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Kiva Zip | Frequently Asked Questions https://zip.kiva.org/faq[8/27/2013 9:42:15 AM] You will be automatically brought back to the Kiva Zip website to create a Kiva Zip account. Your Kiva.org and Zip accounts will then be linked, and you will be able to use your Kiva.org credit to make Zip loans. For users who are new to Kiva.org, and also new to Kiva Zip: Register as a new Kiva.org user by clicking the “Register” link at the top right of the Kiva.org/Login page. You will be automatically brought back to the Kiva Zip website to create a Kiva Zip account. Your Kiva.org and Zip accounts will then be linked. For existing Kiva.org users, who have used Kiva Zip before: Login to your Kiva.org account as usual. You will be automatically brought back to the Kiva Zip website to link your Kiva.org and Zip accounts. Assuming the email address on your Kiva Zip account matches the email address on your Kiva.org account, you will be prompted to enter your Kiva Zip password. Your Kiva.org and Zip accounts will then be linked, and you will be able to use your Kiva.org credit to make Zip loans. Note: If you have different email addresses for your Kiva.org and Zip accounts, you can still easily link them. When you are automatically brought back to Kiva Zip after logging in to your Kiva.org account, just click the link that says “Already a Kiva Zip user?”, click the button in the dialog box that appears, and enter your Kiva Zip email address and password. For existing Kiva Zip users, who are new to Kiva.org: Register as a new Kiva.org user by clicking the “Register” link at the top right of the Kiva.org/Login page. You will be automatically brought back to the Kiva Zip website to link your Kiva.org and Zip accounts, by entering your Kiva Zip password. Your Kiva.org and Zip accounts will then be linked, and you will be able to use your Kiva Zip credit to make loans on Kiva.org. Once you have gone through this process once and your accounts are linked, whenever you log in to your Kiva.org account, you will be automatically logged in and brought back to Kiva Zip. As of March 2013, lenders must have a Kiva.org account or create a Kiva.org account to log in to Kiva Zip and make Zip loans. Questions for and about Kiva Zip lenders Why do lenders make loans on Kiva Zip? There are a variety of reasons why lenders make loans on Kiva Zip. Some lenders appreciate the ability to give a financial opportunity to an entrepreneur on the other side of the globe. Other lenders want to help the small business just down the street from them. Kiva Zip lenders do not make loans to maximize financial returns; there is 0% interest on the loans they make. What are the risks involved with lending on Kiva Zip? It should be made clear from the start that lending money on Kiva Zip is a risky enterprise - for three main reasons. You should only loan money on Kiva Zip that you can afford to lose, because there is no guarantee that you will get it back. The first risk is that of borrowers defaulting on their loan. In this case, the Kiva Zip lender would lose their entire investment. There are many reasons why a loan might not be paid back, ranging from poor execution of a business plan, to the borrower experiencing a catastrophic accident, to fraud on the part of the borrower or the trustee. The second risk is that of exchange rate losses, which is covered in more detail in the separate question on exchange rates. In this case, the Kiva Zip lender would only lose a fraction of their initial investment. The third risk is that because Kiva Zip is an as-yet relatively untested project, there are unknown variables and risks that continue to be discovered now, and will be discovered as the project is established over its first couple of years. What about exchange rate fluctuations? The exchange rate of the Kenyan Shilling against the US Dollar is liable to change on any given day – in either direction. Looking back over the last 4-5 years, the average fluctuation has been around 7-8% over the course of a year, which is around 2.00 USD on a 25.00 USD loan share. To explain what will happen if the exchange rate changes in either direction, let’s take an example of a 100 USD loan, which initially converts into 10,000 KSH in January.