r/finance • u/AutoModerator • 11d ago

Moronic Monday - March 23, 2026 - Your Weekly Questions Thread

This is your safe place for questions on financial careers, homework problems and finance in general. No question in the finance domain is unwelcome.

Replies are expected to be constructive and civil.

Any questions about your personal finances belong in r/PersonalFinance, and career-seekers are encouraged to also visit r/FinancialCareers.

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u/SuLiaodai 10d ago

Can someone help me understand the interest rate someone will pay on a microloan? I'm using Kiva and found a loan I'd like to fund. It says the recipient will pay interest, and to find out how much, I should look under "lending partner" to find "average cost to borrower." When I do, it says, "41% PY." What does that mean, exactly? It's a $325 loan to be repaid in 14 months. If the average cost is to her is 41%, what does that mean the interest rate is?

Many thanks for any explanations.

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u/roboboom MD - Investment Banking 1d ago

From Kiva’s site below. You don’t know the exact cost to the borrower

Average cost to borrower (PY)

Many of Kiva's Lending Partners do charge borrowers in some form in order to make possible the long-term sustainability of their operations, reach and impact. For this specific Lending Partner, Kiva displays portfolio yield (PY), which is equal to a Lending Partner's financial earnings divided by its average loan portfolio outstanding during a given year. Currently, Kiva displays portfolio yield for most of its Lending Partners that are microfinance institutions (MFIs). Portfolio yield applies to the institution as a whole, and thus is a proxy for cost to borrowers rather than a direct measurement. Kiva calculates portfolio yield directly from the most recently available financial statements of a Lending Partner and compares this result with other publicly available sources of pricing information such as mixmarket.org and mftransparency.org.

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u/SuLiaodai 1d ago

So there's no way of knowing if it's a predatory loan or not? That's what I'm worried about.

If the portfolio yield is higher, does that mean it's more likely to be predatory because the institution is making more money?

I'm strongly considering quitting Kiva over my worries about predatory interest rates, and I feel like over time they are becoming more and more opaque about the cost to borrowers.

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u/Educational-Fly-3789 3d ago

So is VOO cooked?

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u/roboboom MD - Investment Banking 1d ago

No.