[imtringued]

There are two reasons why the loans are 80% APR, either because lots of them fail to repay (which goes against the 96% repayment rate) or because the recipients of the loan generate enough value to justify paying 80% APR. (unlikely because that would have attracted a colossal amount of investors and reduced yields back to the single digits that are available to other markets).

Honestly, looking at it, it would be better if they just obtained the funding themselves by borrowing it at low interest rates and you just pay a subscription fee to cover the interest and administrative costs.

[notahacker]

The main reason is that administering small loans is expensive: costs of administering/chasing the debt don't really scale down just because the loan itself is only $50, and most of these entities seek to turn a profit too. Additionally there's a suspicion the middlemen sometimes use other loans' interest payments to cover defaults since nonrepayment makes them look bad to Kiva lenders.

Zidisha (YC14, nonprofit) cut out the middleman to do pure P2P lending in the developing world at much lower rates but at least when I was on the platform had significant issues with defaults even with local volunteers helping with chasing (and some defaults definitely weren't planned).