Some bad news

Trip Start Feb 29, 2008
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Flag of United States  , New Jersey
Friday, July 18, 2008

We received some bad news today, Mifex - which is the institution that actually gives out the Microloans - is having some tough times.  Due to the heavy rains the repayments haven't been made and hence they could not pay back the lenders from Kiva.  According to their letter they will do as much as they can to collect on the defaulted loans and meanwhile will not use Kiva until they work out their issues.
 
We wish them luck and hope that the economic conditions will improve and the loans will be repaid.  However we are not sorry that we tried to help, quite the opposite, we are very proud of what we are doing and will continue to do so.

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This is an update on your loan to Sebastián Saltos in Ecuador.

Here is a message written by Robert Edgar, MIFEX Co-Founder and
Director, on your loan:

As Mifex's Co-Founder and Director of Operations, I want to provide you
with an update on your loan managed by Mifex. As you may know, all
entrepreneur profiles on Kiva's website are posted by local Field
Partners, like Mifex, which are organizations that lend to the poor for
poverty alleviation. The role of a Field Partner is to screen each
entrepreneur, upload his/her loan request on the Kiva website, disburse
the loan, and collect loan repayments.

Lately, we have encountered substantial obstacles that may affect the
repayment performance of Mifex and its entrepreneurs on the Kiva
website. Here is an update from our institution that I hope helps
clarify what some of the issues we are dealing with are. If you have
any questions please do not hesitate to visit the Mifex website:
http://www.mifex.org/, or email us at info@mifex.org.

In the microfinance industry Mifex is a very young organization. We were
amongst the first institutions to use Kiva for financing and we have
heavily relied on Kiva funds to start our organization. Although Kiva
and the great lenders that support the site have helped our institution
form a strong base for growth, we have recently encountered substantial
obstacles.

A shortage of capital, combined with escalating default rates, has put a
heavy strain on our operation. Many of our clients are also having a
very difficult time making their repayments due to the persistent rains
during the first half of the year. These factors have caused Mifex to
accumulate a debt to Kiva lenders that we cannot pay without putting in
danger the sustainability of our organization.

As a result, Mifex and Kiva have agreed to put a temporary pause on all
new fundraising on the site until our organization regains its
stability. We will continue to make collections on our Kiva loans
during this time. However, due to the challenges we face, some of the
funds you are expecting as a repayment may be delayed or defaulted if
we are not able to collect them within 6 months of the end of their
respective loan terms, as Kiva's policy states.

Over the next several months we will devote 100% of our efforts to
resolving this situation so we can continue our relationship with Kiva.
We will continue to collect the debt from our clients who have defaulted
as well as explore other sources of financing. Meanwhile, we
respectfully ask for your patience as we diligently work towards these
goals.
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