Many MFIs in Thailand receive emails from people around the world asking why they are not members of KIVA. For those not familiar with KIVA, it is a US-based website that allows individuals to fund loan requests in developing countries (www.kiva.org). It has received a lot of media attention in the past year and is quite popular among American and Canadians. Many of these supporters have contacted Thai organizations directly asking them why we are not KIVA partners.

There are several reasons why KIVA is not active in Thailand. After discussing this issue with KIVA’s staff responsible for South-East Asia, we can provide the following two reasons why:

1. Thailand is not KIVA’s immediate focus. In terms of numbers, Thailand’s microfinance industry is small. Neighbouring countries, such as Vietnam and Cambodia, have a much more developed microfinance sector and provide much greater opportunities for KIVA to expand. We were told by KIVA reps that Thailand may become a focus sometime in 2009 once they have successfully expanded into other regions first.

KIVA has specific criteria in order to become a partner with them. This includes having a minimum of 1000 clients. In Thailand, there are probably only two non-governmental agencies who would qualify. Generally speaking most microfinance projects in Thailand number between 100-500 members.

2. The second important issue is the Thai legal system. Any loan originating from outside Thailand is subject to a 15% withholding tax. This includes loans with 0% interest as in the case with KIVA. As a result, a “free” loan because quite costly.

Several organizations are interested in developing partnerships with KIVA. Hopefully with time, it will be possible.
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