John applied for his first loan of KES 25,000 from Vision Fund Kenya to buy a dairy cow so that he can increase the amount of milk he supplies and thereby earn more income. He plans to use part of his profit to repay the loan and to expand his agricultural business.
His hope for the future is to be financially stable.
When lending funds across national boundaries, the local currency in the Field Partner's country of operation may lose some of its value relative to the USD, thus requiring the Field Partner to use more of its local currency to reimburse Kiva in USD. Kiva offers Field Partners the option to protect themselves against severe currency fluctuations (a US dollar appreciation of over 10% relative to the local currency) by sharing any losses greater than 10% with Kiva lenders. By bearing these losses, lenders are able to protect the Field Partner and its borrowers from catastrophic currency devaluations.
Self-sustainability is critical to creating long-term solutions to poverty alleviation, and charging interest to borrowers is necessary for microfinance institutions to achieve this. Many of Kiva's Field Partners do charge interest to borrowers, and you can find more information about these rates by looking at the Average Cost to Borrower field on each partner page (kiva.org/partners) as well as on each loan profile. These rates vary by country and partner.