focused in urban parts of Medellin, this loan product is designed to provide working capital for riskier businesses operating in rural areas that have been traditionally excluded from the financial sector.
About Interactuar:
If this loan is structured on Kiva as a bullet loan (which means a single payment is required at the end of the loan term), it is because Interactuar sometimes has to offer borrowers loans with a variable interest rate that fluctuates with the market rate. In these cases, because fixed monthly payments are applied first to interest and then to principal, Interactuar is unable to predict upfront what portion of each repayment would go towards the loan principal. This creates a challenge with Kiva's system, which doesn't allow for unpredictable principal payments, and can result in some Interactuar clients appearing falsely delinquent. To remedy this, the loan has an end-of-term repayment plan on Kiva, but the borrower will continue scheduled monthly repayments to Interactuar, who will then pass along the principal amount to Kiva lenders. This means that you may see repayments made on this loan throughout the repayment term, as opposed to receiving repayment in full at the end of the loan term.
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