Luzmila is a farmer who earns a living working in the fields. She works as a farmer and alternatively also earns income raising and selling chickens. Both the crops she harvests and the animals are sold in the town market where she lives. This is how she’s able to get the resources to cover family expenses.
With a desire to strengthen her business, she’s seeking help from the loan to buy chickens and concentrate in bulk. This will allow her to increase her production capacity and earn better income from sales.
If you want to know more about the entrepreneurs and the loans from Interactuar, you can join the Lending Team called: “Friends of Interactuar Colombia”: http://www.kiva.org/team/interactuar_colombia
This loan is special because:
More about this loan
By funding this loan, you are promoting entrepreneurship in remote regions, including areas recovering from guerilla warfare in Colombia, and helping to reverse the rural exodus which occurred in the past decades when a the rural population fled their countryside homes for the safer cities.
This Kiva loan was created by Kiva’s field partner Interactuar specifically for Kiva funding, in an effort to reach more borrowers in rural areas. Most of the Interactuar’s lending operations are focused in urban parts of Medellin. But this loan product is designed to provide working capital to riskier agricultural businesses who have been traditionally excluded from the finance sector.
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.