Copacabana, Colombia Food | Food
Jhon is a 20 year-old youth who, due to a lack of job opportunities, decided to start working independently so he started a business selling food.
He has no children, only the responsibility of looking after his mother and studying. He is motivated to get up every day to work hard, because he sees himself in the future being a successful businessman.
With the goal of increasing his profits, Jhon is requesting a loan to buy a refrigerator. This will help him to store a greater quantity of food and keep it at an ideal temperature. He will also use the loan to buy steak, chicken, and pork.
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This loan is structured on Kiva as a bullet loan, which means a single payment is required at the end of the loan term. By Colombian law, Kiva’s partner Interactuar is required to offer borrowers loans with a variable interest rate that fluctuates with the market rate. 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.
A loan of $700 helps Jhon Alejandro to buy a refrigerator for his food business.