They do have an experimental model that they are currently operating in the US. These are direct loans without a field partner and consequently the interest rate is 0%.
Their mitigation for these risks does take on the following aspects which I will comment on in this post:
This is done to confirm suitability, risk levels etc. and eliminate ineligible borrowers .
This may involve interviews with family and other community members to asses their character and develop depth to the individuals overall story.
This assessment is especially effective in groups with with strong community ethics and values.
These are often those that know the borrower and will encourage them to repay their loan. There is a reputational aspect to trustees that they can build up over time.
If persons from the borrowers own social network is not prepared to contribute to the cause and put "skin in the game" then it is less likely that they will be a good borrower.
Kiva commits to follow up and assist in helping borrowers to meat their loan obligations.
Many of these measures are best or at least functional practices from other lending scenarios found all over the world.
What interests me most about this model is the 0% lending rate and the fact that some good practices are being implemented to mitigate risk.
Image is a screengrab from kiva.com
