A Kiva Zip Friendship with Jeannine FEATURED
When I first joined Kiva Zip, I was told that the first borrower I would work with would always hold a special place in my heart. Looking back, I realize how wildly understated that warning was. I would never be truly prepared for the touching experience and friendship that I was soon to gain.
On my first day at the Kiva Zip office, I was asked to call Jeannine Maxwell and discuss her profile and explain the Zip process. Still learning the details myself, I was quite nervous for this first phone interview. However, almost immediately the fears and the panicky voice went away, replaced by the sounds of laughter.
Jeannine is an inspiration to all those who meet her. She grew up in the Caribbean island nation of Trinidad and Tobago, living in truly desperate conditions. Her father abandoned her when she was 9 years old, and a few years later her mother died from cancer.
Strengthened with the resolve to better herself, Jeannine worked hard and moved to New York City at the age of 26. She was drawn to cosmetology 22 years ago through a simple twist of fate: She signed up for free classes at the local secondary school but discovered the only free class was one on hair-styling. Soon after, she became a licensed cosmetologist and has spent over the last twenty years working in the industry.
Today, Jeannine is ready to make yet another positive change in her life. She is currently studying to be a certified trichologist and dreams of building a successful business and trichology practice that works with people who are experiencing hair loss and scalp issues. She desires to help them build a new healthier lifestyle. In order to achieve this dream, she wishes to take out a loan through Kiva Zip.
A couple of weeks ago I traveled to Jeannine’s neighborhood to meet with her and discuss her dream of building her own business. Although we spoke for almost an hour, I swear between all the laughter and stories, the time just flew by. Jeannine had originally heard about Kiva through her own research on the organization and was both excited and eager to begin the process. We talked about her story, the cold, and both of our experiences moving to NYC, but it was her passion and drive that impressed and inspired me.
Jeannine has led an incredibly difficult life. She has pushed herself forward and has grown to be an inspiring entrepreneur. Now with her life settled in she wishes to help others and move to this new stage in her life. It was a pleasure meeting her and I firmly believe that she will be successful in whatever new adventure and dream she sets out to accomplish.
Climbing the Credit Ladder FEATURED
It begins with a small Kiva Zip loan.
Then the business - AND its potential - grow!
At Kiva Zip, entrepreneurs who are often denied capital are given trust. The process of receiving a loan relies heavily on character, not credit. Yet as they pay back their crowdfunded loan, their business grows, in addition to their credit-worthiness! Soon they can climb the 'credit ladder.'
US Chia is one of the success stories. The Louisville company started with a $5,000 Kiva Zip loan, and as they proved their role in the American chia seed industry, Access Ventures gave them a greater opportunity. The impact-investment group provided a $35,000 "Growth loan" to US Chia.
Access Ventures Director of Microfinance David Taliaferro said, "This was a triple win for US Chia as they solved supply issues around offering US-grown seed this year, improved profit margins with their largest bulk purchase ever, and did it all without having to give up additional equity in the company."
Access Ventures and Zack, CEO of US Chia
Access Ventures is a trustee for Kiva Zip as well! The group has come up with a three-step program to assist young small businesses so that they can become 'bankable' within a few years.
(1) Kiva Zip loan: up to $5,000
(2) Access Ventures' Catalyst Loan: up to $9,000
(3) Access Ventures' Growth Loan: up to $35,000
For more information about applying for a small business loan through Access Ventures, please contact Taliaferro.
As Kiva Zip Program Manager and trustee Justin Renfro explained, "The leverage of Kiva Zip allowed this to happen -- as the business grew and became more successful it positioned them to get more money to continue their growth!"
This is our greater vision. Join us....(continued)
Take 2: Happy Hour in Philadelphia! FEATURED
Get ready, it's back on!
The postponed Kiva City Philadelphia Happy Hour has been rescheduled, so save the date and register if you haven't already!
The happy hour will take place Tuesday, March 31 from 5:30 PM - 7:30 PM. A Kiva Zip cocktail, drink and food specials will all be handcrafted by W/N W/N Coffee Bar. W/N W/N Coffee Bar is benefiting from one of our 0% interest loans, and they will also be lending 10% of the night's proceeds to currently fundraising borrowers! We want to bring our community - borrowers, lenders, donors, supporters, and trustees - together for a happy hour of mixing cocktails and making loans!
Space is limited so we ask that you please RSVP in advance. if you've already registered, thanks! You're covered, you don't need to register again.
For Nadine, food is more than just sustenance for the body.
Food sustains her life.
“It’s my passion, passion, passion that keeps me in the game and moving forward.”
Chef Nadine, as she’s known to many, owns a small business called Nutrition Synergies, LLC in Washington D.C. It represents the fruits of her hard labor, as she has overcome obesity and long dreamed of being a successful entrepreneur. The desire began in college, when she and her best friend Sharon decided to make it their goal to be featured in “Black Enterprise Magazine.”
Selfie! Nadine and Sharon
Thanks to a Kiva Zip loan in 2013 and support from her trustee Union Kitchen, Chef Nadine is making her mark on the food scene in the nation’s capital. However, it’s not by being the next celebrity chef.
Her mission is to “Feed, Teach, Empower and Build Communities using Culinary Art,” with the idea that she will educate families and neighborhoods about the importance of eating healthy and living healthy to succeed, especially seniors and lower income residents in D.C.
Her influence is growing quickly! Last year, she was selected to open a brand-new culinary space in southeast D.C., which will be called “Mustard Seed Café.”
While Nadine’s dreams are becoming reality, she acknowledges there is someone who has made sure to back her dream. “When I called Sharon and told her of the opportunity, she literally dropped EVERYTHING in her life to focus on helping me develop this new concept,” said Nadine.
“That is unconditional love, support and friendship.”
Nadine’s – and Sharon’s – dream is coming true. And there are others waiting to come into reality!
Ki's Dream: To be her own Woman FEATURED
Ki has been defined in so many words that were out of her control:
Her dream was to be able to define herself.
Now, with your support, her dream is coming true.
Ki and her husband have opened a small Vietnamese sandwich shop in the Tenderloin neighborhood of San Francisco. It has taken decades of struggle, fear and doubt. Read more about her dream on Kiva’s Medium site, and back her dreams at her Kiva Zip page.
“We feel safe. This is the place we are looking to stay — the final place.”
Marty’s Vegan Fast Food on the Move FEATURED
It’s been a couple of months since Marty Krutolow was active on the fundraising front. Marty successfully raised a $2,500 Kiva Zip loan for his vegan fast food business last December. This month I had the opportunity to meet with Marty and his business partner/chef David Silver and see how things were going.
A Dream for Change
The official launch of Marty’s Vegan Fast Food was at the New York City Vegetarian Food Festival only one short year ago. It became a test market/proof of concept for vegan fast food service for both vegans and omnivores. “In my former job as a pilot, I saw so many great vegan restaurants that were empty, and so many medium so-so venues with large lines. I realized I could fill the gap in the foodspace for fast vegan food and do it better,” said Marty.
Marty and David currently sell their food at pop-up markets throughout the New York City area, such as the Brooklyn Pop-up Market, the LIC Holiday Flea market, Brooklyn Night Bazaar, the SEED Market at the Altman Building and the 2015 NYC Vegetarian Food Festival last weekend! Selling items ranging from vegan “Drum Stix” to “mac-n-cheeze” and even Korean BBQ, their food represents their mission of creating delicious food while helping the world. When asked about the best part of his business, Marty stated his pride in their ethical and animal welfare practices. “Every time someone eats a burger, we save an animal.”
The Breath of Fresh Air
Marty’s Kiva Zip loan spurred major growth. The $2,500 purchased a second griddle and a second panini press, successfully managed the cash flow of the operations, and ultimately built out the groundwork for future growth.
“We have become a lot busier and now have the infrastructure in place so when we need it, it is there,” Marty said. “Now we can do stuff every weekend!” That includes running two separate markets at the same time! Marty says the Kiva Zip loan was a “breath of fresh air” for a small business owner set on driving change within his community.
Facing the Challenges
It isn’t always easy. Dealing with the insurance, unemployment, and workers compensation forms are just a few of the problems that pile on to Marty’s desk. He’s also working to line up new markets and develop the menu with Chef David.
In addition, Marty faces the added challenge of running a pop-up store. The pair comes prepared: checklists are in hand and prepackaged boxes ready to load in order to meet the realities of the unique business model.
“It is hard to be an entrepreneur in this country. There are always hurdles you must pass.” - Marty
Despite these obstacles, Marty and David are not looking back. The two are confident they will expand and revolutionize the vegan industry. “We are going to get traction one of these days and we are going to launch and go so far,” Marty said.
Marty aims to expand and develop relations with other markets in the NYC area, spreading his knowledge and expertise in creating tasty vegan food. He also hopes to build a commissary kitchen which can also serve as an incubator for other vegan restaurants and vegan food production companies. He and David have already met with over 25 chefs in the area who have expressed interest in this model and the pair is in discussion with city officials to determine the feasibility of this goal.
As big as his dreams will get, he remembers the small moments as well. Marty shared about a simple interaction at the Brooklyn Night Bazaar. “It was so loud we wore earplugs. I remember we sold our burger to someone who then went over to his friend. Obviously, we couldn’t hear exactly what was said but... He told his friend that it was good and then next thing his friend comes over and buys a burger as well. From our end it is always nice to see non-vegans enjoying our food and the favorable response we have received.”
Urban Farmers: You Aren’t Alone FEATURED
This weekend, take advantage of a phenomenal opportunity to network and grow with urban farmers in the Midwest! The Midwest Urban Farmers Summit will be held March 14-15 in Chicago, and pre-registration is recommended!
Unsure of what the Midwest Urban Farmers Summit is? They describe it as:
“a place for production-based urban farmers to gather, to share information, to ask questions, and to help each other develop the best practices for growing lots of great food as well as for running financially sustainable businesses.”
There will be various ways of networking with other farmers, including panel presentations, break-out conversations and more.
There is no required registration fee, but a $10-30 donation is suggested to cover the cost of food, use of space, entrance to the mixer on Saturday. Did we mention a tour of the Plant is included too? The summit will be held at the former industrial building that is now being used to display sustainable food production.
"A net-zero energy food business incubator"
Photo courtesy of Rachel Swenie/Plant Chicago, NFP
New aquaponics system at the Plant
Photo courtesy of Rachel Swenie/Plant Chicago, NFP
For more answers to questions you may have, email MWUFSummit@gmail.com. There are also ways you can ...(continued)
Backing 574 Dreams FEATURED
As we urge you to back a dream, we couldn’t forget about the dreams that have already been realized last year.
All 574 of them.
Here’s how you and the Kiva Zip community made what seemed impossible possible in the U.S.
574 business owners in the U.S.
That’s all with:
$0 in fees.
In all, more than 1,000 dreams have come true in the U.S. since Kiva Zip began. Join us.
A Bagel that Comes Full Circle FEATURED
New Yorkers are fiercely loyal about their bagels. There’s a delightful chew that comes from boiling those rings of flour. While San Francisco has seen its share of criticism for not being able to replicate the right texture, more and more bagel-preneurs are taking the task to heart.
Authentic Bagel Company in Oakland starts off with a promising name.
However, brothers Jason and Mark say their bagel is not an authentic East Coast bagel. It’s actually a blend of east and west: the boiling traditions and chew are combined with a sourdough starter. The latter, of course, pays homage to the baking industry in the Bay Area.
Business has boomed, and after only one year, the brothers plan to expanding into the vacant storefront next door. Their growth is so rapid that they’ve needed to purchase a large commercial refrigerator, thanks in part to a loan they received through Kiva Zip. That loan and this business were endorsed by trustee Libby Schaaf, now the Mayor of the city.
The Kiva Zip team had the privilege of visiting ABC during their team-building day in February! Despite the busyness of the day’s orders, employee Ryan James, or RJ, took time to share more about the company.
Already ABC employs 13 people, and each one is skilled in all tasks, from baking to dishwashing to building! Cross-training is key, says RJ.
They cross-bake too, baking sweets too!
At 23 years old, RJ has taken that mentality of multi-utility to heart as he started his own non-profit back in 2011, but balances working full-time at ABC.
OOG, or ‘Double-O G’ stands for Original Organic Gardener. He aims to create sustainable gardens in shipping containers in urban areas. That’s just the beginning. Right now the organization is benefiting from all the compost at ABC, and he hopes it will continue to grow.
Carbs to compost
His advice to other entrepreneurs? RJ said, “Don’t give up.”
For RJ, it’s his way of ensuring his work and dreams will come full circle.
UPDATE as of Thursday morning, March 5: This event has been cancelled due to the weather. We will reschedule and inform you of when we plan to have this again!
One of the things we love about Kiva Zip is its ability to create strong communities. That's why we want to bring everyone in our Kiva City Philadelphia community - borrowers, lenders, donors, supporters, and trustees - together for a happy hour of mixing cocktails and making loans!
The happy hour will take place Thursday, March 5 from 5:30 PM - 7:30 PM. A Kiva Zip cocktail, drink and food specials will all be handcrafted by W/N W/N Coffee Bar. W/N W/N Coffee Bar is benefiting from one of our 0% interest loans, and they will also be lending 10% of the night's proceeds to currently fundraising borrowers!
Space is limited so we ask that you please RSVP in advance. We hope to see you there!
Who's sick of our Kiva Zip love for Milwaukee? Not us, obviously!
As a result, our East Coast Development Manager Jessica put together a list of why the Cream City is the best new Kiva Zip city!
1. The borrowers
Kiva City Milwaukee has fully funded 11 entrepreneurs, with 15 currently fundraising on the website. That's a total of 26 small businesses represented at the launch!
2. The City
Mayor Tom Barrett declared February 17, 2015 "Kiva City Day." We have an official, framed proclamation to prove it.
3. The Kiva Fellows
Gabriel Mekbib and Lauren Stinson have the Kiva Zip entrepreneurial hustle... and look great while doing it too!
4. Partners in local microfinance
The Wisconsin Women's Business Initiative Corporation (WWBIC) was instrumental to bringing us to Milwaukee. WWBIC makes small business loans, but they are unable to serve everyone who comes through their door, as some businesses are a bit too small, or too early. By bringing in Kiva Zip, they now have an option to help some of these promising entrepreneurs get started on accessing the credit they need.
5. Hip warehouse parties
Our evening celebration was held in an artisan warehouse called Scathain, which makes mirrors and ironwork. Their workspace was transformed into a borrower marketplace (with more than 15 borrowers featured), indoor food truck rally, and makeshift stage. All in all, the venue was very Kiva.
6. Local Kivans
Kathy Guis and Nick Anderson joined us in bringing Kiva back home!
7. Wisconsin cheese
WWBIC client Gouda Girls provided grilled cheese, mac and cheese, you name it.
8. Hinterland-scented beard oil
Made by Kiva Zip borrower Milwaukee Candle and Apothecary. From the state that produced Bon Iver and lots of snow, this is exactly the type of local product that would never exist anywhere else.
9. Milwaukee Blacksmith
Milwaukee Blacksmith is still fundraising on Kiva Zip and raising a new family member! Congratulations to Shannon and Kent for welcoming their sixth child one day after Milwaukee's launch! The Kiva Zip family is (literally) growing.
10. Collective impact of local funders
This is of course where I get most excited. This wouldn't have been possible without the collaboration between the Alfred and Isabel Bader Fund, a Bader Philanthropy; the City of Milwaukee; Northwestern Mutual Foundation; Greater Milwaukee Foundation; Zilber Family Foundation; William G. and Christie A. Krugler; Baird; and Matthew Messinger; as well as matching loan sponsors George A. Mosher and the Milwaukee Economic Development Corporation. Many, many thanks. ...(continued)
Kicking off in Milwaukee FEATURED
It's been a whirlwind of a week, but all the work has been worth it as Kiva Zip launched in Milwaukee on Tuesday! Countless hours of phone calls and meetings and planning have led to 18 loans currently fundraising in Wisconsin and 7 more have already been funded -- all in the last week!
Enjoy some of the various photos snapped throughout Kiva City Day in Milwaukee!
"My goal is that you get your loans, get rich, and stay in Milwaukee."
- Mayor Tom Barrett
More of our incredible borrowers
#KivaZipLove from fellows all over
A big thank you from the Kiva Zip team!
Here's to many more businesses in Milwaukee.
We’ve been counting down to the launch of Kiva City Milwaukee on Tuesday, February 17! Not only are entrepreneurs being given a chance to raise support for 0% interest loans, but they are becoming a part of the Kiva Zip community.
Yet, all of this takes quite a bit of work. Lauren Stinson arrived as the newest Milwaukee fellow last week, and her first few days in the city have been quite eventful. Here’s a look at her schedule as she prepared for the launch:
Thursday, Feb. 5:Arrive in Milwaukee. Excited to hit the ground running!
Speaking of running, I began my fellowship by rushing to Madison, WI (1.5 hours away) to submit a grant proposal. I view the adventure as a way of getting to explore more of the Badger State and visiting my alma mater, University of Wisconsin-Madison. On Wisconsin!
Friday:I am not sure how I got this privilege on my second day on the job, but I was featured in a promotional video for the Wisconsin Saves campaign,, made by a Kiva Zip trustee and key supporter, the Wisconsin Women’s Business Initiative Corporation (WWBIC)! I’m saving up for graduate school as I spend the next few months empowering small businesses in Milwaukee.
Wednesday:A busy day for loan posting! Today alone I've communicated personally with nine borrowers in the application process and trustee review, and five will be posted by the end of the day.
Thursday:More preparation for the launch event next week! We’re inviting borrowers in private and public fundraising to the day’s events, printing posters and calling trustees in the application process. Good news: five more loans posted to private fundraising, including Rochelle of Rochelle’s Fashion Boutique & Terry of Milwaukee Fashion Incubator.
Friday:Kiva Milwaukee could not be complete with our local stakeholders. I lunched with some of our major partners who are helping business owners see their dreams come into reality earlier today.
Monday, D-1 before launch:My first week was nothing short of hectic, but in the best way possible. There’s always a learning curve when beginning a new position but just in these few short days I’ve connected with so many intelligent, passionate and spirited entrepreneurs. I am overwhelmed by how engaged and grateful they are for the Kiva Zip program. I am thrilled to be able to participate in the Milwaukee Kiva City launch and can’t wait to see what adventures and relationships the coming months will bring. ...(continued)
In light of Kiva’s #LoanLove Lightning Round, we’ve got a wealth of knowledge coming from our Kiva Zip food production borrowers this week! A few tips for what to eat as well as how to eat some of the delicious foods from our borrowers.
Sniff out good olive oil
Heather of Olive & Marlowe is a Kiva Zip borrower and trustee who sells artisanal olive oils and balsamic vinegars. If you want to know if your olive oil has gone bad, rub a drop of it onto your forearm and smell. A fresh olive oil of high quality will smell green, grassy, or fruity and will have a pleasant aroma. A rancid or otherwise defective olive oil will give off a "greasy" or "cooked" odor.
Another unique use: light up your life!
Heather uses non-food-grade olive oil to keep her Mason Jar lantern burning.
How to eat: Over grits, oatmeal, even ice cream!
A trick for boosting stamina!
Did you know that naturally occurring nitrates in beets are turned to nitric oxide in your body, which helps with blood flow and lowering blood pressure, thus boosting stamina? That tip comes from Lia of MIX Salad Concept!
How to eat: In a salad with spinach, avocado, sunflower seeds and more
The one-second test for good eggs
Ellee from Solidarity Farm says the best way to tell a good egg from a bad egg is to put it in water. The bad ones float, the good ones sink!
“Healthy, happy hens lay better eggs...it's that simple,” says Ellee. She says pastured hens lay eggs with 1/3 less cholesterol, 1/4 less saturated fat, twice the Omega-3 fatty acids, three times the vitamin E, and seven times the beta carotene than caged hens. A lot of numbers, an easy concept! Ellee is seeking a loan to purchase 300 more hens to expand her farm.
What your favorite wine really says about you
In a battle between sweet whites and rich reds, people who favor the sweeter actually have the most taste buds! Red wine drinkers’ taste buds tend to be less sensitive, according to Antra of In Vino Anima.
Antra also says wine sealed with a screw cap does not mean it is bad or cheap. Instead, it is ready to be enjoyed now, so no need to try to age those bottles.
How to drink: Never drink wine from a plastic cup because it makes even the best wine taste stale.
Try pairing salty food with an acidic or sweet wine (like champagne with potato chips)!
The key to baking with honey
Out of sugar as you’re baking? Not to worry. Randall of Bee Boy Honey says you can substitute honey and your baked goods will stay fresh longer! Just replace 1 part sugar with ⅓ part honey.
Better bacon - well at least, better for you
Hold off on pulling out that frying pan. For bacon that’s tasty but with no mess and no grease-splatter pain, Sarah Starewicz of Buscia's Bacon Buns puts hers in the oven. She recommends baking the strips at 375 degrees Fahrenheit for 25 minutes on a foil-lined baking pan.
A Response to Your Recent Feedback FEATURED
Dear Lenders, Borrowers, and Trustees,
In the last several weeks, we’ve received a lot of feedback concerning delinquencies, expirations, paused accounts and more. I’d like to take this opportunity to address some common questions we’ve heard.
JOYWO loan groups have been a recent topic of confusion. Considering their unique loan distribution and collective interdependence, many of you have asked about what happens in the case of expirations or defaults. If a JOYWO loan expires, we will still post all the other loans in the group. If a loan doesn’t pay back on time, the whole group, not just the borrower, is technically responsible for covering the amount. Again, JOYWO functions on a ‘group guarantee’ model, which creates shared responsibility for all the loans between group members, and requires simultaneous distribution of funds.
Many of you have brought up the fact that there are some trustees with a repayment rate below 90% that are still endorsing new borrowers. Ideally, we would like to be able to work with these trustees to help them improve their repayment rates, but at this time there are simply not enough resources for that to be a viable response to all of our trustees. We simply don’t have the bandwidth or workforce to chase every delinquency, so we must make hard decisions. At the moment, we carefully choose those that we believe have the greatest potential for improvement and make exceptions on a case-by-case basis. We recently paused Safe Spaces, but Youth Banner is one that we’ve decided to make an exception for. We understand that when we make these exceptions, we are responsible for a certain level of transparency to all of you, our stakeholders, and admittedly we haven’t given you that. Moving forward, we will work to make it clear on a trustee’s profile that their repayment rate is less than 90% and are therefore higher risk. We also intend to work with Metropol to do credit reporting for our trustees so that we can more closely monitor trends and predict future changes.
In the vein of transparency, we hope to improve upon the way we communicate defaulted loans to borrowers, trustees and lenders. This is an important, albeit delicate, piece of information. You’ve rightfully brought up the point that there can be a delay between when a loan is listed as delinquent and when that is communicated to it's lenders. Unfortunately, we can’t predict this changing anytime soon. We would love to have more automated processes on the Zip platform, but the reality is that much of our work is still done manually. This will remain a manual process for the foreseeable future, and we appreciate your understanding and patience as we try to keep our lenders as up-to-date as possible on the status of their loans.
As you have pointed out, communicating defaults to borrowers and trustees may de-incentivize borrowers from continuing payments. Defaults are only lender-facing right now, especially in Kenya, as most borrowers don’t check the website. We don’t want to say no to a repayment, but it’s not fair to the trustee or the borrower to keep them in the dark as to their loan status. With our model, it’s hard to work around the potential of defaulted loans resulting in the inability to apply for another loan, so we focus on incentives for trustees and borrowers to continue or resume their payments. Our built-in incentives include getting larger loans and more flexible terms for repeat borrowers, and being able to endorse more loans for trustees, but we would like to do more to incentivize specifically those who have defaulted. Some suggestions we’ve heard from you include: reporting defaults to a local credit bureau and canceling the report if they finally pay back, providing more detailed statistics on defaults and delinquencies, and reviewing/updating/eliminating repayment and communications badges that do not match the reality. These are all constructive suggestions, but at this time these extra processes are contingent on our engineering resources, which are already spread thin. We can’t say our exact plan to expand our incentives, as we are still weighing options based on capacity, but we would like to focus on credit reporting for borrowers and interest for trustees. The borrower badges for repayment and communication, however, will most likely be deleted in the next few weeks.
The issue of trustee communication, or lack thereof, has also been brought to our attention. While we encourage proactive and open communication from our trustees and borrowers on their loan pages, we can’t exactly set requirements or penalize those who don’t or, more likely, can’t update lenders very often. We see Zip as a marketplace. There is of course room for improvement, but ultimately our goal is to give lenders the information they need to decide who gets their dollars and who doesn’t. Basically, we would like to see the preferred level of communication become a self-regulating metric. Lenders should be able to see who has proven to be communicative in the past and, if that communication is important to them, choose to fund loans accordingly.
Finally, there is the issue of borrowers having the same photo and information on multiple loan profiles. This is a serious, though rare, problem that undermines the perceived legitimacy of our work, and is something we are actively trying to resolve. Unfortunately, some of these are fraud, in which case we try and refund the loan and remove the posting as soon as we become aware of it. In most of these cases, however, it is a lack of understanding on the part of the trustee, and moving forward we will work to improve the training we provide for them.
The impact of our work, our recent growth and the sheer numbers we’ve seen in the past year can create the perception that we have much more resources to change and improve our platform as we scale up than we actually do. Though we’re incredibly proud of the recent milestones we’ve passed, the fact of the matter is that below the surface of our website exists a small group of incredibly devoted people working to make something greater than themselves. Our team has done wonders with what we have, but our work would be impossible if it weren't for several unique factors: the lessons we learn and vital connections we make from our experience in kiva.org, Kenya’s unique MPESA system that allows us to deliver loans at 0% interest, and most importantly our lenders, borrowers and trustees that give us fresh perspective, objective feedback, and new ideas. We stand on your shoulders each day so that we can come closer than ever to our goal of delivering true person-to-person microfinance. With only so many hours in the day, we need all of your help to identify problems and weaknesses, and we want you to see yourselves as partners in our work who are invested on more than just a financial level. The very fair concerns you’ve raised due to resource constraints on our end has helped raise the level of urgency of supplying Kiva Zip with the necessary marketing, engineering and community support it needs to live up to our potential. Your support and feedback has helped us decide to integrate with the kiva.org platform this year, and your participation has helped us prove that it is possible to deliver direct person-to-person loans to excluded populations in the developing world. As Kiva Zip grows, we need to remain flexible and self-aware to keep up with important changes. Kiva is ultimately a conduit to facilitate your collective impact, and we will always take your comments seriously and try our best to reflect your feedback in our work. Thank you all for being present, vocal, and critical through the years.
Kiva Zip Kenya ...(continued)
A Little Kindness Goes a Long Way FEATURED
“I feel like a millionaire everyday…" - Nestor
"I couldn’t have done this without Kiva Zip." - Mechele
"Seeing people contribute from all over the world is so cool…These loans really do change lives.” - Kathryn
Those are just a few of the Kiva Zip borrowers who want to thank you for your support. You believed in someone’s dream and abilities, assisted in strengthening the entrepreneurial spirit in the United States and are setting a great example for others to “pay it forward.”
Thanks to the support from the Kiva Zip community of lenders, like you, borrowers’ lives have improved and the world is a kinder and more interconnected place.
Read for yourself what some of these borrowers have achieved with your loans and what they got out of Kiva Zip:
"I was lending money on Kiva Zip to like-minded entrepreneurs and projects. Now I'm happy and thrilled to be on the other side of the equation."
- Fran, New York, NY
“Let me share with you that I already feel like a millionaire every time my day ends and think about a customer of mine has got what he/she was looking for because of me and Pascana. May the Lord return you twice what you have done for me!” - Nestor, Lorton, VA
“It is overwhelming to know that there are great people in this world!” - Martin, Shacklefords, VA
“I couldn't have done it without Kiva Zip and everyone who lent to me." - Mechele, Pittsburgh, PA
"Seeing people contribute from all over the world is so cool and we are so thankful for all the support we've gotten with this loan." - Hope, Wellfleet, MA
"I’m making my first batch of chocolate this coming week in the new space, and am grateful to get to share the experience with the Kiva Zip family!"
- Jonas, Windsor, CA
"I have expanded my music instruction business with my new skills and my business is growing! These loans really do change lives." - Kathryn, Red Bank, NJ
"The team supports you with great ideas and becomes your cheering team. I could not have gotten this far without Kiva. Thank you Kiva!" - Gail, New York, NY
"It warmed my heart to be the recipient of the generosity and lovingkindness of the lenders that contributed to the funding of my loan. I'm eternally grateful for their belief in me and the mission of my business." - Dallas, New York, NY
"Kiva helped me launch my pet boarding business by providing money to purchase supplies, dog runs, and advertising. I have since purchased land next to my local dog park and will be expanding to add an additional 17 kennels and provide grooming & training services in September of this year. Thank you so much!" - Rachael, Moreno Valley, CA
"I not only wanted to raise money to implement my business but I also wanted to be responsible with the loan and pay it back. With Kiva Zip being one of the only no-interest loans for start-up entrepreneurs, it was the perfect platform." - Christina, New York, NY
"It has been an honor and great experience working with you guys." - Griselda, Oakland, CA
"Thank you very much, Kiva." - Weston, Warm Springs, OR
"Having the opportunity to interact with such supportive lenders has been a tremendous benefit to our business." - Vanessa, North Chesterfield, VA
"Receiving a Kiva Zip loan in 2014 helped me to launch my business this month!" - Yebom, Pittsburgh, PA
From the late 1800's to the early 1900's, Philadelphia was such a strong and diverse manufacturing hub that it was known as "The Workshop of the World". The city was in a perfect position to take on this distinction due to a rail system that connected it to other major port cities, and for its location on the Delaware River. From the ability to ship products virtually anywhere in the country, came a city filled with entrepreneur's establishing industrial startups.
During this time period, many cities had strong manufacturing, but most of these cities typically tended to have a competitive advantage in one distinct industry, such as the automotive industry in Detroit. Unlike these cities, Philadelphia was a strong player in hundreds of industries ranging from knitting mills and breweries, to naval equipment. Of the strongest industries was the textile industry, one could design their product, get the material, dye it, and manufacture it all in Philadelphia. Philadelphia was attractive to individuals from all over the world, and many immigrants moved into the region to not only be laborers, but also entrepreneurs. The wages were good, and the job opportunities were bountiful.
After WWI, the Great Depression hit, and the economy in Philadelphia suffered. With the start of WWII industry picked up again, but only for a short period of time. After the war, manufacturing changed. Manufacturing was cheaper in the south, and many companies began relocating, and eventually left the country altogether. Modern manufacturing was also different, and no longer required the types of factories built all over the city. Repurposing these buildings was expensive, and land for additional modern factories was limited. Philadelphia soon became a city filled with shells of abandoned factories and a disappearing manufacturing scene.
Decades have passed, and to say that Philadelphia is still a city filled with shells of abandoned factories wouldn't be a lie, there are many all over the city. But, to say that Philadelphia is still a city with disappearing manufacturing, would be a lie. Manufacturing is on the rise, but not in the historical sense that the city is used to. Gone are the days, not just in Philadelphia but throughout the nation, where we will see large factories emerging. Today, we see an emergence of small batch manufacturing, and we have a new name for it, we call it "the makers movement". Don't be fooled by the hipster terminology, this is the return of manufacturing.
There is a growing demand for clothing, jewelry, food, and other artisanal items to carry the "Made in Philadelphia" brand. Philadelphians are proud of their past, and want to see it return. Yet, for years these types of small businesses have had an incredibly difficult time accessing capital, especially those businesses who are in the early stage of their life cycle.
This is all about to change. In December of 2014, Kiva Zip, in conjunction with the City of Philadelphia's Department of Commerce, launched Kiva City Philadelphia. In Philadelphia, Kiva Zip has seen a majority of loans go to entrepreneurs in the 'maker's community' - 21% of loans went to arts, craft, and fashion businesses, and 36% of loans went to food producers or restaurants. Maker's like Scott Niemet of Olliver Lifestyle,producing small batches of hand-made, ethical and vegan candles in South Philly; like Peter Merzbacher of Philly Bread(now rebranded: Philly Muffin) producing literally some of the best bread you'll ever have out of his small bakery in Olney where he employs the local population; and like Terese of Terese Sydonna,bringing Philadelphia back to its roots in the textile industry with her hand-made in Philadelphia ready-to-wear women's clothing and accessories. Kiva Zip borrowers and the Kiva Zip trustees who support them, like The Food Trust,The Enterprise Center, NextFab, and the Philadelphia Fashion Incubatorare committed to the "Made in Philadelphia" brand, committed to bringing back small batch manufacturing- and Kiva Zip is committed to helping them do so. ...(continued)
Keenya Kelly knew she needed capital to build up her business Return of the Curls which provides African American women with education, training, and products to help them move away from harmful hair chemicals to embrace their natural hair. But she also recognized the difficulty in obtaining a big bank loan along with the necessity of building her business credit.
So she decided to start small and work her way up. In January 2014, Keenya took out her first Kiva Zip loan for $500 to pay her employees and develop her marketing. She repaid her loan ahead of schedule. She then started planning for her second loan for $1,000 to further marketing. Keenya received the loan in July 2014 and again repaid it ahead of schedule.
She’s now seeking a third loan. This $2,000 loan will help her develop brand awareness and increase Return of the Curls’ reach. It’s remarkable what these small sums of money have been able to accomplish so far.
Keenya has hired 4 interns. She’s been able to pay a designer to work on branding and marketing. She put a deposit on event space and successfully hosted a major Return of the Curls hair show in the Richmond, Virginia area. Each loan has offered positive returns for the business, but has also provided significant returns for the women she assists and the community as a whole.
Her Kiva Zip experiences have affirmed how much impact people can create when they work together. She greatly appreciates just how hard people work for the money they make and their complete willingness to invest it in and share it with someone they might not know. It also instills accountability, making her feel like she can “put a face of a lender to each dollar” rather than a bank building. And that inspires her to always make her repayments while actively working to make her business grow and thrive.
More importantly for Keenya, Return of the Curls has been able to successfully promote women’s empowerment and self-acceptance, sharing messages of love, faith, fashion, and friendship via its social media accounts and annual show. Return of the Curls has become “more of a way of life than just a hair show.”
Dear Lenders, Trustees and Borrowers,
This year has seen many important milestones for the Kiva Zip team. We recently passed 5,700 loans funded, and have distributed over $1.1 million to Kenyan borrowers. While this growth is exciting for the future, it’s also posed new challenges as we work to scale our processes to reach more people. We always appreciate your thoughts and communication, and we would like to address some of the issues you’ve raised around loan disbursement.
Delays in loan disbursement from Kiva Zip can happen for several reasons. You may be familiar with the Joyful Women Organization (JOYWO), an NGO in Kenya that has helped spur some of our recent growth. JOYWO’s individual borrowers are often among a group of borrowers whose funds will ultimately be distributed simultaneously. If a group of 10 borrowers are fundraising their loans, JOYWO requests that no funds be distributed until all the loans in the group have fundraised. This can result in loans sitting as 100% raised (but not distributed) for some time, which will occur until the rest of the loans in the group have been funded. We understand that this can be frustrating to our lenders who are anxious to see the progress of a loan project, and we will try to do a better job of highlighting these groups on loan pages in the future.
Another reason for delayed loan disbursement can occur when a borrowers M-PESA number is entered incorrectly. With limited resources on the Kiva Zip team, this can go unnoticed for quite a while before it is brought to our attention. Borrowers and trustees: we cannot stress enough how important it is to ensure this information is entered correctly! While we are working towards a more systemic solution to this problem, we appreciate your patience and vigilance in pointing out these issues.
An important note about loan disbursements this month: this past Tuesday, December 16, was the last day that loans will be distributed until January 6, 2015. Over the years, we’ve noticed a drop in repayment rates around the holidays. After much deliberation with trustees, we’ve decided that temporarily suspending disbursements for 3 weeks around Christmas and the new year is the best course of action for all parties. We understand that with the hustle and bustle of the holidays, not only are many businesses closed, but business owners can become distracted both socially and financially. This temporary measure relieves borrowers from the pressure of a new loan to repay during the holidays, and gives them time to focus on themselves and their family obligations. We’d love to keep disbursements going year-round, but for now we believe this is the best solution for borrowers, lenders and Kiva Zip.
Thank you so much for your patience during this phase of our growth. Again, we cannot express enough our appreciation for your continued support and communication. Whether you are a lender, borrower, or trustee, you are an integral part of our work. Your feedback will always be valuable to us, and I hope this has answered some of your questions. Thanks for an exciting year so far, and we can’t wait to see what 2015 has in store for us.
Kiva Zip Kenya Team ...(continued)
Here at Kiva Zip, we are suckers for a good success story. One of the issues we grapple with on a daily basis are how to get our borrowers fully funded. Seeing an loan expire is never a great feeling and disappointing for all. One strategy we implemented starting in the beginning this year was to require borrowers to invite at least 15 lenders from their own network of family, friends, colleagues, etc in the period of 15 days before we show them to our community of lenders. This way, borrowers come out of the gates with a head start.
We've seen a good deal of borrowers who have successfully gotten their networks involved, and one of our favorite stories is that of James and Jeffrey Atto. The two brothers own Atto and Sons in Birmingham, Michigan where they manufacture and distribute wholesome, healthful, textural, and delicious supplementary foods from 50 year-old recipes passed down by their grandfather. Their products include Torshi (curried pickled vegetables), roasted lentils and fresh vegetable relish.
James and Jeffrey applied for a $5,000 Kiva loan in order to pay for packaging and marketing materials as well as production equipment and licensing.
"We were checking our profile every few hours and it kept growing and growing. We were asking ourselves, who is loaning all this money?" James laughed.
Within 15 days and without having to leave their private funding raising period, James and Jeffrey had raised the full $5,000 with only 15 people having lent the entire amount. "We very surprised and honored that our loan was fulfilled so quickly," James said. They had been promoting the loan in emails to family and friends as well as linked their Kiva Zip page on their company's Facebook.
Not only was is a great start for the Atto brothers, it was a great reminder to the Zip team how awesome our borrowers on Kiva Zip are and that with the Kiva Zip platform and easy marketing and support, business owners and entrepreneurs can really thrive. It was also great proof of our amazing lender base. Seeing so many people rally around a business owner is a confirmation of what we call "social underwriting" - looking to a borrower's network to vouch for their character.
Advice James has for current and future borrowers is to make your pitch personal and to clearly identify your mission so that it can resonate with others. "Reach out to people and make it personal, not just a mass text or email. Talk about your story and your cause. Some people may not even be aware of your company," James said. He added that some people reached out to them and said they weren't even aware they had started a company and wanted to donate.
About two and a half years ago, my co-founder Kwami Williams and I had just learned about an amazing tree called “Moringa” that had the potential to end malnutrition and poverty in rural Ghana. The tree’s oil seeds, rich in antioxidants and anti-aging moisturizing agents could be processed into valuable cosmetic oil for hair and skin care. The leaves of the same tree, rich in iron, calcium, protein, and vitamins could be used as a stable food source for farmers. We started to piece together the foundations for a dream to utilize this incredible tree at scale.
Just over a year ago, we were stuck. We were too small for most social impact investors and too risky for banks. The interest rates on credit and typical microfinance loans were astronomical. We didn't want to give up equity to just any investor - we needed someone who truly understood our social mission and vision. Kiva Zip filled that crucial financing gap. When University Incubator offered us the opportunity to crowdfund a Kiva Zip loan to purchase the last of the machinery we would need to get our Moringa oil processing center up and running, we were thrilled. What better investors to have than Kiva Zip Lenders?
We started to truly understand the significance and interconnectedness of the Kiva Zip family when two of our lenders - Ester and Fredrik - came all the way from Sweden to visit us at MIT’s D-Lab. Their family was among the most generous backers of our indiegogo crowdfunding campaignlast December and the earliest adopters of our retail line of Moringa oil, hair and skin care products. You can check them out on our website.
We shared with them our earliest prototypes and our plans for the future and they shared their history of involvement in international development projects in Kenya and throughout sub-Saharan Africa. It was a magical moment- meeting a stranger from across the globe who believed in our dream enough to take a chance on becoming an integral part of our story.
Perhaps it is an understatement to say that Kiva Zip Lenders are a part of our story. Without the continued interest and support of conscious consumers and lenders like you, there wouldn't be a story at all.
As we take the next step in bringing our retail line to the masses to lift millions more smallholder farmers out of poverty, there is nowhere we would rather turn for support. We've just launched a new loan through the Kiva Zip platform. Investment will go toward launching new farms (providing much needed inputs such as seeds, fertilizer, plowing services, and training) and building a sustainable market for our products. Check us out and help us launch this next chapter of our story. ...(continued)
Small Business Saturday is approaching quickly this year - taking place next Saturday, November 29th!
With the goal of helping businesses get more customers through their doors, American Express launched Small Business Saturday in 2010 and it has grown each year into a powerful movement. It is a day dedicated to encouraging people to shop small and local on the day after Thanksgiving.
Kiva Zip wanted to incorporate the awesome small businesses we work with all over the United States. So, this year we not only want to encourage you to visit these businesses, but we want to know about it!
Take a photo at the business(es) you choose to patronize and post it to your Twitter account using the hashtags #WhyIZip and #SmallBusinessSat, and tag us in your post by using @kivazip.
As our way of thanking those of you who participate, we will send a Kiva Zip t-shirt to each person who posts a photo who tags us and uses those hashtags - so keep an eye out for a message from us asking you where we can send the shirt.
More important than the comfortable and fashionable t-shirt, by shopping at places other than your typical big box stores, you'll be supporting your local community and a business owner who is also investing in their community.
There's lots going on in Louisville, Kentucky right now!
Three weeks ago, I had never been to the city. On November 24th, I will be there for the third time in six weeks!
Two weeks ago I was in town to present Kiva Zip to a room full of 40 mayors, as part of the Mayors Conference on Entrepreneurship, hosted by the Kauffman Foundation. Not only did I enjoy my first ever ride on a police-boat-escorted-hundred-year-old-bourbon-laden-paddle-steamer (The Belle of Louisville), but I was also inspired by the conference to write this blog post on how I believe Kiva Zip can play a much-needed role in supporting "unsexy entrepreneurs" with financial and social capital.
On that same trip, I was also privileged to attend Village Capital's agricultural cohort training course, and met a dozen passionate social entrepreneurs working (and pitching!) hard to create products and services designed to make life easier for America's farmers.
Speaking of farmers, this second trip was to attend the Slow Money National Gathering -- an inspiring and diverse convocation of farmers and financiers, hipsters and hippies aimed at building a more equitable and sustainable agricultural system. I was blown away by how much enthusiasm I experienced for the Kiva Zip model -- both from a financial perspective (zero interest loans that not many other lenders are making), and a social perspective (connections, customers, and community). I had the honor of speaking on a panel entitled Slow Internet -- mischievously moderated by Bryan Welch, who runs Mother Earth News, among other publications. And I had the even greater honor of meeting a number of farmers who had benefited from Kiva Zip loans as borrowers. I was particularly struck by a conversation with Andre Barbour from Canmer, Kentucky, who told me how moved he was to have 270 people from all around the world lend to his fourth-generation family farm.
Today sees the kickoff of the Neighborhood Economics Conference, which our Louisville Fellow David Taliaferro is attending, to represent Kiva Zip. As the name implies, it's a perfect fit with our team's commitment to serving the "neighborhood entrepreneurs" that inject so much color and character into our communities, and are so often overlooked in an economic development discourse that primarily focuses on thousand-employee companies and hockey-sticking tech startups.
Then last night the conference attendees were hosted by Christy Brown, on whose potent steps we heard from Wendell Berry and Vandana Shiva, named to Forbes' list of the Top Seven Most Powerful Women on the Globe. Over the last few months, Christy has been an invaluable champion of the Kiva Zip program in Louisville, and it's in large part thanks to her support that I'm coming back to Louisville for the third time, in a couple of weeks...
...And for us on the Kiva Zip team, that's the most exciting trip of all, because we're delighted to be unveiling Kiva City Louisville on November 24th! Kiva's Co-founder and President Premal Shah will be in town to officially launch the program at the Muhammad Ali Center, which seems appropriate, given, the legendary boxer's dedicated commitment to humanitarian causes. Over the last few months, David has been working hard to cultivate partnerships with dozens of trustee partners, and get the word of Kiva Zip out to entrepreneurs, farmers and small business owners throughout Louisville and the surrounding area. Stock Yards Bank and Trust, the Horseshoe Foundation of Floyd County, and the Rotary Club of Louisville have all provided capital to match loans, and the Owsley Brown II Charitable Foundation, Access Ventures, Metro United Way, and the James Graham Brown Foundation (as well as Stock Yards) have generously given the grant funding we need to make a Kiva City happen. We're wondering how quickly we can support 1,000 small business owners in Louisville with zero-interest, crowdfunded capital.
As you can tell, Louisville is abuzz with creativity and entrepreneurship, and we hope that the Kiva City Louisville program can help contribute to the city's very palpable spirit of optimism and citizenship.
One thing (or rather, person) that has struck me on both of these trips to Louisville has been the city's mayor, Greg Fischer. I am a firm believer that the culture of an organization (and I guess, a city!) is set from the top. An entrepreneurial CEO will lead an entrepreneurial company. And an entrepreneurial mayor will lead an entrepreneurial city. And Mayor Fischer demonstrates the latter very well. He is also an impressively gifted communicator. He did a great job of conveying Louisville's commitment to being an entrepreneurial city at the Mayors Conference, and last night he diplomatically illustrated a powerful parallel between the Veterans Day celebrations that were going on in the streets yesterday, and the Slow Money conference going on inside -- namely, that both groups of citizens were demonstrating their commitment to a cause greater than themselves, whether it be service in the name of their country, or the environment. And of course, if good communication is based upon consistency, Mayor Fischer's enthusiastic evangelism of Bourbonism ("the act of using Kentucky to enjoy Bourbon and local food"), is surely a masterclass!
Mayor Fischer is going to be announcing the launch of Kiva City Louisville on Monday 24th November, so here's hoping he is saving his most inspiring speech until last!
[Note: If you live in or around Louisville, and you are interested in attending the launch of Kiva City Louisville on November 24th, please shoot David an email at David.Taliaferro@fellows.kiva.org] ...(continued)
I was just at the Slow Money national gathering in Louisville, Kentucky -- an inspiring couple of days! Refreshingly engaging panel with the title "Slow Internet", great connections and conversations with dozens of Kiva Zip borrowers and trustees, and a plethora of incredible speakers, including Wendell Berry, Severine Von Tscharner Fleming, and the Mayor of Louisville Greg Fischer.
Sometimes at large conferences like this, when questions are opened up to the floor, things go awry. Cringe-worthy self-promotion ensues, and at the end of the "question", you're left wondering "where was the question?" But when Jack Byrns had the microphone lowered for him, the audience's interest was piqued. I am really bad at guesstimating children's ages, but Jack must have been around nine years old (eleven? Seven? Sixteen?). In a bright, clear voice, brimming with hope and curiosity, he asked:
"What I want to know is...how can we help a farmer? I mean how...can we...help a farmer?
This was a lightbulb moment for me, because I knew a very easy way to answer Jack's question...make them an interest-free $5 loan on Kiva Zip!
There are a myriad more involved ways as well of course -- shop at your local farmers market, write letters to your Congresswoman, join your local Slow Money chapter, etc. But the beauty of making a Kiva Zip loan is that it is so easy, so quick, and so cheap! It's the 'gateway drug' to deeper participation in a sustainable agricultural ecosystem! Imagine if we get thousands and millions of people throughout America, and the wider world, financially supporting sustainable farming on Kiva Zip -- even with as little as $5. What good fruit might be reaped in the future, from the interest, engagement and passion planted with those seeds?
So I cornered Jack and his mom, a farmer from New York, after the session (Jack's was the last question), and within five minutes Jack had answered his own question, by making a $5 loan on Kiva Zip.
So how can you help a farmer, entrepreneur, small business owner or artisan? Make them a $5 Kiva Zip loan! It's only a little help, but as Tesco put it, Every Little Helps.
Several of you asked recently why we have been growing so rapidly, and what our plan for the future is. While we are excited at the prospect of reaching more Kenyan borrowers and expanding our reach, we don’t want any of you to be confused about our growth or left in the dark on our plans. It is for the sake of transparency, and respect for the important role that all of you play, that we are writing to you now about our plans for the future of Kiva Zip.
On August 19th we added Joyful Women Organization (JoyWo) as a network trustee. JoyWo is an NGO that works with nearly 8,000 women in 32 counties throughout Kenya. These women are organized into small groups that do table banking, and our collective goal is for each one of these groups to become a trustee. Since August, they have produced 191 trustees and have posted 600 loans to date. With their help, we have exceeded our monthly targets for number of trustees making their first endorsement (44 in October), the number of loans raised per month has passed 400, and the average time from trustee invite to making their first endorsement has dropped to just 20 days.
These large organizational partners are a great way for us to expand the social underwriting and trustee-model of Kiva Zip, and we’ve realized that this is a great way for us to quickly reach new groups of people. As we grow, we plan on having more organizations like JOYWO to gain more trustees with access to new borrowers. While this is the first large jump in the number of loans that we’ve experienced, it won’t be the last. We hope to continue to pursue these larger organizations as we grow, while staying true to our mission, our vision, and the needs of our trustees.
These past two months have seen exponential growth for Kiva Zip, and we hope this hasn’t caused undue stress for any of you. Let’s remember that Kiva Zip is still a small, experimental part of kiva.org, and change must be embraced if we are to find a model for Zip that can be translated to different regions around the world. Each and every one of you, our trustees, is critical to our work. We could not do this without you, and we want to make sure you are on board with these changes as we move forward. If you have any questions or concerns, please reach out to us.
Kiva Zip Kenya Team ...(continued)
I’m currently on a flight back from Louisville, where I was honored to be invited to present Kiva Zip to a conference of mayors representing cities throughout America. The conference was organized by the Kauffman Foundation, and the focus was on entrepreneurship. In his opening address, Dane Stangler (from Kauffman) highlighted some reasons for pessimism about the future of U.S. entrepreneurship – for example, the concerning downward trends in small business creation rates over the last two decades.
But he also posited some reasons for optimism. One such reason was the growing proliferation of accelerators and incubators focused on, well, accelerating and incubating entrepreneurs – Up Global, 500 Startups, Three Day Startup, etc. Now don’t take what I’m about to write the wrong way – I think these organizations, and this movement, is awesome. Its orientation towards action and lean startup principles are proving highly effective and valuable for the entrepreneurs they are supporting. And it provides a welcome contrast to traditional technical assistance, which is, at times, at risk of becoming overly formulaic and academic.
But at Kiva Zip, we observe two things:
Firstly, that (as Josh McManus from the Knight Foundation eloquently put it at the Mayors Conference on Entrepreneurship) “in a city like Detroit, where 85% of the population is African-American, the populations of these incubators is overwhelmingly ‘whitewashed’ “.
And secondly, that this movement only really addresses the tiny minority of America’s 25 million entrepreneurs that are extremely high growth, usually technology-focused, and “sexy”.
On the first observation, where African-American and Latin-American entrepreneurs are three times more likely to see their small business loan applications declined than their Caucasian counterparts, we are proud that 60% of the Kiva Zip loans we have made over the last three years have been to ethnic minority entrepreneurs.
But in this blog post I want to focus on the second observation. Because attending this conference really helped me realize that, while we are excited for Kiva Zip to continue supporting some high-growth, “sexy” startups, they are not our focus. Rather, our focus is on coffee shops and barbershops, on cleaning companies and plumbers, on Etsy artisans and Ebay sellers, on taco trucks and fashion trucks, and on small-scale farmers and food producers. These small businesses might be conventionally classified as “unsexy”, but we see them creating and sustaining millions and millions of jobs, injecting color and character into our neighborhoods and communities, and representing the vast majority of businesses in America.
A little bit of everything
We believe that a healthy economy needs both “sexy” and “unsexy” small businesses. The rapidly-growing tech startups may turn into AirBnBs, Lyfts and Pinterests, creating thousands of jobs. But their employees will get their clothes dry-cleaned, their nails done, and their coffees brewed at the small businesses in their neighborhoods.
While it might seem to the economic development department of a city (or the country) that the pursuit of both these ends of the entrepreneurial spectrum could be conflicting or distracting, the encouraging thing is that there is actually important synergy between the two worlds:
Firstly, in a positive way. I don’t know many Square, Google or Yelp (or more nascent startups) employees who would choose Starbucks over an artisanal local coffee shop. Entrepreneurs appreciate other entrepreneurs – even “unsexy” ones. I also suspect that where cities foster a vibrant and thriving bedrock of “neighborhood entrepreneurs”, they forge a cultural fabric of creativity and diversity that is also conducive to more “sexy” entrepreneurship. And of course, let’s not forget that the core customers of Square, Google and Yelp are those millions of “unsexy” entrepreneurs.
And secondly, in a more ominous way. In San Francisco, there has been significant friction in recent months and years, between big tech companies and existing residents, who are concerned by rising rents and costs of living. If we (collectively) refrain from investing in the small businesses, and associated economic vitality, of neighborhoods like San Francisco’s Tenderloin (where Twitter and Square recently moved their headquarters to), Chicago’s South Side, Pittsburgh’s Homewood, or Louisville’s Shawnee, their economic marginalization will bring growing problems of crime, poverty and social immobility. In cities that neglect “unsexy” small businesses, the tensions we are currently witnessing in San Francisco will escalate, stymying the expansion of these high-growth companies, and making these cities less attractive places for these companies to locate into. Cultivation of high-growth entrepreneurship must go hand in hand with support for neighborhood entrepreneurship. And the development of an ecosystem for neighborhood small businesses will handily and symbiotically accelerate the development of high-growth, high-tech companies.
So how does Kiva Zip fit in?
Over the last three years, we have certainly supported high-growth entrepreneurs on Kiva Zip. In July 2013, we made a $5,000 loan to MakersKit, endorsed by Zaarly. In the words of co-founder Mike Stone, the injection of capital “helped us grow faster and better than we could have ever imagined”. MakersKit went on to raise $1.5M in seed funding to rapidly expand their business. And Matt Wilkins, creator of Pedal Forward (who received a $5,000 Kiva Zip loan in August 2014), recently shared the stage with Bill Clinton at the Clinton Global Initiative in New York, because his company was deemed to have so much exciting potential.
Many superficially “unsexy” businesses can also produce rapid growth in revenues and employment. One Kiva Zip borrower in Oregon borrowed $5,000 to upgrade his equipment, and then won government contracts worth over a million dollars. And Victor, one of our first ever cohort of six borrowers, borrowed $5,000 to open Cafeto coffee shop in early 2012, and has since opened another coffee shop (partly funded by a larger, $10,000 Kiva Zip loan), and (just last week) a full-scale restaurant in South San Francisco. Collectively, this one Kiva Zip borrower, and his three establishments, have now created 15 jobs. On the Kiva Zip team, we’re encouraged by these success stories, and the analogy with the venture capital business model, which is sustained by the tiny minority of investments that “go big”.
But the vast majority of the small businesses funded by Kiva Zip will never take over the world. They will remain small. But they will provide jobs and incomes for their small number of employees, and a significant source of pride and passion for their hard-working, entrepreneurial owners. And they will infuse life and energy into the street corners and commercial corridors that they culturally and economically enhance. These neighborhood entrepreneurs might be “unsexy”…but on the Kiva Zip team, we’re pretty turned on. ...(continued)
I was recently trying to get a mortgage for a house that my wife and I were looking at buying. After 30 minutes on the phone, answering questions about my income, assets and debts, I was declined for the mortgage. I asked if there was any room for flexibility, and the mortgage broker said something that really struck me: “Sorry sir. Everything in our industry is black and white”.
At the end of a long, slouching call, that one sentence made me sit bolt upright, write it down, and now write a blog about it. Because at Kiva Zip, we’re trying to disrupt that paradigm, and this (lending) industry. We’re trying to inject shades of grey, or (even better) rich, vibrant colors into the process by which small business owners can access the capital they need to launch or grow their businesses.
There are a myriad of ways in which we are challenging the conventional “black and white” approach, but I’m going to highlight two – firstly, how we underwrite loans; and secondly, how we approach delinquent payments.
Character based lending
When I was applying for the mortgage I mentioned above, I was underwritten on a purely financial basis. What was my credit score? How much money did I have in my bank account? How much did I earn last year? How much did my wife earn? What debts do I have? What is my net worth? At no point was I asked for character references. And the mortgage broker did not know me personally. It’s all about numbers and statistically-tested algorithms. I didn’t qualify for the mortgage because, on average, people in my financial standing would not be able to keep up with the payments in more than (e.g.) 10% of cases. Now don’t get me wrong, this numerical, financial approach is very useful. And it works. It’s why banks and lenders are able to maintain high repayment rates, and make money.
But it doesn’t paint a full picture. By failing to take into account the character of the borrower, or social data points (like the strength and extent of a borrower’s trust network) on an individual, case-by-case basis, this average-based approach misses out on nuance, and thereby disqualifies many would-be borrowers that deserve, and could pay back, a loan. At Kiva Zip, by focusing on these information gaps that exist in conventional, financial underwriting, we can introduce flexibility and “color” into our underwriting process, and help a lot more people than a “black and white” approach allows.
In July of last year, we launched Kiva Zip in Richmond, Virginia – thanks to funding from Capital One, and support from Senator Mark Warner and Mayor Dwight Jones. Unfortunately, one of the borrowers we made a loan to was taken seriously ill just as she received the money. In a “black and white” lending world, this personal tragedy would have been met with stern letters, late fees, and spiraling interest payments. I imagine there would have been no “exceptions”. In the Kiva Zip community, the borrower’s proactive communication on her conversations tab was met with no fewer than 15 comments from her lenders – every single one of them positive, affirming and understanding. The unanimous message was “we are so sorry to hear of your sickness. Make sure you focus on getting back to full health first. You can pay back the loan later”. This empathy and grace on the part of her community of Kiva Zip lenders blew me away, and epitomizes the “color” that comes from re-injecting human relationships and people into a financial system that (over the last couple of decades) has become overwhelmingly transactional, and subsumed by the pursuit of profit at all costs.
Now the borrower has recovered, and is paying off her loan. With any other lender, the accumulation of late fees and interest rates might have made hers an unbearable debt burden by this point, and she may have weathered one crisis of health, only to be confronted with financial bankruptcy. But on Kiva Zip, even a year later, she still has only and exactly the $5,000 principal to repay. This might be stretching the point, but on some small level, I can’t help but wonder if the flexibility she experienced from her community of Kiva Zip lenders, in stark contrast to the intransigence that she probably would have encountered from a more conventional lender, might even have helped her emotional and physical recovery. There is ample evidence linking financial worries with emotional stress, the detrimental physical effects of which are also well known. If our financial system was more people-focused, would we all be a little less perpetually worried about money, and a little happier as a result?
In a black and white lending industry, we on the Kiva Zip team want to thank all of you, our lenders, for enabling us to dream of splashing vibrant colors on the canvass.
Now I’m not saying that I should have qualified for the mortgage. But that’s because of my shady character, and dubious circle of acquaintances, rather than the paltry state of my finances.
We’ve been talking a lot about “social underwriting” on the Kiva Zip team this year, because we’re really excited about the innovations we’re rolling out, the resulting data we’re seeing, and the potential of this concept to do a lot of good. So befour I fourget, here are four ways in which social underwriting is manifested in the Kiva Zip program, four reasons why we think social underwriting is awesome, and two conclude, two definitions of what we mean by social underwriting.
How is social underwriting instantiated, specifically, in the Kiva Zip program?
- (Almost) every Kiva Zip loan is “endorsed” by a “trustee”, who vouches for the character of the borrower, based on a (usually) long-standing relationship. A great data point here is the correlation between the length of this relationship, and the repayment rate of loans. Where borrowers have known their trustees for less than a year, their repayment rate is 85%. For loans with a borrower-trustee relationship of more than a year, this number goes up to 91%.
- Recently, we started asking borrowers to provide us with three “references”, as additional data points on their character and trust network – much as an applicant for a job might provide references with their resume. It’s too early to tell if this social underwriting step will have a positive impact on our repayment rate, but we’re intuitively optimistic.
- Thirdly, and perhaps most importantly, in January of this year, we required all U.S. Kiva Zip borrowers to recruit a number of their friends and family network to lend to them in private, before we post them publically to the website. Not only does this demonstrate that a borrower has a trust network that believes in them, and is willing to declare that financially (at least in a very small way). And not only does this “private fundraising period” reinforce the commitment of the borrower to the Kiva Zip process, and paying back their loan. But it also demonstrates the entrepreneurial spirit of the borrower. As a small business owner in America, if you can’t get 15 people in your network to lend you $5, I would have serious reservations about your ability to succeed as an entrepreneur – what I believe to be the hardest (albeit most rewarding) job in the world. Another great emerging dataset here – Kiva Zip loans with less than 15 invited lenders have a repayment rate of 88%. For loans with at least 15 invited lenders, at least for the time being, we’re running at 99.7%!
- Lastly, every Kiva Zip loan needs to be crowdfunded by our community of lenders. That means thousands of pairs of eyes on every loan, helping us to identify suspicious information discrepancies, and assess whether a small business owner has the marketing ability and business savvy to make it as an entrepreneur, and pay back their loan. I am sure every lender makes a snap “risk assessment” in a different way. Does the borrower’s poor photo suggest they won’t be able to market their business effectively? Does their low number of Facebook likes suggest they don’t have a strong customer base? Does their loan description seem vague and unthought through? Does their refusal to respond to comments on the conversations tab suggest a reluctance to communicate, which might spell problems down the line? Does their Kiva Zip loan profile just seem to lack the passion that every entrepreneur needs to succeed? We believe that thousands of different, complementary approaches to “due diligence” will result in better underwriting decisions – that there is indeed wisdom in the crowd…and again, the data backs this up. Loans with at least 20 lenders have a 92% repayment rate on Kiva Zip. For loans with less than 20 lenders, that number drops significantly – to 66%. This is one reason why we see value in some “expirations” on the platform, and why we continue to operate an “all or nothing” approach, rather than the “keep what you raise” model that IndieGogo allows campaign owners to select if they want to.
So in summary – the four specific components of social underwriting, as implemented in the Kiva Zip program, are (1) the endorsement of the trustee, (2) peer references, (3) the requirement of borrowers to recruit some friends and family members to fund their loan before it goes public on the website, and (4) the decentralized nature of crowdfunding. But by this time next year, we’ll hopefully have added some more!
Why are you guys on the Kiva Zip team so excited by this social underwriting concept?
- It enables us to make loans to many small business owners that conventional underwriting would reject. Common reasons for the 8,000 small business loan applications that are rejected by conventional lenders every day in America include a damaged or insubstantial credit history, an absence of collateral, or insufficient cashflows. Illustratively, conventional underwriting dictates that, on average, the probability of each of these 8,000 small businesses repaying their loan is less than 95% (or whatever the repayment rate target is for the conventional lending institution). What social underwriting enables us to do is to consider data on the borrower’s character and trust network, not considered in the numbers-based, conventional underwriting approach, and use this social data to paint a more sophisticated, nuanced picture than the algorithm- and average-based, conventional approach allows. This allows us to say that, whereas on average those 8,000 small businesses will have a repayment rate of less than 95%, there are actually 200 (or 1,000, or 5,000) would-be borrowers among them, whose probability of repayment, when you account for social data, is actually 98%, and who therefore merit a loan.
The other way in which social underwriting enables us to expand access to capital is because it is practiced by a community of thousands of people, rather than a centralized financial institution. The financial institution is lending large sums of money (e.g. $5,000 at a time), and is usually focused on maximizing profits, so it has a very low tolerance for risk. The community of thousands of people is lending in tiny increments (e.g. $25 at a time), and is more motivated by creating a positive impact in the life of a borrower whose story resonated with them, or financially and emotionally supporting a small business in their own neighborhood, so they are able to tolerate a higher risk of default on the loan. Our repayment rate target for Kiva Zip is 90%, not 100%. Because we believe that if we really want to make a difference for entrepreneurs in places like inner-city Detroit or the Mississippi Delta, we need to accept higher risks than profit-seeking financial institutions are willing to stomach.
When you combine the ability of social data to plug information gaps that conventional underwriting does not account for, with the patient, risk-tolerant, generous capital of Kiva Zip’s community of lenders more motivated by social impact than financial return, you are able to say yes to a much higher proportion of loan applications than financial underwriting permits.
- Social underwriting works as a way to manage risk! See the data points above for three great examples of this. And we’re seeing many other examples of the power of leveraging social data to analyze risk. Consider that Kiva Zip loans with a Yelp profile have a 99% repayment rate, compared to 87% for loans that do not; or that loans with a business Facebook page have a 92% repayment rate, compared to 83% for loans that do not. We’ve only scratched the surface of social underwriting over the last three years. But we believe we’re on the right track.
- Social underwriting is cheap! It’s very expensive for a conventional lender to pore through the credit reports and financial statements of borrowers, and follow up on any discrepancies or question marks. And it’s also very time-consuming for the borrower to assimilate these financial records, especially when many small business owners’ financial transaction histories are far from perfectly organized! For the Kiva Zip team, it’s very cheap for us to assess the riskiness of a loan by requiring a borrower to recruit a number of lenders from their own personal network, or simply waiting for our community of lenders to fund it. Many banks are simply unable to underwrite microloans to small businesses because the cost of underwriting is prohibitively expensive. Social underwriting can help to change that.
- Lastly, social underwriting can drive growth! Normally, improved risk management is in stark conflict with growth. If you aim for higher repayment rates, you implement more stringent criteria around FICO score and collateral requirements, and the number of businesses you are able to approve for loans decreases, probably exponentially. By contrast, the private fundraising period that we rolled out in January has actually been the biggest driver of our growth this year! That’s because, on average, every loan that we post results in 20 new lenders being recruited to make their first loans on Kiva Zip. Our hope, and what we are starting to see in the early data, is that when these new lenders are repaid by their friends or family members (the borrowers that invited them to try out Kiva Zip), they will relend their repayments to support other entrepreneurs on the Kiva Zip platform. Kiva.org recruited about 70,000 new lenders in 2013. If Kiva Zip made 3,500 loans in 2015, and each invited 20 lenders, we could double that number. Where conventional underwriting stifles growth, on Kiva Zip social underwriting is fuelling it!
So what exactly is social underwriting again?
OK so that’s a lot of words, so how about this for an emerging definition:
To us on the Kiva Zip team, social underwriting means two things.
Firstly, social underwriting is carried out by a decentralized community of people (socially) rather than by a centralized financial institution. Mohammed Yunus, the grandfather of Microfinance 1.0, developed a model that relied on groups of women in rural Bangladesh to socially underwrite loans in a community-based way. With Kiva Zip, we’re exploring new digital instantiations of that concept. In this way, just as AirBnB is democratizing access to hotels, and Wikipedia is democratizing access to encyclopedias, so we see Kiva Zip (and crowdfunding more broadly) as democratizing access to capital.
And secondly, social underwriting employs social data (e.g. on a borrower’s character and standing in their community), as well as purely financial data, to assess borrowers’ creditworthiness and make lending decisions.
Apologies for the epic length of this blog post, but as you can tell, we’re pretty excited about this concept! Thanks for helping us explore it, by your participation in this Kiva Zip community.
Oakland has always fostered great businesses and innovative entrepreneurs. Growing up, and now raising a family in the city, I have witnessed first-hand the economic vitality and cultural vibrancy that independent small businesses can bring to the neighborhoods and commercial corridors that we call home. And throughout my political career, I have strived to make our city a place where small businesses are encouraged to establish themselves, grow and thrive.
Kiva Zip has now supported over 60 small businesses in and around Oakland.
But while small businesses bring color and character to our communities, and (as Nancy Pelosi put it) they represent “the engine of job creation and capital creation in our economy and in our country”, in recent years small business owners have struggled to access the opportunities that their grit and determination deserve. According to an Institute for Local Self-Reliance study released earlier this year, “42 percent of local businesses that needed a loan in the previous two years had been unable to obtain one”. Very small businesses (under 20 employees), startups, and enterprises owned by minorities and women are having a particularly difficult time accessing small business loans, and so small businesses are increasingly being forced to rely on high-cost alternatives to finance their operations and expansion. The same study cites that “in 1993, only 16 percent of business owners reported relying on credit cards for financing in a federal survey. By 2008, that figure had jumped to 44 percent”. As a result, the number of new start-up businesses in America has fallen by one-fifth over the last 30 years (adjusted for population change), as has the overall number and market share of small local firms.
This is where I believe Kiva Zip can play a valuable role. By empowering individual citizens to make loans as small as $5 to local small business owners, where banks are saying no to small business loan applications, we, the people of Oakland, can say yes – because we are more motivated by the economic independence and wellbeing of our city, than minimizing risk, and maximizing financial returns. And not only are Kiva Zip loans more accessible to our city’s entrepreneurs than small business bank loans (which typically require flawless credit scores, significant collateral, and several years of documented cashflows), but they are also interest-free – giving borrowers a valuable financial boost.
In my role as a member of Oakland’s City Council, last year I was proud to work with City Attorney Barbara Parker to co-author legislation making Oakland the first city in the country to become a Kiva Zip trustee. Over the last few months, the City has now vouched for 10 small business owners to access $55,000 of interest-free microloans on Kiva Zip.
My dream is that Oakland’s city government continues to become more transparent, innovative and efficient – all of which are principles embodied in our partnership with Kiva Zip. Where the reasons for conventional small business loan application rejections are often opaque, Kiva Zip lenders and borrowers communicate openly and transparently on the Kiva Zip website. Where conventional underwriting focuses solely on financial data, Kiva Zip’s innovative social underwriting approach aims to fill information gaps in the small business lending market, by assessing a borrower’s character and trust network. And where other sources of capital can be expensive, Kiva Zip’s technology-based approach aims to pass on cost savings and efficiencies to the small business owners they serve in the form of zero interest rates and no fees. The growing collaboration between the City of Oakland and Kiva Zip is one public-private partnership of which I am truly proud.
Along with the City, committed trustees in Oakland like Centro Community Partners, Mandela Marketplace, the Unity Council and Greenside Development Foundation have now endorsed over 50 small business owners for Kiva Zip microloans…and that number is set to expand significantly over the coming years. But the number of small businesses supported by the Kiva Zip program in Oakland is only part of the story we are writing here. As well as disbursing dollars, by connecting borrowers with thousands of lenders that can become their customers, business advisers and brand ambassadors, we also aim to develop a network of support for our city’s small business owners that provides them with social, as well as financial capital. As well as creating economic opportunities for entrepreneurs, with Kiva Zip we are cultivating community.
To make a loan to a small business owner in Oakland, please visit this link.
As of November 1, 2014, Kiva Zip will implement changes to our default policy that will align more consistently with that of Kiva.org.
We will now mark as defaulted any loan where the total amount repaid is less than the total amount expected as of six months prior.
For example: If a loan of $2,400 has monthly payments of $200 over 1 year, the earliest this loan could be defaulted would be the 7th month of its repayment term. The earliest any loan can be in default is 6 months into the repayment term. The latest a loan could be in default is 6 months after the final repayment is due.
Previously, our policy was that any loan with a repayment made for 180 consecutive days would be defaulted.
This change in our default policy will only affects loans that are currently in arrears. In other words, if a loan at one time had cumulative repayments less than the amount expected as of six months prior but is now current, then it will not be defaulted.
Much like Kiva.org, a Kiva Zip manager will review all cases with a pending default and reserve the right to exempt loans if extenuating circumstances are found. We will initiate this review process on a monthly basis.
Every lender’s Kiva Zip portfolio will be updated to reflect outstanding balances as well as any amount lent that has been placed in default.
If you have any questions, feedback or ideas about the changes to our default policy, we would love to hear them. Please send them to contactZip@kiva.org, or write them in the comments section below.
Empowering local Oakland entrepreneurs will be the purpose of the "Oakland Grown" event planned to take place on Wednesday, Oct. 8 at the Oakland City Hall.
Kiva is excited to announce we will be co-hosting the free affair with the city of Oakland which and will run from 4:30 to 6:30 PM. In addition to featuring information tables, marketplace treats and the opportunity for people to showcase their new businesses, visitors will get to meet and engage with local business owners and community members.
Bonus Swag: A $5 loan gets you a free Oakland Grown bag and there will be opportunities to win fabulous prizes, like Oakland A's tickets!
We want to get Oaklanders enthused about Kiva and about becoming lenders. If you love Kiva and care about the amazing community that is Oakland, we'd love to have you!
Can't make the event but would love to lend? Check out the event page below to support a business.
Learn more about the Oct. 8 event and RSVP here:
Facebook event page:
Leeretta Payne is the owner of Legacy Café, leading entrepreneurship in the community she grew up in, the Hill District. The Hill District is a historic community in Pittsburgh, PA which was once known nationally for its vibrant culture, literary scene, jazz, and successful businesses. Growing up, Leeretta worked in Eddie’s Restaurant and experienced the food industry while engaging with the community. Unfortunately, since then, Eddie’s restaurant and many other Hill District businesses have closed, decreasing the number of jobs in the community, but a few new businesses have opened.
The Legacy Café is a mobile café catering company. It was the first business endorsed by Urban Innovation21 and had a story so compelling that it was fully funded within 24 hours. Leeretta was able to purchase cooking materials and equipment upon receiving the loan. Most recently, she has catered City of Pittsburgh-Allegheny County events and continues to gain additional business based on referrals.
Scott Thomas-Tunstalle of Power 59 Construction is the tenth entrepreneur to be endorsed by Urban Innovation21 for a Kiva Zip loan and is currently fundraising a $5,000 loan. Power 59 Construction offers renovation and repair services for residential and commercial properties in the Pittsburgh region. Scott is a Hill District business owner looking to employ residents from the community while providing quality and reliable work to all clients.
These are just two of the ten business owners that Urban Innovaton21 has endorsed for a Kiva Zip loan since March 2013. Nine of the loans have been fully funded for a collective total of $35,500, and one is fundraising currently. Urban Innovation21 is proud to have reached the status of Tier Three Trustee - the first in Pennsylvania and the eighth in the United States. In addition to endorsing businesses for Kiva Zip loans, Urban Innovation21 provides clients with a range of other services, including pro bono legal services from Reed Smith. One of our flagship programs is a community-based grant competition that includes business workshops as well as the potential to win a grant.
Urban Innovation21 greatly appreciates the ongoing support of Kiva Zip and its international community of lenders for the business owners we serve, and we hope you will consider lending to Scott today. ...(continued)
After hearing horror stories about sex trafficking, Dawn, like many others, wanted to help end human trafficking but the scope of the problem and the complexities of the solutions dissuaded her from getting involved. An eye-opening research trip to India, sandals made by Ugandan women with the help of a social enterprise, and Thai fisherman pants were the three disparate elements united by Dawn Manske’s passion to bring hope to dark places that resulted in Made for Freedom in late 2011.
With the help of her first Kiva loan, she was able to bring on a summer intern, launch an e-commerce site, obtain the registered trademark for the business name, change the pattern of fisherman pants to western appeal, change the name to Creabeli (Creating a Beautiful Life) pants and place the first order of 250 pairs of Creabelis!
It is possible to make an impact in the lives of women by giving a portion of the profits to fund life skills and job training. Made for Freedom is doing that and more! Rather than sourcing their products from the cheapest vendors, which are likely paying poverty wages, Made for Freedom is partnering with centers around the world that are training women and providing manufacturing employment. Their tee shirts and Creabelis are made by survivors of sex trafficking, thus providing dignified employment and a fair wage for women so they can lift themselves out of poverty. Before Made for Freedom ever sold one item, they had provided 700 hours of dignified employment for sex trafficking survivors!
They have product and more on the way. Dawn is ready to take Creabelis on the road and introduce them to boutique owners across the country and broaden the product line to include purses and other accessories to provide employment for more women.
Coming soon, Made for Freedom will have technical devices incorporated into their bags.
The more Dawn is out talking to people about sexual exploitation, the more girls and women confide in her their stories of being raped. Made for Freedom will soon incorporate technology into their bags that can provide a device that will activate a text message, call or alert sound.
Made for Freedom bags already benefit victims of sexual exploitation, but with this technology, the bags will provide an additional layer of protection for girls and comfort for parents. Made for Freedom bags will help with prevention and provide restoration via production, use and profit. This device will set their products apart from others.
Help provide dignity for women by purchasing! Join the fight against sex trafficking!
Dora Walmsley, a Kiva Zip borrower in Pittsburgh, never anticipated becoming an entrepreneur. In 2013 she, and her business partner Deirdre Kane, became just that when they opened the 52nd Street Market in response to the demand of their neighbors in Lawrenceville. During her search for start-up capital, Dora checked out numerous online crowdfunding platforms, but it was through her connection with Lawrenceville Corporation, a Kiva City Pittsburgh trustee, that she found Kiva Zip. In September 2013, the 52nd Street Market crowdfunded $2,525 in startup capital at 0% interest.
The market, which opened its doors in early 2014, is taking its cue from shoppers, offering the variety of products the neighborhood wants to see--organic, affordable and locally sourced. Fortunately, bringing in local goods was no challenge for Dora and Deirdre. In addition to connections they had developed through their primary employment, as a member of the Kiva City Pittsburgh community they were now part of a great network of local businesses! Local Kiva Zip borrowers looking to house, expand and market their products turned out to be the perfect candidates to be featured in the store.
Dora stated that having Kiva Zip borrowers in the store “was a no brainer,” going on to say that “Kiva Zip borrowers reached out to us, we reached out to them. Working and communicating with other borrowers allows us to grow the Pittsburgh network with the added bonus of having the opportunity to commiserate with people who understand some of the problems we face”.
Almost every aisle offers a Kiva Zip borrower product. Currently you can find coffee and pastries from Zeke’s Coffee, ice cream sandwiches from Leona’s LLC, mini pies from The Pie Guy and TeaPop’s from Healcrest Urban Farms under their roof.
To learn more about the Kiva City Pittsburgh initiative and our local supporters, visit our landing page on the Kiva website. From there, you can link to our list of borrowers, which currently includes three local entrepreneurs: Leslie of The Ultimate Beauty Spa, Mechele of Me’chele’s Wellness Spa LLC, and Lia of MIX Salad Concept, Inc. ...(continued)
Over the last five years, my answer to this question has evolved. When I first came to Kiva as a volunteer in 2009, the objectives were clear - firstly, spend as much time as I could on the golf courses of San Francisco, without getting fired from my unpaid internship. And secondly, help poor women in Africa to access microloans.
I had spent eight months of my "gap year" teaching at a school in Zambia, and had determined that I wanted to do what I could to alleviate the dire poverty that I witnessed there first-hand. These people were why I loaned on Kiva. While I was peppering Bay Area bunkers, Kiva challenged this paradigm, by making its first loans to U.S. entrepreneurs.
As I saw it, Americans already had abundant access to resources. For every $25 that I loaned to a U.S. small business owner on Kiva, that was $25 fewer dollars going to a farmer in Uganda. I didn't mind if other lenders wanted to lend to U.S. borrowers on Kiva, but I certainly didn't. Over the last five years, my perspectives on this question of "Why I Zip" have changed.
I've personally witnessed the intense income inequality that exists in America, and realized the challenges that fledgling small businesses have in accessing the capital they need to grow. I've been shocked that the median wealth of White households is 20 times that of African American, and 18 times that of Hispanic households. I've walked past the bricked-up windows of once-thriving restaurants and shops in inner-city Detroit and the south side of Chicago.
I've learned that while small businesses account for the majority of net new jobs in the economy, in the face of 8,000 small business loan applications being rejected by banks every single day, only 25,000 U.S. microloans are made over the course of a typical year. I believe hard-working, talented, passionate, would-be entrepreneurs throughout the world are often prevented from chasing their dreams not by a lack of ability, but by a lack of opportunity. And I believe millions of them live in America.
I no longer believe it's a zero sum game. I used to worry that every loan that Kiva made in America would mean fewer loans made in Angola. I now think the opposite is true. Whenever the Richmond Times Dispatch or the New Jersey Star Ledger cover Kiva Zip, or President Bill Clinton or Senator Mark Warner promote our program, that's more people learning about Kiva.
Whenever funders like Capital One or the Knight Foundation financially support our U.S. microlending, that's more resources that we can use to build better platforms, which will help small business owners in every country in the world, as well as this one. For every U.S. entrepreneur that we make a loan to on Kiva Zip, 20 new lenders are signing up to make their first ever Kiva loan, because they want to publicly demonstrate their support for their friend, family member or neighbor. We hope that when these 20 lenders get repaid by the friend they loaned to, many will relend their repayments to other Kiva borrowers - whether they are on the other side of that lender's street, or on the other side of the world.
Most importantly, I've made friends. Over the last three years I've had the privilege of personally getting to know hundreds of Kiva Zip borrowers throughout the United States. I've been inspired by their passion, and humbled by their determination to succeed at what I consider to be the hardest job in the world - owning your own business. I've eaten their pupusas, purchased their flip flops, got a little merry on their potent beer, and had my hair cut in their barbershops.
This is the most important part of my own personal "Why I Zip" evolution: Sheer poverty alleviation is no longer the sole motivation. It has been joined by the desire for personal connection. I love being able to support Kiva Zip entrepreneurs, not just with 0% interest financial capital, but with my custom, my promotion of their businesses to my 12 Twitter followers, my words of affirmation and encouragement, and the occasional snippet of business advice (which they would in almost all cases no-doubt be better-advised to ignore). These personal connections are what I mean by social capital.
For me, the biggest possible vision for the Kiva Zip experiment is of a whole new model of "philanthropy" (whose etymology is from the Greek words for "loving mankind"), based upon closer connections, and greater empathy -- not between "donors" and "recipients", but between co-members of a supportive community.
I dream of a whole new financial system, based not upon profit, greed and numerical transactions, but upon people, generosity and human connections.
That naïve, moonshot vision is #WHYIZIP.
We're making history...our history that is! Today, for the first time ever we will be matching every single loan on our site. That means every single small business owner who is fundraising right now will reach his or her goal 2x faster!
To celebrate this momentous occasion, we are also launching a social media campaign today called #whyizip. Moments like this remind us of why we love being a part of the Kiva Zip community because we know how much this capital will transform the lives, businesses and communities of our entrepreneurs.
Join us in the celebration! Cobble together a dollar from each of your friends or family members. Forego a pastry, coffee, or adult beverage today; instead, make a $5 loan to a small organic market in the midst of a food desert, a first-generation organic farmer from your state, or an artisan on another continent in Kenya.
We hope that you feel that same tingling sensation when you read the story of a borrower, when you take a moment to reflect on the life of the person you're reading about, and you decide to invest in their vision.
Regardless of whether you make a loan today or whether you've made one in the past, we hope that you'll take a moment to celebrate with us. Head on over to twitter and let us know why you are proud to be a part of the Kiva Zip community. Don't forget to include the hashtag #whyizip!
It is our hope that with your help and a dash of luck, we will reach new friends and reengage existing ones who will help us continue providing access to capital to the underserved small business owners who need it most.
We can't wait to hear from you!
On the Kiva Zip team, we are continuously striving to innovate, iterate and improve on our model. In this spirit, we have decided to pilot a new Kiva Zip loan model without a trustee. For those of you unfamiliar with our existing model, a trustee is an individual or organization that publicly vouches for the character of each borrower. Since we launched Kiva Zip in 2011, we have partnered with 400 U.S. trustees who have endorsed over 700 loans, which have maintained an average repayment rate over 88%. We’re proud of how many trustees have stepped up to partner with us, and thankful for all of the time and energy they have dedicated to empowering entrepreneurs in their communities.
Despite the success of our trustee-based model, we have found that some borrowers struggle to quickly find a trustee. In some cases, the trustee requirement is discouraging potential borrowers from pursuing Kiva Zip loans. The speed at which entrepreneurs are able to access capital is often fundamentally important to them, so we are testing an effort to streamline the process in order to avoid forcing entrepreneurs to waste precious time trying (sometimes in vain) to find a trustee.
One question we have is whether the absence of a trustee will lead to a decline in Kiva Zip’s repayment rate. We are cautiously optimistic about the answer to this question, based on our innovative approach to social underwriting, which underwent a major breakthrough at the beginning of the year. In January, we rolled out the Private Fundraising Period, which requires U.S. borrowers to recruit 15 lenders from within their network of friends and family in order to have their loan posted on the public Kiva Zip website. This innovation makes borrowers accountable to their personal social networks, which has markedly improved our repayment rate. We feel that the Private Fundraising Period has laid the foundation for us to run this “no trustee” pilot program. That said, we still expect bumps along the repayment rate road, and we will be carefully analyzing the impact of this pilot on the risk profile of these loans as it progresses.
Over the next few weeks, we will be posting 30 loans to the website without a trustee. We will clearly flag these loans as being a part of the No Trustee pilot with the image below:
If you have any questions, feedback or ideas about this no-trustee pilot, we would love to hear them. Please send them to contactZip@kiva.org, or write them in the comments section below. ...(continued)
In late May, Kiva City Pittsburgh kicked off a partnership with Pittsburgh Mayor Bill Peduto’s office with the first of a series of six information sessions. Kiva City Pittsburgh is a local initiative created by Kiva.org --a San Francisco based nonprofit that helps facilitate crowd funded micro-loans at 0% interest through its online Kiva Zip program. Each session will explain how individuals and organizations can identify and endorse entrepreneurs for Kiva Zip micro-loans by serving as Trustees. Together, Kiva City Pittsburgh, Mayor Peduto and local Trustees will help to foster businesses and reinvigorate Pittsburgh’s underserved communities.
Emily Keebler, Kiva City Pittsburgh Lead, and Henry Pyatt, the Small Business and Redevelopment Manager in the Bureau of Neighborhood Empowerment at the City of Pittsburgh headed the first session which was hosted by Tech Shop Pittsburgh in Bakery Square. In attendance were past borrowers and both current and prospective trustees-- including representatives from social service agencies, Rotary Clubs and the local chapter of SCORE.
Henry Pyatt, who has been charged with neighborhood revitalization, began the information session for potential Kiva Zip trustees with an emphatic statement, “Kiva gives neighborhoods the resources to realize their dreams.”
Representatives from two Kiva Zip trustees, Christian Evangelistic Economic Development (CEED) and Operation Better Block (OBB), reinforced Mr. Pyatt’s belief by sharing how they utilized Kiva Zip to help catalyze change in underserved communities.
Emmanual Afrifa, Microloan Officer at CEED, said that “[CEED and Kiva Zip] are able to encourage borrowers, as well as give them the opportunity to support their growing business while strengthening their ties to the communities.” Adding that it is when organizations and individuals who are “entirely dedicated to helping people succeed that neighborhoods can flourish.”
Mr. Afrifa introduced Leslie Parr, owner of Shining Stars Creative Childcare and Learning Service in Wilkinsburg, who CEED endorsed for a $5,000 loan which was disbursed in November 2013. Parr felt that CEED’s support, including the endorsement for a Kiva Zip loan, “was a God send” for her small business.
Jerome M. Jackson, Executive Director of Operation Better Block in Homewood, pointed out an additional benefit that Kiva Zip offered to their neighborhood, and may apply in other cases. The business that OBB endorsed, The Wheel Mill, provides a safe, indoor place for kids and adults to ride BMX bikes. Many other businesses provide recreation or “third spaces” where community members can come together. According to Jackson, the investment of as little as $5 by both Pittsburgh and non-Pittsburgh lenders towards this community-centric business created a space where “kids and young people have a chance to become involved in their community.”
Kiva City Pittsburgh includes 20 trustees in the Pittsburgh area which have endorsed new and existing entrepreneurs. The twenty trustees include business development non-profits, community development corporations, co-working spaces, and individuals with a strong business background. They play a vital role in Kiva Zip’s unique lending model, which determines prospective borrowers based on their character rather than on their credit score. Trustees, who bear no financial or legal responsibility for the loan, publicly stake their reputation on behalf of the borrower on the website.
Help small businesses in your community by becoming a trustee. Contact Emily Keebler, Kiva City Pittsburgh Lead, at firstname.lastname@example.org, for details on next month’s trustee information session and follow this link for more info on becoming a trustee with Kiva Zip. ...(continued)
The Kiva Zip team has some very exciting news to share! We are now accepting donations through our basket page!
Why is this exciting? While donations are completely optional, their significance is immeasurable. Much like Kiva.org, these funds help pay for the (rather wonderful) Kiva Zip staff, maintain our website, and ultimately enable us to increase our impact across Kenya and the US. The Kiva Zip team works hard to innovate and improve the world of microfinance, and any small contribution goes a long way!
Thank you all, for your ongoing support of our mission and any help in providing entrepreneurs with the little opportunities that will mean a lifetime of difference.
The Kiva Zip Team ...(continued)
On the Kiva Zip team we are dedicated and focused on growing our impact among small farmers. We believe they are leading an important movement towards healthy and sustainable communities.
There are two key quality indicators that we look at when evaluating our borrowers: (1) the fundraising speed and (2) the repayment rate.
(1) Funding Rate
Every farmer has successfully funded on Kiva Zip. The average funding rate for farmers is around 15 days, whereas the average for all industries is 35 days. We attribute this to the explicit social impact that our lenders believe farmers deliver to their communities.
(2) Repayment Rate
Across the 77 farmers we have supported since the launch of Kiva Zip, we have maintained a 100% repayment rate.
As a result of these very encouraging data points, we have increased the loan amount that farmers can apply for -- up to $10,000.
Our Network of Trustees
I’m particularly encouraged by the partnerships that we are fostering around the country. We have national farmer networks, grocery stores, farmers' markets, food associations, farming coalitions, farm lenders, plant nurseries, tech companies….the diversity of these trustees is extremely exciting.
Some of our best trustees are exclusively focused on growing and investing in the local food movement in their communities. While they manifest that vision in different ways, they are all aligned with Kiva Zip’s mission to empower and support financially excluded and socially impactful entrepreneurs.
Some trustee partnerships I am particularly excited about include:
Greenhorns – a network of farmers whose mission is to recruit, support, and promote the new generation of farmers in America. As one of our first trustees, they have supported 7 entrepreneurs, raised $40,000, and maintained a 100% repayment rate.
Good Eggs – a technology platform whose mission is to grow and sustain local food systems. Their offices in Brooklyn, New Orleans, Los Angeles and San Francisco have all signed up as trustees on Kiva Zip and endorsed entrepreneurs in their communities.
Central Arkansas New Agrarian Society (CANAS) – a coalition of “do-gooders”, farmers, and gardeners that aims to cultivate urban agriculture in Central Arkansas. With the help of CANAS we have supported nine farmers in Arkansas funneling over $75,000 of capital into their local food economy.
I leave you with a farmer that is currently fundraising right now, Brad, with Goosefoot Farm in Fairbanks Alaska. A Kiva Zip loan will allow him to improve the infrastructure at his farm. Even in the most remote areas of the country, we are supporting farmers growing their local food economies, and we're excited to continue to increase our impact in this area. ...(continued)
Nowhere is the spirit of Entrepreneurship more rampant than in Gikomba market. Gikomba is the largest second-hand clothes market in East Africa. This open-air market located near the Eastleigh neighborhood of Nairobi is home to hundreds of traders. The traders are small retailers that sell second-hand clothing they purchase from larger distributers for a small profit. This is a bustling market and on any day, you can hear retailers shouting over each other trying to attract customers to their stall.
Recently the market has been plagued with multiple disasters. In mid-March an electrical fire raged through the market, destroying 1/3 of the stalls. Many small retailers lost most of their merchandise in the fire. Shortly thereafter, the Kiva Zip team was approached by Frank Buchanan, who runs a social venture called Inukabuy, that aims to increase income for these small retailers. He was looking for ways to help these retailers get their businesses and lives back on track as quickly as possible. Gaining access to low cost capital seemed like the way to go. Knowing that time was of the essence, we added Frank as a Kiva Zip Trustee in less than 5 days! This meant he could start selecting and endorsing borrowers to get a 0% interest Kiva Zip loan.
I had the opportunity to spend a day in the market with Frank, and we met the retailers who had lost their merchandise in the fire. Hearing their personal stories and how the fire had already impacted their lives, struck a cord with me. There was a real sense of community here. They competed with each other for sales, but were there for each other in time of need – whether it was lending money to one another, selling merchandise for someone that was sick or protecting each other from theft.
As a community, they had already gone through so much, but rather than dwelling on that, they were hopeful and eager to get back to their businesses. In the middle of talking to us about the loan process, they were still trying to attract customers to their stalls and were busy selling whatever they had left.
One of the potential borrowers asked, “Why do these people who don’t know me want to support me?”
Trying to explain crowd funding and the generosity of complete strangers seemed a strange ac oncept to explain, as I’m sure it was to comprehend! The good news is that all the borrowers that were selected for loans that afternoon had their loans funded on the Zip website in less than an hour!
Just when it seemed that these retailers were getting back on their feet, they were victims of another tragedy. Two weeks ago, Gikomba was hit by twin terrorist attacks. In the first incident, an improvised explosive device exploded inside a matatu (public transport van) loaded with people and in the second, a grenade was hurled inside the crowded market. Ten people died, and 76 people were injured in the attack. Hearing about the blasts, my immediate reaction was to ensure that neither Frank nor the borrowers we support were involved. Luckily Frank was out of town and none of our borrowers were affected, though I’m sure their businesses were impacted as the market tried to recover from the blasts. I hope in the near future, we can support more of these retailers through a Kiva Zip loan.
As they say, time and hope are the best healers. It’s now been over two weeks since the terrorist attacks, and the retailers are back at the market, trying to earn a livelihood and return to a sense of normalcy. I’m so inspired by the spirit and resiliency of the people in the market and like the Phoenix they are truly rising from the ashes.
In communities throughout Kenya countless individuals are doing tremendous deeds to serve the people they know and trust.
According to UN Habitat, of the four million people who live in Nairobi, over 60% live in slums, 78% of which do not have running water in their homes. Many struggle to pay their rent of $10-35 per month and rarely have enough food to eat. Their children are very lucky if they are consistently able to attend school. For those in better conditions, this reality becomes all the more confronting when these people are your friends and relatives.
When Davis Mkoji got a call in early 2012 inviting him to test out the newly-created Kiva Zip program, he jumped at the opportunity. He was already supporting young men who struggled to earn a living and knew he would not be able to sustainably meet their needs. Microfinance institutions could not serve these individuals and Davis could not afford to supply the capital himself.
A full-time employee of Kenya Medical Research Institute and part-time lecturer for a private university in communications and leadership, Davis is well-connected and respected in the community, and thus, an ideal individual trustee for Kiva Zip. In the last 24 months he has endorsed 43 borrowers, four of whom became trustees themselves as part of a “borrower-trustee” experiment launched in 2013. Now, each of those four borrowers has endorsed one to six others, illustrating the ripple effect that even just one individual trustee can have. Without opening his wallet, Mkoji has granted over 40 people access to a combined total of $12,000 in loans with a 99.3% repayment rate.
Davis is currently a member of the Kiva Zip Advisory Board - a group of trustees who were selected based on their high repayment rate and large number of borrowers they’ve brought onto the Kiva Zip platform.
“My motivation to reach the needy and helping them out is out of the fact that I am always fascinated to see people meet their needs despite the challenges they face at hand,” says Davis.
When selecting borrowers Davis evaluates several metrics.
“I look at friendship, acquaintances and their character in general,” he says. "I interact with such friends, some of which I mentor in my church, workplace and within my social life. The criteria is based on how long I have known them, our level of trust, their values and other necessary qualities.”
He understands the care it takes to support borrowers throughout the loan process, especially for those borrowers who are on their 2nd, 3rd and 4th Kiva Zip loans.
“I know it’s difficult for the borrowers to remain successful as the loan increment increases. This is where I apply my own instincts, especially by looking at the challenges they face in the business and being able to advise, mentor them and really make it happen,” says Davis.
He notes the community Kiva Zip fosters. And emphasizes the need for ongoing support for individual trustees who are often times the main link between Kiva Zip and borrowers.
“I want to thank Kiva Zip for giving us an opportunity as trustees to serve the people of Kenya and our communities to achieve their dreams. I think for me that is the biggest achievement I’ve had in a very long time ,” says Davis.
You can view our interview with Davis here:
Davis Mkoji Video Interview
Special thanks to Taylor Whitfield, a former Kiva Zip fellow, for providing some of the information above.
To learn more about Kiva Zip and the role of a trustee please visit: http://www.kenyatrustees.kivazip.org/
Kiva Zip Kenya Fellows are based in Nairobi and spend four months working on scaling operations in Kenya and navigating their new backyard.
1. Shikha Dubey is our resident Roger Rabbit dancer and food enthusiast. She works on on-boarding trustees, specifically those that work with youth in Kenya to leverage this population that is often excluded from formal financing.
Background before Kiva Zip?
I was a Global Education Development Manager for Cisco systems.
What were you hoping to achieve at Zip as a fellow?
To learn first hand about the impact Kiva Zip is making in Kenya, especially how it's impacting the lives of borrowers and the communities they live in.
What are you passionate about?
Empowering women, education and contributing to sustainable solutions that impact not only individuals but also their families and communities.
2. Tiffany Vlaanderen enjoys the team's nightly Beyonce music video marathons and developing Zip's digital strategy to reach more organizations and entrepreneurs in Kenya.
Background Before Kiva Zip?
I worked at Kiva headquarters on the Marketing & Communications team and ate my way through countless Nopalito excursions in San Francisco. Before joining Kiva, I played tag with hundreds of Japanese elementary and junior high students daily and more formally served as their foreign English teacher in a small seaside, agricultural town in Kumamoto prefecture. I also wrote for Forbes Indonesia which truly taught me that you could love what you do on a daily basis -- it’s a feeling I’m continually fighting for.
What were you hoping to achieve at Zip as a fellow?
I wanted to gain experience working with our clients directly, gain a better understanding of what it takes to run our program on the ground and especially get my feet wet on a new continent. And of course, I wanted to see what microfinance could enable our clients to do with their livelihoods, if anything at all.
What are you passionate about?
After working with Kiva Zip, I’ve witnessed the gap between locally made products and their scale on the continent and beyond. I’m very interested in the workmanship of artisans and how we can work to bridge their access to market for their products. I’ve always had a penchant for all things well crafted -- whether it’s prose, a beautiful brass cuff or even a loan product. How do we work to create a marketplace where these skill sets can be best used: be profitable and create beautiful designs?
Favorite part of living in Nairobi?
Nothing makes me happier every day than taking in Nairobi while on the back of my driver’s boda, a term for motorcycle taxi with origins in the need to transport people across the "no-mans-land" between the border posts of Uganda and Kenya. Something about the experience allows me to pay attention to the sights around me and feel the day’s weight - debris, heat and all, on my skin. Though I will note no one in Nairobi will advise you to ever use this mode of transport.
3. Shinez Chalabi hails from Ottawa via Algiers. She enjoys the latest African beats and prawn curry any day of the week.
Background before Kiva Zip?
Before joining Kiva, I worked as a consultant in technology, mainly in the telecoms and IT sectors.
What were you hoping to achieve at Zip as a fellow?
I was looking forward to meeting our trustees and borrowers and observe first hand the impact Kiva has in the field, especially in the solar industry.
What are you passionate about?
I am passionate about clean energy and leveraging technology for social impact. I am also an active advocate on engaging women in engineering and technology.
Favorite part of living in Nairobi?
The kindness of the Kenyan people, roaming the city on a boda and thai food at 1001 nights!
At an age when most kids are focused on playing video games, 13-year old Thomas Woodside is more interested in helping empower entrepreneurs on Kiva and Kiva Zip. Thomas is not only a Kiva power-user who has made over 160 loans on Kiva and Kiva Zip, but he is also an active blogger. On his blog www.kivaproducts.org , Thomas has built an online portal that directs people to the websites of many Kiva Zip borrowers so that they can purchase their different products!
Thomas first heard about Kiva while reading The International Bank of Bob , Bob Harris’ 2014 book about Kiva. The book inspired Thomas to start making loans on Kiva.org, which only increased his interest in microfinance. Thomas then started a school project about microfinance, which led him to explore how it might be possible to lower microfinance interest rates through the use of technology and social underwriting. When he finally came across Kiva Zip a short while later, it was almost exactly what he was thinking up!
I sat down with Thomas last week to talk about his experiences with Kiva and Kiva Zip.
KZ: Thanks for taking the time to talk with me today Thomas. So can you tell me about some of your favorite aspects of Kiva Zip?
TW: I’d say my favorite part of Kiva Zip is the Conversations feature, which lets you actually speak to borrowers. With Kiva.org it’s harder to follow up and know how the entrepreneurs you lent to are doing. With Kiva Zip, borrowers can give you updates, which is a great way of seeing how the loan helped them and staying in touch.
KZ: That’s definitely true, I love having the ability to directly communicate with borrowers. So you said you’ve made 18 loans on Kiva Zip. Do you prefer lending to entrepreneurs in Kenya or the US?
TW: Usually I’ll look for loans that are local, like Julianne, who runs Faerie Goatmother soaps in East Palo Alto [https://zip.kiva.org/loans/3019]. If there aren’t any loans in my area, then I’ll check for loans in Kenya. The loans in Kenya fund really quickly though, so if I can’t find any in Kenya I’ll lend to someone else in the US.
KZ: So I have to tell you Thomas, we were all really impressed with your blog linking to all the Kiva Zip borrower products. What inspired you to build a store for Kiva Zip borrowers?
TW: So I was actually inspired to start this store after lending to one of my favorite Kiva Zip borrowers, Winter, who makes this amazing maple syrup under the business name Mead and Mead [https://zip.kiva.org/loans/2671]. I really wanted to buy some of his maple syrup, so I looked up his store and made an order. I thought it was a little too hard to find the syrup online, and that there must be an easier way to help people find it. Once I started looking at past loans I had made, I noticed a lot of the entrepreneurs I had supported also had products for sale online. I decided that I could help make it easier for them to sell their products by putting the links to their stores in one place. I definitely recommend that all borrowers put their website in their loan profiles – it’s a really powerful tool!
KZ: That’s an amazing idea, and its awesome that you were able to put it together yourself so quickly! You’re in middle school now, and heading into high school next year – is Kiva popular with kids in your age group?
TW: Within my friend group, I’m definitely the one that is most into Kiva. One great thing about Kiva Zip, though, is that it has $5 loans, which makes it more affordable to kids my age. I always try to get my friends to try lending on Kiva, so usually instead of getting birthday presents I’ll just have everyone make a loan on Kiva. I think its a good way to help people, and that my friends really like it too.
KZ: Wow, that’s really inspiring. So when you’re not building awesome websites and lending on Kiva, what are some of your other interests and hobbies?
TW: In general, I’m really interested in science and community service. In my free time I participate in a program tutoring kids in disadvantaged neighborhoods, and my family and I often volunteers in SF Marin Foodbank.
KZ: Sounds like you stay pretty busy – keep up the good work! Thanks for taking the time to talk with me today!
Borrower turned trustee: Tara Rockacy (left), First Endorsed borrower: Lyla Nelson (right)
Local farmer Tara Rockacy of Churchview Farm is passing the buck on to other small businesses, in the best way possible.
Last week, Rockacy endorsed Lyla Nelson, a local glass-blowing artist , for a $5,000 interest-free loan to purchase equipment necessary to running her studio in Pittsburgh's West End.
Both Rockacy and Nelson had been turned down for a conventional bank loan in the past, and knew the difficulties of finding the funding to expand their businesses.
“I have a lot of friends who are starting their own businesses and projects, and what we all needed was a burst of funding for a specific project,” Rockacy said.
Rockacy is using Kiva Zip, a non-profit that facilitates crowd funded microloans at 0% interest, to help funnel much-needed capital to small businesses. There are 35 entrepreneurs in the Pittsburgh area who have already received a Kiva Zip loan, and one currently fundraising, using the help of 18 ‘trustees’ like Rockacy to access these loans.
Pittsburgh borrower currently fundraising: Micah from Shoutside Media
A trustee is an organization or an individual that acts as a character reference for a loan-seeking entrepreneur. On Kiva Zip’s unique lending platform, borrowers are deemed credit-worthy by their good character rather than their credit score. While trustees bear no financial or legal responsibility for the loan, they play a key role in ensuring that the business owner succeeds and pays back their loan by staking their reputation on the borrower’s behalf on the public website.
“It seems like it should be a paperwork heavy, intensive process, and once we started it was so easy,” said Rockacy. “Basically, it only took a few hours. The site is very user-friendly.”
In a perfect example of how Kiva Zip accesses and expands on existing community networks, Rockacy became a trustee after going through the process as a borrower herself. She is the first individual to do this in Pittsburgh. Rockacy received a Kiva Zip loan for Churchview Farms, which sits on the border of the City of Pittsburgh and the borough of Baldwin.
“I was turned down for a bank loan, since my business was only about four years old and just starting to show a profit,” Rockacy said. “I used the [Kiva Zip] loan to partially fund the barn we were building, which we use to host our farm to table dinner series, featuring different chefs and using products from the farm. It has gone a long way in making the business sustainable.”
Rockacy recently assisted Nelson in receiving her loan, but Rockacy was originally endorsed by her own trustee, Catapult PGH, who has helped 7 local businesses receive $40,000 in interest-free capital since June 2012. Catapult PGH, a coworking space in Pittsburgh’s Lawrenceville neighborhood, is one of the top 20 Kiva Zip trustees in the United States.
“I think it’s awesome that I can help out in some way,” said Elliott Williams, Founder of Catapult PGH. “These businesses need a boost to get an idea off the ground. It feels great to be a part of that.”
Once Rockacy had established a solid track record of on-time payments, she was able to help other entrepreneurs by becoming a trustee herself. Rockacy endorsed Nelson, her former co-worker and friend, who was having a hard time taking the next step in launching her glass-blowing studio.
Nelson said that saving and purchasing her glass-blowing equipment piece by piece had made her feel burned out and frustrated. After being denied a bank loan to purchase a vital piece of equipment, she was feeling discouraged, until Rockacy told her about Kiva Zip and endorsed her for a loan. Nelson’s loan funded in less than a week.
“Six days and Kiva made this all possible, after thinking that it would take another year,” Nelson said. “I’m feeling very supported by people I know, and I was so moved by the support of people who don’t even know me.”
Rockacy felt the same way about her own borrower experience: “Not only do the funds give my business a shot in the arm, it’s so encouraging to know that people are reading your profile, have never met you, but are willing to lend.”
“I’m feeling inspired again,” Nelson said.
1. His Business: Re-Designing Store to Increase Access to Healthy Food
Nelson’s store is the snack mecca for his neighborhood including dozens of junior and senior high school students who swarm the store every afternoon. Previously, on any given afternoon, you would see kids line up out the door to purchase excessively sugary, salty and processed snacks that made up most of Nelson's store inventory. Nelson wanted to change that! He partnered with his trustee, Los Angeles Food Policy Council, to makeover his store and provide healthier food and snack options to his customers. Part of the funding for the Healthy Neighborhood Market Network Project came from over 200 lenders through Kiva Zip! Now, students looking for a grab-and-go bite can reach for tangerines, bananas, yogurts, trail mixes, baggies of apples or carrots, or protein bars.
Photo Credit: Rudy Espinoza
Photo Credit: Rudy Espinoza
Photo Credit: Rudy Espinoza
Photo Credit: Rudy Espinoza
2. His Community: Leading Neighborhood Health Changes
Nelson isn't just a health-conscious entrepreneur, he's also a community leader leading change in his neighborhood. For his “market makeover” project, Nelson has engaged and formed quite a team from his neighborhood and throughout LA: a principal, teachers and student leaders from nearby Hawkins High School, a brand strategist from a food retail consulting firm called Shook Kelley, an architect, a graphic designer, community development practitioners from LURN, food policy friends at the Los Angeles Food Policy Council and nearly 200 backers through a Kiva Zip loan.
More impressive is Nelson's commitment to making long-term changes in his neighborhood. Several neighborhood institutions have committed to regularly buy healthy food from Nelson's store and send students, patients and constituents to Nelson's store to purchase healthy foods. These institions include nearby Hawkins High School, St. John’s Well Child and Family Center, Southern California Library, Voice Neighborhood Council and John Muir Middle School.
Photo Credit: Rudy Espinoza
3. His City: Expanding Health Initiative Throughout Los Angeles
Nelson’s store conversion project is a part of a larger effort to expand access to healthy food in parts of Los Angeles with diminished healthy food options by encouraging existing convenience stores and neighborhood markets to offer healthier products. The link between the kind of food available in one’s neighborhood and one’s health is well-documented. If you grow up in a neighborhood environment overrun with fast food options and liquor stores, it is easy to see that your limited options will impact your ability to get your “five a day” of fruits and veggies. With diminished food options near you, your chances of struggling with diet-related health problems such as diabetes, heart disease and obesity will increase. Where you live informs how you eat which impacts your health and quality of life in significant ways.
The key to revitalizing low-income communities and changing the way food systems work is by identifying leaders in our community that are already taking risks and invest in their visions. Nelson is a great example. His market makeover project highlights his inherent strengths as a socially conscious entrepreneur. He seeks to develop a sustainable business model that he hopes to replicate throughout South Los Angeles. While the project’s focus was on incorporating healthy food into his store, the project was largely driven by Nelson’s leadership and vision. No matter what happens at Alba Snacks & Services, South Los Angeles has in Nelson a freshly motivated small business leader who will fight for the health of his community.
Photo Credit: Rudy Espinoza
Special Thanks to Clare Fox (LA Food Policy Council) and Rudy Espinoza (LURN) for content and photos for this blog post! ...(continued)
Alex's business Lemon D-Lite is a naturally flavored lemon popcorn based on his grandfather's recipe.
Prior to the Kiva loan, Alex was selling his popcorn at a local farmer's market in Houston grossing about $100 per week.
What was the immediate impact of his Kiva Zip loan?
After the Kiva Zip loan of $5000 he was able to buy supplies in bulk reducing his costs by nearly 22%. He was also able to increase his marketing efforts through social media causing his sales to increase by 150% to $250 per week.
This was only the beginning of the impact Alex's $5000 Kiva Zip loan would have!
How will the Kiva Zip loan help secure the future of his business?
As news of Alex's Kiva Zip loan and the effect it was having on his business spread, his brother and friend decided to pitch in. This added help plus a near by popcorn shop that was closing due to a retiring owner, made for the perfect storm.
The three of them were able to negotiate and take over the old popcorn shop's lease plus purchase all of the equipment with the help of a very generous friend. Over the next weeks all three of them worked to completely gut and redo the interior and exterior of the store.
Before and After photos of the new store front
I have been keeping in touch with them on a weekly basis and at first I was alarmed at the speed they were moving. I knew they were on track
when on the 3rd day after opening , Alex greeted me with a beaming smile, hugged me and said "We made rent today!" They have already made a profit in the first month and with sales close to $5000 a month.
I can proudly say this would not have happened without the Kiva Zip loan through Bayou Microfund.
There is more good news. We encouraged them to provide shelf space to one other Kiva borrowers which Bayou Microfund sponsored, Heather's Sweet Luxuries Boutique Bakery.
Heather's sales have gone up as well!
All this happened because of lenders who made Alex's Kiva Zip loan happen ! ...(continued)
As the Relationship Manager and more appropriately the backbone of Zip's Kenya operations, Pascalia Sila has been with the Zip team since November 2011 when Zip first launched its operations here in Kenya. She manages trustee relationships and borrower matters and often times when borrowers or trustees think of the face of Kiva Zip, it's truly Pascalia they have in mind.
Background before Kiva Zip?
I have a bachelor of commerce in Banking and Finance, a post graduate certificate in Micro, Small, & Medium Enterprises Business Mentorship and a Diploma in Public Relations. I worked for K-Rep Bank for 5 years and for I & M Bank for 1 year.
What were you hoping to achieve at Zip?
I hope that Kiva Zip can be that community of choice where everyone wants to be included. Where lenders will find inspiring loans to lend to, be assured of getting their money back -- and not only their money -- but inspiring stories of what their money did. Where Borrowers not only get loans but advice for their businesses and even market for their products. And where trustees are able to network and find great value for being part of this community!
What are you passionate about?
I am passionate about seeing people’s live impacted positively. Seeing them get their self- esteem back because somebody, somewhere believed in them and in what they are doing and trusted them with their money.
Advice for entrepreneurs?
Have focus on where you want your business to be. Strategize on how to get there and work hard towards that goal. Connect yourself to people who have been through that path and seek their guidance. Understand the mistakes they made so that you don’t make them.
Your business might be small today but never despise humble beginnings. You can create an empire out of it but only if you remain focused and invest your time and resources to it!
I have a rather bold, turquoise and brass necklace I wear regularly in Nairobi. I sometimes get asked where it’s from and say it’s made by artisans we work with through Kiva Zip.
I was waiting on the back of my boda driver’s motorbike at a petrol station in Kibera when Veronica approached us. She walked me over to her working area, a place she calls “a society of artisans,” where over 150 artisans work daily on designs that end up in local markets, in a kiosk at Jomo Kenyatta Airport for a last minute purchase or maybe if things align correctly in a store near you.
Photo by Praise Santos
I greeted Veronica’s two craftsmen who were finely sawing and shaping the small, white camel bone pieces that comprised the bracelet she worked on in that day's workshop. She explained to me that each camel bone costs 80 Ksh (roughly $.90USD). “They are sanded in 5 stages and after you’ve finished sanding you bleach them with hydrogen peroxide to get the pure white look,” she says.
Photo by Praise Santos
Photo by Praise Santos
Veronica sources these materials from local butchers. After the crafting process is complete each piece feels and looks unique, a distinction only handmade designs can achieve. After working in crafts for 7 years, Veronica opened her business, AfrikanLive, in August 2013. AfrikanLive is a small design and production organization dedicated to crafting designs made of cow and camel bone, cow horn and Maasai beads.
Originally from Siaya county in the Kisumu region of Kenya, Veronica is the 6th born in a family of 7 children. “I was introduced to Kiva by Shop Soko,” she says. “They are also my biggest clients so far.”
Photo by Praise Santos
The biggest challenge for her business is finding a good market or access to markets for the products she makes.
Women in Africa produce 60-80% of the continent’s goods; yet they earn only 10% of the income. Kiva Zip Trustee Shop Soko bridges this gap by connecting Kenyan artisans directly to consumers all over the world via web and mobile platforms. Soko is in many ways an African mobile marketplace.
Soko operates as an e-commerce platform that connects mobile-enabled artisans in Kenya directly to web-based consumers all over the world. Imagine an Etsy platform for artisans who normally do not have access to the Internet and Soko bridges that gap. They help artisans like Veronica gain access to new markets around the world and provide mentorship on design and business skills. Artisans are able to upload a vendor profile, product images and descriptions to the website using SMS or their mobile platform, allowing them to trade even in areas without Internet services.
Veronica used her first Kiva loan to buy a smartphone to allow her to take photos of the products she makes. She sends these mobile photos directly to Shop Soko so they can assess the product designs. She has also been able to set up a Facebook Page and LinkedIn account to gain recognition as a designer and network with international designers to sell products.
Photo by Praise Santos
With so many middlemen in the craft supply chain, this new marketplace revolutionizes international trade, cutting out the middlemen to create economic opportunity, increased profits for artisans and reduce logistical costs by over 70%.
Veronica recently applied for a 2nd Zip loan. She plans to buy a bench cutter machine which is used to cut designs, bones and other materials. It will enable her to make more accurate and varied designs to differentiate her products.
She aspires to get a bigger workshop to hold client meetings and show product samples. “That’s always the wish. To have a business grow from where you are to a bigger enterprise,” she says.
Watch our interview with Veronica at her workshop here:
Veronica Workshop Interview
Join us on Twitter: ...(continued)
Kiva Zip Kenya 2014 perspective from Program Manager, Akash Trivedi:
Nearly 2.5 billion people in the world today are financially excluded. 80% of them – nearly 2 billion individuals - live on less than $2 a day; and of these, only 25% have been afforded the opportunity to save money at a formal or semi-formal financial institution (e.g. Banks and Microfinance Institutions).
In Kenya alone, 60% of the adult population does not have access to traditional forms of financing - forced instead to rely on exorbitantly priced money lenders and/or local community savings groups, which don’t always offer the most flexibility in terms of liquidity.
While Microfinance Institutions (MFIs) like Faulu, Kadet, and K-REP and banks like Equity continue to (courageously) push the boundaries of financial inclusion outward, the fact remains that many of these entities, by virtue of their business models, will nevertheless fall short of serving the most excluded and underserved populations. Not because of a lack of “want to” but because as for profit organizations trying to keep themselves out of the red, they can ill afford to take risks on entrepreneurs that live in remote communities, have health issues, are under the age of 25, or have startup businesses.
With Kiva Zip, a new web-based not-for-profit direct lending platform that combines crowdfunding and mobile payment technology we aim to change this, and in so doing extend the reach of microcredit farther than ever before.
For starters, when a borrower posts their picture, story, and loan request to our website, they are not funded by a bank or an MFI but by ordinary people from all over the world contributing as little as $5 and seeking no return other than meaningful human connection – which is to say all of our loans are genuinely 0% interest and genuinely affordable.
Secondly, by using M-PESA to send money directly to borrowers via their mobile phone, we’re able to connect to thousands of individuals without multiple physical locations - even if they live in far off places like Mfangano Island in Lake Victoria.
Finally, and perhaps most importantly, by partnering with what we call trustee partners – a broad term that includes community leaders, churches, technical assistance providers, youth training organizations etc – we’re able to identify and evaluate entrepreneurs on the basis of their character and work-ethic instead of limiting financial criteria such as how much collateral they have or what their balance sheet looks like.
One trustee in particular that underscores the inherent value and potential of social underwriting is Youth Banner (TYB). Youth Banner, as the name would suggest, is not an MFI or a bank; it doesn’t have credit officers, doesn’t have experience managing credit risk, and before Kiva Zip had never given out loans. But it is an exceptional organization whose sole mission is to empower young people through entrepreneurship. Case in point, each of TYB’s kids must commit to a rigorous three-step program before they join – an intense 3 month business mentorship and training course, the formal registration of a viable business, and lastly regular check-ins and 1:1 coaching sessions once their business is up and running. By the time they’re done, these young entrepreneurs have developed a lasting and intimate relationship TYB and its team. Who better than Youth Banner then to assess which of these young entrepreneurs will be able to take full advantage of a small 0% interest business loan and have the moral fiber to pay back? A bank?
If there’s one thing we’ve learned since we launched in late 2011 it is that when you can identify the right people for a loan, impact is sure to follow. Take Yohannes for example. Yohannes is a refugee from Ethiopia. He has been living in Kenya since 2011, has all his proper documentation and by every definition of the word – I’ve personally met him – is a gem of a human being; however given his social standing, he would have never have qualified for credit on his own. In fact, had it not been for his trustee RefugePoint’s unwavering belief in his worth as a person and as an entrepreneur, he would likely still be scraping by selling secondhand shoes and eating 1 meal a day. But after completing his second Zip loan he is now selling brand new football jerseys, significantly increasing his business; he is eating three full meals a day; and he has even taught himself how to use the internet. Not only that, he has so much more self-confidence. He has registered for multiple marathons, and has mentioned on more than one occasion that he would very much like to become a trustee one day so that he too, can help people in his community. Neither of which, he would have been possible 18 months ago.
In so many ways, Yohannes is symbolic of the Kiva Zip story. In a little over 2 and half years, our small little program has made over 2000 loans year in Kenya through approximately 160 trustee partners - surpassing even our wildest dreams. But the thing is we’re just now beginning to figure out what’s possible. While we won’t be running marathons any time soon, if what we’ve seen in the past several months is any indication, we’re on the verge of creating something special. Imagine a future where leaders from all walks of life and sectors come together to form an exclusive community whose sole purpose is to help one another galvanize aspiring entrepreneurs; imagine a future where these entrepreneurs can connect with one another and lenders all over the world, sharing information and forging bonds that will enable them to grow their business and secure their dignity; and imagine a future where after lifting themselves up, these entrepreneurs can pay it forward by endorsing/lending to other hardworking individuals in their own social network. It might sound farfetched but I can assure you, it’s not.
If you are an aspiring entrepreneur or know of one who deserves a hand up, join us. Together, I believe we can go far.
Dreamer, Kendrick Lamar enthusiast and Kiva Zip Kenya Program Manager, Akash Trivedi has been with the Kiva team for 4 years. He's interested in creating scalable and sustainable impact.
Background before Kiva Zip?
Graduated from Wharton Business School at the University of Pennsylvania in 2007 with a dual degree in Finance and Management. I pursued a couple of start ups after I graduated, first as a co-founder and then as the business controller before moving out to the Bay. Spent a year and a half as a financial analyst at a tech company out in the East Bay called MobiTV. Started @ Kiva in 2010 as an intern and became the company's Chief of Staff in 2011 where I worked directly under the CEO and President, Matt Flannery. We launched Zip in Kenya in November 2011.
What were you hoping to achieve at Zip?
For me, Zip is not just an evolutionary change to microfinance, it's discontinuous. If we do this well, we have the opportunity to expand access/create options, significantly lower the cost of capital (even if it's not ultimately 0%), and create meaningful linkages (e.g. connecting a farmer in Bungoma to another farmer in his community to agriculture consultants in Nairobi to a lender in Houston and so on.)
My goal is to create a truly global community bank.
3. What are you passionate about?
At my core, I'm passionate about two things: learning about people and their life stories, and helping people reach their potential. I think that's what's so inspiring about the premise of Zip. It's about sharing experiences/capital in an effort to help entrepreneurs reach their potential.
4. Advice for entrepreneurs?
There are no shortcuts when trying to start your own business. The journey is long; the journey is difficult. However there ARE things you can do to help yourself. Firstly, connecting to a mentor who believes in you and is willing to provide regular support. Secondly, taking small bets. Starting a business can be very capital intensive and many entrepreneurs convince themselves they need all of the money up front; but if you're smart you can often figure out if an idea is going to work or not at very little cost to you.
Who: Everybody! Feel free to share this free event with your family, friends, customers, colleagues, mailman, dogwalker, everyone!
What: Kiva City Los Angeles Reunion Event host by the Mayor's Office Of Economic Development
When: Wednesday, May 14 (9:30AM to 11:30AM)
Where: Los Angeles City Hall, Bradley Tower on 26th Floor (200 N Spring St, Los Angeles, CA 90012)
More details & RSVP: KivaLA.eventbrite.com
3 reasons to go to the Los Angeles Kiva Reunion event co-hosted by the Mayor's Office of Economic Development
1. Meet inspiring local entrepreneurs and small business owners
We are proud to be featuring a diverse set of entrepreneurs and small business owners who are all working to improve LA in their own special way. All of these businesses have grown with help from a Kiva Zip loan. These Kiva Zip borrowers will be showcasing their businesses, providing yummy samples, and selling their products. Come check out coffee samples from Manifesto Cafe, rice balls from Mama Masubi, music products from Beat Cruiser, innovative cardboard shelter from Cardborigami, garments designed for individuals in wheelchairs from Cozee-on-the-Go, and many more!
You can expect to meet entrepreneurs from: Alba Snakes & Services, Beat Cruiser, Cardborigami, Chino's Dogs, Community Seafood, Cozee-on-the-Go, El Sereno Shoe Repair, HoneyColony, Mama Masubi, Manifesto Cafe, Master Custom Cabinents, Out of the Box Collective, and Royal American Plumbing Services.
2. Hear how local leaders are spearheading positive change in LA's neighborhoods and economy
Three of these entrepreneurs will be speaking about their experiences and how a Kiva Zip loan has helped them.
Don't you want to hear about how Julio escaped civil war in El Salvadore and started his own plumbing business with his son, William? How about how Nelson is leading a health revolution in his neighborhood snack shop and throughout LA? And who wouldn't want to hear about a lifetime friendship between a borrower, Alfredo, and his trustee who is the founder of the Gumball Foundation?
Kiva Zip's success in LA is largely due to the hard work many of Kiva Zip's trustees have put into improving the city. Many of these trustees including The Gumball Foundation, Barrio Planners, and LA Food Policy Council, will be at the event to share their experiences. We will also be announcing a partnership between Kiva Zip and the City of Los Angeles! The City of LA and its BusinessSource Centers are becoming Kiva Zip trustees to further provide interest-free capital to local LA entrepreneurs and funnel an estimated $5M in capital into the LA economy in 5 years. That's an estimated $15M in 10 years!
3. Take in awe-inspring views of the beautiful City of Los Angeles
If the inspring entrepreneurs, socially impactful business models, innovative community leaders, and tasty samples aren't enough, come for the view! City Hall's Bradley Tower on the 27th floor is one of the best places to take in expansive views of LA. Just check out the below photo that I quickly snapped on my phone while checking out the venue for the first time!
A few decades ago, many small US farms were going out of business and being consolidated into large agri-businesses that grow only a few commodity crops. Today, a new generation of young farmers is working to revive small farms and provide fresh fruits and vegetables to their local communities. For many of these young farmers, working the land represents a way to combine ecological sustainability, community, and honest hard work.
One such farmer is Kiva Zip borrower Ben Abell, who runs Rootbound Farm in Prospect, KY with his wife Bree.
“I love the lifestyle of farming,” says Abell, “working the land and feeding people healthy produce. I love being an entrepreneur and the challenges of building a small business. It is exciting to be part of a community of beginning farmers, in Kentucky and beyond, working to make our businesses succeed and have an impact on the land and on our communities.”
At Kiva Zip, we love supporting farmers like Ben, who have incredible vision, energy and enthusiasm, but often lack the capital necessary to fully realize their dreams. According to Ben,
“There are almost no banks that will give any type of loans (operating, equipment, land purchase) to farmers. There are ag-specific lenders but their lending model is geared heavily towards conventional commodity production and they are wary of smaller, diversified farms supplying the emerging ‘local food’ market.”
At Kiva Zip, we are working with our nationwide network of Trustees to reach out to farmers like Ben and help expand their access to capital. Ben is now fundraising a $10,000 loan thanks to his Trustee, Seed Capital Kentucky, which reached out to introduce him to Kiva Zip.
“I was asked to consider trying a Kiva Zip loan by [Seed Capital Kentucky]. I was very interested in the opportunity. Not only does the Kiva Zip loan offer us the ability to grow our business, but it allows us to build community at the same time.”
The opportunity to build community lies at the heart of both Kiva Zip and the local food movement, which is part of the reason that Kiva Zip and farmers work so well together. When I asked Ben what his favorite aspect of crowdfunding a loan was, he told me it was watching how people from his local community and around the world have stepped up to support him and his wife Bree.
If you would like to support Ben, you can visit his loan page here. If you’d like to learn more about Rootbound Farm, feel free to email Ben at: email@example.com. If you live in Kentucky, you can find Ben’s veggies at a number of restaurants in Louisville and Lexington, in produce boxes from GreenBEAN Delivery, and every Saturday at the St. Matthew's Farmer's Market in Louisville, KY.
It takes a lot of ambition and resources to follow a passion and create a business from scratch. Typically, the entrepreneurial world is dominated by men. Tomas Chamorro-Premuzic, Professor of Business Psychology at University College of London, has observed that there are more men taking on entrepreneurial enterprises because they generally have easier access to sources of capital and are less risk-averse than women.
In Pittsburgh, there are two women who defy this stereotype.
Artice Coleman supports her entire household. Financially, she does this almost entirely on her own. After her husband, Monroe, had to leave his job as a counselor to mentally challenged adults at Mercy Behavioral Health due to debilitating rheumatoid arthritis several years ago, she assumed the role of primary breadwinner. She also takes care of her grandmother, Ruth, 91, who lives at home with them.
Artice does all of this with an incredibly positive heart and attitude. She works at the Pittsburgh School District Board of Education as a Student Data Specialist and spends her free time writing her spiritual books, putting on free events to empower women, and volunteering at Divine Intervention Ministries.
Denise Mahan worked for over 20 years in the dental field, but her passion has always been with pets. Her husband, Terry, shares this passion, and a few years ago they started Happy Tailz Spa, a pet grooming business that they operate from their home. Denise runs the business and does the bulk of the dog grooming while her husband works to support Happy Tailz Spa while they move into a storefront in Wexford, PA.
Their Kiva Zip Loans:
Artice Coleman is currently fundraising for a $5,000 loan on Kiva Zip that would cover the publishing costs of her second book. She is excited to follow up her first book, Lady Wisdom Tea, with a spiritual book aimed at encouraging children. Artice has loved participating in Kiva Zip and connecting with her lenders, and has been personally thanking each one on her loan profile.
Denise Mahan hopes to draw new customers into Happy Tailz with a new oxidation machine that treats skin problems in pets without the use of steroids. It would be the only one of its kind in the region. Kiva Zip proved to be a good option when they ran into difficulty finding sources of capital. “Until you’re actually making money, they don’t want to give you money,” Denise said. She is currently fundraising for a $5,000 loan that would cover the cost of the new machine.
Their Kiva Zip Community:
“I just appreciate the time, and the effort, that all of these people have made on my behalf,” Artice said, “I get such a high every time I see another person lend to me. They are my miracle team!”
Kiva Zip has also been a source of inspiration for Denise, showing her that people believe in her business even when they haven’t met her personally. Denise has also been touched by the investment made by Evan and Tracey Segal, who are personally matching each loan amount made to Happy Tailz Spa. As she put it, “I have someone here who believes in me so much, he will match the amount you lend to me. That he believed in me, it made me cry.”
Join Artice’s miracle team by helping her publish her second book here.
We are raising money on Kiva Zip so we can turn the tide against the devastating social impact of distracted driving: thousands of avoidable deaths, countless injuries and millions of traffic hours.
I wasn’t planning to be an entrepreneur developing a mobile app, but I can’t step away from the idea now. Each time someone is texting behind the wheel, it is literally a matter of time before the distraction leads to an accident or worse. A bit about me: I went to Regis High School in New York City, was educated as a mechanical engineer, and then spent five years as an Officer in the US Navy. Following graduate school, I spent a number of years working at large companies…until I felt there was a broader social impact I could have by building things like Rider Revenge.
We all know someone who has been impacted by a driver who was texting, or not focused on the road. In New Jersey alone, one person dies every other day because of distracted driving. We believe that our innovative software platform will give vehicle passengers the power to change driver behaviors.
In the two months since we started receiving money on Kiva Zip, we have built good momentum behind our project: we conducted market research with parents, started development on our mobile app prototype, formed an experienced Advisory Board and refined our commercial model to ensure this will be a sustainable social enterprise.
Your support is needed now more than ever. Our loan will expire in about a week and we still have 58% more to go ($2,800 needed). Please join us in the fight against distracted driving, and help us raise the money we need to develop our software prototype: https://zip.kiva.org/loans/3586.
At Kiva Zip, we love supporting farmers, who often struggle to gain access to conventional bank loans. This week I took some time to talk with Sarah Lopez, who runs Fiesta Farm with her husband Aurelio. They are now fundraising their second loan on Kiva Zip, which you can check out here.
Kiva Zip: Can you introduce yourselves and Fiesta Farm? What do you grow/raise on Fiesta Farm?
Sarah: We (Aurelio and Sarah Lopez) raise livestock on pasture for meat and eggs, and we're working on plans to add vegetables and fruits to the farm. It is such a joy to see happy animals gobbling up grass and romping around our pastures and woods, and we also love the feeling of feeding other families with our efforts. We sell at farmers markets and through our CSA (community supported agriculture) program, where members partner with our farm by paying for a "share" at the beginning of the year and receiving meat and/or eggs on a regular basis throughout the season.
Kiva Zip: What are the major challenges that you face as small-scale farmers?
Sarah: Our biggest challenges have been needing to start a farm "from scratch," securing land, and developing pasture-based production methods for livestock that are more commonly raised in confinement.
Kiva Zip: As farmers, have you had problems gaining access to capital from traditional financial institutions? Did you try to get a traditional bank loan before turning to Kiva Zip?
Sarah: Our business is generally too young for most banks' lending policies, so we've provided a lot of our own start-up capital, as well as looking to private lenders and groups like Farmlink and Kiva Zip.
Kiva Zip: This is your second Kiva Zip loan, how was your experience with your first Kiva Zip loan? What were some of the positive aspects of your first Kiva Zip experience?
Sarah: Our first Kiva Zip loan helped us out with some much-needed equipment, and put us in touch with a great new pool of lenders/supporters. Receiving and paying off the loan funds was simple and straightforward.
Kiva Zip: How did you use the funds from your first loan?
Sarah: We used those first funds to purchase an ice machine and an automatic chicken scalder. Both of these save us time and money, every week!
Kiva Zip: What made you decide to take a second Kiva Zip loan? How do you plan to use these funds?
Sarah: This second loan seems like an opportunity to further expand our lending network, and there are some additional items that will save us time and money similarly to the items we purchased with our first loan. For this second loan, we're looking to get a livestock trailer (we currently rent the neighbor's when we need one), equipment to improve water delivery to our pasture (should save us at least an hour a day in chores!), and replace some of our laying hens that are getting too old to lay productively.
Kiva Zip: Do you enjoy interacting with the Kiva Zip community through the conversations tab?
Sarah: We love hearing from lenders, whether it's words of encouragement, advice, or even questions. It's also a great place to post updates about farm happenings, pictures, etc.
Kiva Zip: Have any of your lenders become customers?
Sarah: We've certainly had customers become lenders! I believe some of our lenders have become customers too, but I don't think anyone's ever come up to our market stall and said they first heard about us on Kiva.
Kiva Zip: If someone wants to become a Fiesta Farms customer and participate in your CSA, how should they contact you?
It’s been a really encouraging start to the year on the Kiva Zip team, and we wanted to share the good news with you, our community, who made it happen!
We think about three primary measures of growth on the lender-facing side of Kiva Zip – the value of loan ‘shares’ purchased, dollars deposited by lenders (as opposed to existing credit that is re-lent), and the number of lenders making loans.
1) Loan ‘shares’ purchased
March 2014 was our biggest ever month for shares purchased on Kiva Zip. You bought $295,920 of shares, slightly higher than the $286,170 purchased in July 2013, when we cross-promoted Kiva Zip on the Kiva.org homepage for the first time. (This cross-promotion explains the significant spike in all three of the charts below). The dollars of shares purchased in the first quarter of 2014, represented a 74% increase on the fourth quarter of 2014 – a really exciting surge!
2) Dollars deposited
The chart of dollars deposited reflects the dollars of shares purchased, but the growth is even emphatic. This is because a higher proportion of the July 2013 spike in shares purchased represented existing lenders relending their Kiva.org balances; whereas more of the growth over the last three months has come from new lenders depositing money in Kiva Zip for the first time.
3) Number of lenders making loans
3,894 lenders made a loan on Kiva Zip in March 2014, almost as high as the 4,524 that made a loan in July 2013. 7,670 unique lenders made a loan in the first quarter of 2014, almost as four times as many as in the first quarter of 2013, and 34 times as many as in the first quarter of 2012!
What explains this growth?
We believe there are four principal factors explaining the positive progress highlighted above:
1) Increased supply of loans. Both in the United States and Kenya, we have seen a tremendous surge in borrowers interested in applying for Kiva Zip loans over the last few months. As lenders read about, and engage with, more entrepreneurs on both sides of the Atlantic, they are being inspired to increase their lending on Kiva Zip.
2) The ‘Private Fundraising Period’ for U.S. loans. At the start of 2014, we instituted a new policy requiring every U.S. borrower to recruit 15 lenders from their own network, before we post their loan publicly on the Zip website. Not only is this great from a risk management perspective, but we’re also seeing it drive significant growth in lenders and loan volume, as borrowers ‘pay it forward’ by helping our marketing team in recruiting new lenders to the Kiva Zip movement!
3) Reducing fundraising times from 90 to 45 days. It’s difficult to say for certain, but we believe that the policy shift we made in late 2013 to shorten the fundraising time of Zip loans has further contributed to the recent growth in loan volume. On Kiva Zip, borrowers do not receive any money if the loan doesn’t reach its goal within the allotted timeframe, and so borrowers and lenders are compelled to “hustle” to get it done. On the Zip team, we’ve been inspired by success stories of borrowers like Julio, Rocio and Omar, who each raised thousands of dollars in the last couple of days of their fundraising periods!
4) $5 loan shares. We are not sure that the recent shift from $25 to $5 minimum loan shares has increased shares purchased or deposits, but we do believe that it is continuing to increase the number of new lenders willing to try out Kiva Zip for the first time.
Thanks to all of you for contributing to the growing momentum of the Kiva Zip program. Here’s hoping we see continued growth of our collective impact through the remainder of 2014!
Maria Alonso was one of the first borrowers I helped to fundraise on Kiva Zip. She had moved from Mexico to the US to find work to support her family back home, and at the end of last year she realized her dream of opening a retail store in the Mission. Several months after receiving her loan, Maria's father was diagnosed with a terrible sickness back in Mexico. Maria has been working day and night to save money and send it back home to pay for her father's treatment.
This family event has prevented Maria from keeping up with her normal monthly loan payments, and she has fallen into a delinquent status a couple of times in the last several months. However, since day one, Maria has always been in contact with me. She explained her problem and has shown a willingness to continue paying back her lenders in smaller but consistent installments. She also approached me to ask for help communicating with her lenders about her situation.
I worked with her on a solid strategy to gather the funds needed to achieve her repayment goals. I have also visited Maria's business on a frequent basis in the heart of the Mission district. In all the meetings I've had with her lately, she always concludes with a big smile, "Don't worry, I will never let my lenders down." Her positivity in the face of adversity is an inspiration to me.
It is also amazing to see a borrower's determination when, as a lender, you show compassion and view your loan as "patient capital." It may take Maria a little longer than we expected to pay back her loan, but I am confident that she will repay her loan in full and I am excited by the ultimate impact that this loan and so many others just like it will have on our borrowers, their families, and their communities.
Robert Breen and Mary Ellen Taylor bonding over lettuce & Kiva Zip. Photo by Ralph Alswang.
"It is overwhelming to me to feel that from a lending community, from people that I do not know, who are so generous and so giving, helping me to improve and grow my success in this business. It’s just awesome. We talk about it every day, what we’re going to do with the money. People are donating to us from Australia, from all parts of our country and across the world. It’s just fabulous to be able to send endless thanks to them, and to all of the fund matching organizations, as well as those people who are just giving five bucks! It’s just amazing.”
- Mary Ellen Taylor, owner of Endless Summer Harvest & Kiva Zip Borrower
Food production is the lifeblood of a nation. And increasingly, communities across the US are demanding a return to locally-owned, small-farm food production that is sustainable and organic.
However, despite high and growing demand for small-farm produce, small farmers often struggle to obtain the financing they need to meet demand. Credit conditions remain tough in rural America, putting small farmers at a significant disadvantage to the massive, industrial-farm operations with whom they compete.
Mary Ellen of Endless Summer Harvest is a savvy businessperson and passionate local farmer in Loudoun Country, Virginia. Known as “The Lettuce Lady” around Virginia and DC, her flawless heads of organic, hydroponic lettuce are famous throughout local farmers markets and on restaurant plates. She employs twelve local women—in some cases mothers and their daughters—to help her run her operations, making Endless Summer Harvest a true community farm.
I met Mary Ellen in March 2014 and was impressed by her energy, her passion for her community, and her detailed knowledge of every aspect of her business and the various markets she supplies. She is a true community leader and strong businessperson. She is one of the amazing local farmers introduced to Kiva Zip by FRESHFarm Markets, one of our key Trustee relationships in the greater DC area.
Despite Mary Ellen’s success and the demand for her products, she—like many small farmers across the US—has had difficulty getting a seat at the table when it comes to traditional bank finance.
Kiva Zip’s community of lenders stepped in and helped Mary Ellen grow her farm with a $5,000 loan. This loan enables Mary Ellen to install a second microgreen growing system at her farm. This will double her capacity of microgreens, a profitable secondary product she sells alongside her lettuce. In Mary Ellen’s own words, the increased capacity:
“…will enable us to certainly increase our sales, because microgreens are high value, and also it will necessitate bringing on a new person to manage this growth in our business.”
So, for a loan of just $5,000, Mary Ellen can not only increase her sales, but she will create a new job for a local woman in her community, and she can reinvest the profits from her microgreens to help further expand her business. This demonstrates the high social return on investment of a Kiva Zip loan.
Mary Ellen’s story is just one example of how Kiva Zip is filling the financing gap in rural America, helping farmers to improve their lives, expand their production, and create new jobs in their local communities. ...(continued)
First, a little bit of background. Bayou Microfund is a Kiva Trustee and we recently had our first micro-entrepreneur funded through Kiva Zip. He raised $5,000 in less than 2 months and has already begun paying back his loan.
Click here to read more about Alex Colby, his business, and his plans for the future.
Two amazing details caught our attention during our first effort with Alex. One was the geographic range from which funding was received – not just from all over the US but overseas lenders as well. From Taiwan to Copenhagen and everywhere in between! The other interesting takeaway was the $5 loan.
When Kiva changed the minimum lending amount from $25 to $5, I was skeptical. However, the number of $5 lenders proved me wrong. Out of 199 lenders to Alex’s campaign, 106 of them were for $5 – over 50% was raised by the $5 lenders!
Those $5 loans came from folks who simply wanted to share and help an entrepreneur. They came from grandmothers and students, workers and other entrepreneurs.
I came to realize that these $5 micro-loans are like drops of rain, that fall and form a small stream that then becomes a river which gushes forth and launches an entrepreneur. This is the power of the crowd and crowdfunding.
There are many of us who always have wanted to give back and Kiva Zip offers this incredibly powerful way to do it. The most amazing part? Once the loan is repaid, you can re-loan the money again – and again and again!
Will you be a $5 lender or maybe loan a bit more to a micro-entrepreneur? Make a loan, change a life!
Our second campaign is now live – click here to fund Heather and Sweet Luxuries Boutique Bakery!
Heather from Sweet Luxuries Boutique Bakery
For the first time ever, Kiva Zip is working with an entrepreneur out of Kansas City, Missouri.
His name is Matt Tady, and while most everything in our society has shifted its focus to digital landscapes, Matt’s work reaches back to a previous era—when quality goods were made with patience and expert craftsmanship.
Level Projects is Matt’s independent business where he produces leather goods, such as handbags, wallets and clutches. Founded three years ago, Level Projects is Matt’s primary focus. Not too long ago he quit his day job in order to realize his goal of working for himself to produce the products he believes in.
In the video below Matt shares what it’s like to run his own business in the Midwest and his experience thus far as a Kiva Zip borrower.
Support the growth of small U.S. businesses!
“Nobody believed in me. They told me I couldn’t do it,” said Garrick, owner of Mason Catering Services.
I met Garrick in late-March at one of his catering events in Bedford-Stuyvesant, Brooklyn (aka Bed-Stuy, my neighborhood). Garrick, Jamaican-born and a U.S. resident for the last five years, has built up his business from nothing. In 2011, with only $150 in his pocket, Garrick started his Caribbean-American food catering business.
As he sought to grow his business, he had ten different loan applications rejected before receiving a $5,000 Kiva Zip loan in July 2013. Each rejection came with a decrease in his credit score. Fortunately, Garrick found his way to CAMBA, a Kiva Zip Trustee that provides services that connect people with the opportunities to enhance their quality of life. CAMBA is one of Brooklyn’s largest community-based organizations. CAMBA endorsed Garrick because of his “[commitment] to growing his business and [embodiment of] resilience and hard work, having overcome homelessness twice to bootstrap his business without any outside help.”
In the short time I spent with Garrick, I could easily understand why CAMBA endorsed him. Intelligent, enthusiastic, and entrepreneurial, Garrick is the ideal Kiva Zip borrower. He is paying back his loan on time and is hoping to apply for a larger Kiva Zip loan once he finishes repaying the first one. As Garrick puts it, “My business is a good business. It’s a full fledged business. My biggest problem now is money.” This is no surprise to hear, as access to capital is a top constraint to growth reported by U.S. small businesses. Since receiving his Kiva Zip loan, Garrick has been very successul. His part-time staff is now up to eight individuals, and he can be found working at baby showers, weddings, birthdays and church events.
How does Garrick feel about Kiva? “Kiva is a big part of my business. Where would I be today without Kiva?” Hearing that from such a wonderful person validates my work as a Kiva Fellow. It is these types of meetings that inspire me.
Let’s help inspire others by lending $5 to a New York area entrepreneur looking to grow their business, create jobs, and positively impact their local community.
Love from Brooklyn!
Evan Segal looks on as Tracy Carter speaks at the Kiva City Pittsburgh launch party.
“Pittsburgh is going to be a model for Kiva Zip.”
Evan Segal, a Pittsburgh business leader and Kiva Zip proponent, began the Kiva City Pittsburgh launch with a bold prediction. Last week, Pittsburgh became the 8th Kiva City, launching at Marty’s Market in Pittsburgh’s Strip District with over 160 attendees. The huge turnout demonstrated the potential in Segal’s promise, and Pittsburgh’s supportive, community-minded nature.
“What Kiva Zip is doing is not unlike what Pittsburghers have been doing for years: supporting each other," said Dr. Curtiss E. Porter, Chief Education & Neighborhood Reinvestment Officer of the Pittsburgh Mayor’s Office.
Pittsburghers proudly support local businesses, and Kiva Zip’s lending model adds a new dimension to fulfilling this philanthropic spirit. By lending as little as $5 through the website, anyone can participate in funding 0% interest microloans to new and existing entrepreneurs and help them gain access to capital that they might not otherwise have received. For first time lenders to most of these Pittsburgh loans, PNC Foundation will generously match loan amounts. Kiva City Pittsburgh is supported by PNC Charitable Trusts, PNC Foundation, Richard King Mellon Foundation and Henry L. Hillman Foundation Opportunity Fund.
The event, hosted by new trustee Marty’s Market in the Strip District, was attended by former borrowers, trustee organizations that support local entrepreneurship, local politicians and supporters of Kiva Zip in Pittsburgh. The event featured a Kiva Zip merchant’s market, with seven borrowers selling their wares, from Pittsburgh-themed cards and shirts to locally roasted coffee.
Tracy Carter, owner of Shear Delight Hair Salon, spoke at the event about her experience receiving a loan from Kiva Zip: “In this cynical world, I couldn’t believe there were 95 people who were good enough to lend to me, and to believe in my dream. It was such an emotional journey for me, and I’m so grateful.”
Dr. Curtiss E. Porter, County Executive Rich Fitzgerald, and Kiva President Premal Shah
Speakers included Kiva President Premal Shah, County Executive Rich Fitzgerald, Dr. Porter, and Kiva Zip loan recipients Maria Graziani and Tracy Carter. Graziani, who owns Healcrest Urban Farms, funded a $5,000 loan on Kiva Zip in November 2012, repaid it on time, and recently applied for a second loan of $10,000. This second loan funded in an astonishing 24-hour period.
In total, 12 Pittsburgh businesses have loans that are currently fundraising, and over 20 local entrepreneurs have received loans already.
Emily Keebler, Kiva City Pittsburgh Lead, captured the energy of the evening with a call to action, inviting attendees to participate as lenders, trustees and borrowers.
“Kiva City Pittsburgh is not a one time event – it’s the start of a movement,” Keebler said.
Participate in the movement by lending to a Pittsburgh entrepreneur here .
Two years ago, the Institute for Veterans and Military Families (IVMF) became a trustee with Kiva Zip to offer micro funding for veterans with disabilities. Today, Kiva Zip is out of the pilot phase and has been enabling numerous entrepreneurs across the US to start and grow businesses.
IVMF Trustee Group
As a trustee, the IVMF has enabled 10 veterans, all graduates of the Entrepreneurship Bootcamp for Veterans with Disabilities (EBV) program, to raise and disburse a total of $36,000 in micro loans. An amazing benefit of these Kiva Zip loans is that they all are 0% interest.
On March 1, 2014, Jamie Critelli, of the 2012 EBV class at UConn class and owner of Floral Beauty Greenhouses, paid back IVMF’s first Kiva Zip loan. This $5,000 loan was used to fully automate his greenhouse watering to help Jamie cut down on employee overtime costs each year during peak season. Overtime costs are currently $0 each season and his employees can concentrate on other value-adding activities.
Jamie of Floral Beauty Greenhouses
Jamie just submitted a new loan application, this time seeking $10,000 to obtain a NYSERDA grant to increase the energy efficiency of his greenhouses and introduce new products that can be sold year round.
All loans that have been approved by IVMF so far have been paid on time – this success can be partly attributed to the EBV program’s selection of high-quality, passionate veteran entrepreneurs (or vet-repreneurs) for its program. True credit goes to the veterans themselves, though, who have demonstrated the character associated with former military members, representing moral values and good citizenship earned through service in uniform. Their character is reflected in the hard work and efforts that go into building a strong business plan and the work ethic needed to start, sustain, and grow a business.
Kiva Zip loans have helped vet-repreneurs in many different ways – as diverse as the veterans’ businesses themselves:
- Jamie used his loan to reduce his operating expenses, and now he is seeking a new loan to gap fund his grant.
- One micro-loan was used toward the patenting and licensing of a product.
- A $2,000 micro-loan allowed a veteran to introduce his BBQ Sauce into Hy-Vee grocery stores across the Midwest.
- One company used its loan to develop a professional website and increase their national reach.
- Three businesses used $5,000 each as their start-up capital.
- One business used a micro-loan to expand its market into new state.
Kiva Zip micro-loans have contributed toward EBV’s success rate, where 66% of program graduates start a business within six months of graduation. Crowd funding programs such as Kiva Zip have enabled 90% of EBV start-up businesses to sustain and grow their businesses.
Finally, Kiva Zip’s model adds another level of value – social value. It allows us, citizens and non-veterans, to give back to the men and women who have served our nation. It allows us to serve those who have served us, without much effort, considering that the funds we lend will most likely be returned to us by these once brave service members, now brave entrepreneurs.
Join us in serving those who have served. Support brave vet-repreneurs such as Jamie and enable them to continue serving our nation in developing and growing economic opportunities for us all.
Last week, I had the wonderful opportunity of meeting Julio and William, second-time Kiva Zip borrowers from Los Angeles. Within a few minutes, I could see how warm, dedicated and hardworking they are. They are committed to their families, their business and their Kiva Zip lenders. I'm excited (and honored) to share their story with you.
Julio first moved to the United States from El Salvador to escape civil war and build something better for his family. His son, William, trained for 3 years in the plumbing trade before feeling the same calling to build something for his family. With just a couple of tools, they began their own father and son plumbing and handy services business. In 8 years, they’ve grown the business so much that they need an influx of capital to continue growing.
William first met their trustee, Barrio Planners, through a city-wide marketing campaign to raise awareness of LA BusinessSource Centers. Since then, he has taken countless business training classes with Barrio Planners. The organization was impressed by William's dedication - He was always pushing himself to learn more and expand his knowledge base. William would contact them about upcoming trainings before they even got the chance to get the word out! They attest that this ambition and work ethic is the reason why Julio and William’s business has grown so quickly.
Last October 2012, Julio and William fundraised their first Kiva Zip loan. They used this loan to purchase tools, obtain a contracting license, and purchase advertising space. Both Julio and William do not have a computer so they further displayed their commitment and endurance by frequently visiting Barrio Planners to use their computers to respond to lenders and repay their loan!
When asked about his first loan, William excitedly said, “It’s beautiful. Barrio Planners are great people. Kiva Zip is an excellent program.” Julio and William even got to meet a couple of their past lenders who hired them to work on some plumbing issues in their own homes! Julio and William are so grateful that they wanted to personally thank all of their lenders.
View their thank you video here!
Julio and William are currently fundraising for their second Kiva Zip loan. They are asking for $10,000 to purchase a new van to be able to operate larger equipment and further expand their business. Support this father & son business today!
We’re finding ourselves using three phrases a lot these days, and so we wanted to take a moment to articulate what we mean by them:
1) Social underwriting
A hundred years ago, underwriting was largely based on relationships – look at the example of George Bailey in It’s a Wonderful Life for a beautiful example. But over the last few decades, with the advent of technology and big data, conventional lenders’ underwriting decisions have come to be based almost exclusively on financial data – a borrower’s FICO score, the strength of their balance sheet or cashflow statement, etc. Financial underwriting clearly works – otherwise the finance industry wouldn’t employ it. But it doesn’t paint a full picture. Averages and algorithms can’t capture a person’s character, and so an information gap is created.
Social underwriting involves using social data to assess creditworthiness. Mohammed Yunus was an early pioneer of this concept in the field of microfinance, and there are many other exciting examples of companies looking to leverage social data to underwrite loans today. Lenddo.com uses borrowers’ Facebook networks to make credit decision; and Entrepreneurial Finance Lab gauges borrowers’ “entrepreneurial-ness” through psychometric testing.
In the Kiva Zip context, we think about social underwriting in three ways:
1) The deep relationship that exists between a borrower and a trustee
2) The decisions that our crowd of lenders make in determining who to lend to, based on their interactions with the borrower
3) A borrower’s ability to demonstrate their entrepreneurial “hustle” and trust network, by rallying 15 of their network to lend to them
In these three ways, we are trying to complement financial underwriting with social data. To look beyond the strength of a borrower’s credit score, to the strength of their character.
2) Social collateral
Conventional collateral takes the form of conventional assets – cars, houses, machines, etc. On Kiva Zip, we don’t take any collateral in the conventional sense of the word. But by requiring borrowers to invite 15 of their friends and family to lend to them, we take social collateral in the form of these relationships between borrowers and their social networks. We are securing Kiva Zip loans not with a Toyota, but with trust. Borrowers that default on their loans breach that trust, and lose that asset.
3) Social capital
When you take out a loan from a bank, you really only get one thing…money. Let’s call this “financial capital”. When a borrower takes out a loan on Kiva Zip, they not only get financial capital (and financial capital on very generous, 0% interest terms), but they also realize a number of other benefits, because the nature of crowdlending is that it connects borrowers potentially with hundreds of people.
Over the last two years, we have seen countless examples of these people (Kiva Zip lenders) supporting borrowers in a myriad of ways – becoming their customers, dispensing business advice, acting as their brand ambassadors by promoting their business on social media, etc. We believe that being an entrepreneur is one of the hardest jobs in the world, and oftentimes entrepreneurs struggle with a lack of confidence. Perhaps the most powerful way that the Kiva Zip model supports borrowers is by boosting this confidence. When 200 people say “I support you. I trust you. I believe in you. Go make this happen!”, that represents a huge emotional encouragement and psychological fillip.
Another benefit of social capital is that it is more patient and gracious than financial capital. When a bank loan enters delinquency, the borrower is met with late fees, accumulating interest payments, and very little flexibility. When Kiva Zip borrowers go delinquent on their loans, as long as there are valid reasons for the late payments (e.g. the borrower is taken seriously ill), in the vast majority of cases we have seen Kiva Zip lenders respond with generosity and understanding.
We believe that social capital is much richer and stronger than financial capital alone.
Where conventional lenders are stepping back from making loans, people like you and me are stepping up.
Where conventional loans are securitized by financial collateral, Kiva Zip loans are based on social collateral, in the form of bonds of trust between borrowers and lenders.
Where conventional loans are based on the money alone, Kiva Zip loans provide borrowers with customers, business advisers and brand ambassadors.
And where conventional delinquency is met with late fee penalties, delinquencies on Kiva Zip are met with an overwhelming outpouring of support.
This is what social capital means. ...(continued)
After more than a year of making loans to Pittsburgh entrepreneurs, the Kiva City Pittsburgh launch is finally upon us.
To date, 29 entrepreneurs in Pennsylvania have had their loans crowd-funded on Kiva Zip by 1,700 people from 47 states and 41 different countries. The entrepreneurs were endorsed by 14 different Kiva Zip Trustees including Urban Innovation and Pittsburgh Public Marketing . Urban Innovation21 is working to train successful entrepreneurs in some of the region’s most underserved communities. In their first two years as a business, Pittsburgh Public Market has helped to incubate 72 small businesses.
Kiva City Pittsburgh is made possible by several area funders and organizations including PNC Foundation-Charitable Trust, PNC Banks, Richard King Mellon Foundation, and Henry L. Hillman Foundation Opportunity Fund.
Through Kiva City Pittsburgh, everyone can help fill the lending gap for small businesses by crowdfunding loans. Just visit www.kiva.org/pittsburgh to browse small business owners’ profiles and stories, and choose someone to support with a loan of $5 or more.
Pittsburgh has already set their sights high by making a goal of funding 100 entrepreneurs in their first year as a Kiva City.
I heard a lot of great things about Oregon before moving here for the Kiva Fellowship: it's beautiful, no shortage of live music and local food, Portland is where all the “coolest” people from San Francisco eventually move… However, as I set out to get to know Kiva’s existing Trustees (partners that make our work possible in and around the Portland area) I was not expecting the immense amount of enthusiasm and excitement for our work, community, and the Kiva Zip program. In just 11 months since the posting of the first Kiva Zip loan in Oregon, this incredible network has funded over $136,000 in 0% interest loans to Oregonian entrepreneurs – talk about community! In addition, to date, all Oregon loans posted to Kiva Zip have been fully funded.
Carolina and Diana are two Oregonian entrepreneurs currently fundraising for their business in Portland that I had the pleasure of meeting during the first month of the Kiva Fellowship.
Owners, Diana and Carolina
As I walked into Mama Leo’s restaurant in Northeast Portland, I was instantly warmed by the sound of Latin acoustic music. A young girl seated us at a table in the back covered with tropical photos from the northern coast of South America. Owners Carolina and Diana soon joined us to share the history of how Mama Leo’s, named in honor of Diana’s mom, Leonor (known by her friends as ‘Leo’) and her delicious recipes, came to be.
photos from Venezuela and Columbia covering the tables
Their restaurant, Mama Leo’s, opened its doors just nine months ago. After years of their children telling them how they wished there was a place they could go for authentic home-cooked cuisine, Carolina and Diana decided to experiment with the idea by operating a booth at a local festival. It was a success! Their customers, pleased with their meals, kept asking, “Where are you located?” With clear demand, the duo decided they would give their delighted customers a reliable source of authentic Colombian and Venezuelan cuisine.
The two single moms were neighbors in Venezuela before immigrating to the U.S. in search of more opportunity. According to Carolina, Diana is the one with the culinary talent, but the business wouldn’t be possible without Carolina managing the administrative, marketing and social duties required to start a business! They are the quintessential dynamic duo.
After Carolina heard from a friend about the wonderful technical assistance program offered by the Hispanic Metropolitan Chamber, a Kiva Zip Trustee, the two business owners worked diligently with The Chamber to make their entrepreneurial dream a reality.
They are currently fundraising for a Kiva Zip Loan to allow more than two appliances in the kitchen to run at the same time! This unfortunately requires substantial electrical work, and will cost approximately $9,500. This improvement will enable them to reliably serve more customers. They are seeking a $5,000 Kiva Zip loan at 0% interest to help cover these costs. As a testament to the wonderful sense of community Diana and Carolina have cultivated, a regular patron of their Restaurant, Paula, will be hosting her birthday celebration at Mama Leo’s and has asked her friends only to make a loan to Mama Leo’s as a birthday gift.
Become part of this beautiful community supporting these two inspirational ladies, and Oregonian small business by making a loan here - https://zip.kiva.org/loans/2377.
local newspaper clippings about Mama Leo's ...(continued)
Ezequiel Olvera was just 11 years old when he first met Alfredo, a cobbler and small-business owner in Los Angeles. Even at that young age, Ezequiel already had the entrepreneurial bug and approached Alfredo to ask if he could put a gumball machine in Alfredo’s shoe repair shop. Alfredo agreed, as long as Ezequiel maintained good grades. Ezequiel held up his end of the bargain and he continued to place gumball and refreshment machines around the city, saving the profits towards his college fund.
Years later, Ezequiel’s entrepreneurial start led him to form the Gumball Foundation, a program that engages middle and high school students to run their own small-scale businesses as an educational tool. Ezequiel is also returning the support to Alfredo, by acting as a trustee and endorsing him for a Kiva Zip loan, along with other hardworking entrepreneurs in the LA area, like Omar, a custom cabinet maker.
Getting access to capital is difficult for many entrepreneurs in the United States. But with Kiva Zip and our lenders throughout the world, access to 0% interest capital is now a possibility for borrowers like Alfredo and Omar, using a trust-based approach that relies on trustees to vouch for the character of the borrower.
Trustees are organizations or individuals, like Ezequiel at the Gumball Foundation, who have standing relationships with the borrowers and can speak positively about the borrower’s integrity and the soundness of the business.
Alfredo's business has always been a customer-oriented, old fashion shoe cobbler service. Now he is seeking a $5,000 loan to improve machinery and displays, as well as expand his business into his passion of handmade leather goods.
Omar launched his new cabinetry business with the guidance of his farther, a carpenter with more than 25 years of experience. He quickly grew the company from two employees to ten personally-trained craftsmen! He needs a $5,000 loan to buy new machinery, purchase advertising, and increase wages to his team.
Ezequiel Olvera with his original gumball vending machine
LA Roots, Global Support
Alfredo and Omar's loans already have supporters from Los Angeles, across the United States, and from countries around the world, like Spain, Germany, Canada, Australia and Taiwan! These are all lenders who have read about Alfredo and Omar, believed in them and their businesses, and decided to support them through a loan. This really demonstrates the true beauty of global connectedness and the power of the Zip platform.
Alfredo and Omar's lenders around the world
One of the most unique aspects of the Kiva Zip platform is the ability for direct engagement. On Alfredo’s page, you’ll see a lively discussion about the art of crafting and repairing quality shoes, recommendations to replace a declining brand, and many words of encouragement. Alfredo even welcomes everyone to stop by his shop or send in his or her shoes for repair!
Conversation Tab from Alfredo's Kiva Zip Page
And last but absolutely not least, let's talk about PASSION. Kiva Zip actively focuses on financially excluded entrepreneurs and socially impactful businesses and a positive side effect of this is the truly passionate individuals it attracts.
Kiva, Kiva Zip, and these entrepreneurs throughout the world and in the United States have inspired me. During my first Kiva Fellowship in Kenya, I witnessed how access to capital and micro-capitalism can move people from subsistence to profitability, impacting equality, health, and education in profound ways. The experience was amazing, humbling, and life-changing. The fellowship was so amazing that I decided to extend it, which is how I ended up in Los Angeles.
Already I’m seeing the impact that an innovative model like Kiva Zip can drive. Something both progressive and touching happens with the right combination of technological innovation, integrity, and transparency.
I'm happy to be able to share more stories with you as I continue my Fellowship in LA!
Interested in supporting Alfredo or Omar ? Lend (as low as $5) today! They need to fundraise to 100% to get their much-needed 0% interest capital.
Remember, this is a loan, not a donation. Once you get your funds back, you are free to withdraw or re-invest in another great entrepreneur! If you're new to the Kiva Zip site, your loan will also be matched. That means, if you lend $50, it will be matched and contributed as $100! ...(continued)
Last month, the Kiva Zip Team made a house call to one of our current borrowers, Doniga, at her ranch. Nestled in the pristine hills overlooking the beach in Half Moon Bay, is the site of Markegard Family Grass Fed, LLC- an agricultural business owned and operated by Doniga and her husband, Eric- who happens to be a 6th generation cattle rancher. The land is about a 1000 acres and is leased from the regional park. The mission of their company is to provide communities in the San Mateo County with pastured, locally born, raised and processed meat and poultry products. All the cows, including the 3 used for their milk, are on a strict, grain-free and grass fed diet. The two main constraints for farmers like them are access to land and access to capital, the second of which Kiva Zip hopes to correct.
Despite the romantic and glamorously rugged nature of their cattle-rancher and farming lives, we were quick to learn that this was only about passion for them, and not the money. Living on a month-to-month basis, they turned to Kiva Zip's 0% interest rate loan as a way to strengthen their business venture, primarily through improving their conservation practices. They need to purchase and install waterlines to gravity feed water to the troughs on their land, which can save costs, increase the efficiency of grazing practices and lead to a weight gain in their cattle, not to mention building soil that retains water and preventing runoff to the ocean.
Endorsed by the TomKat Ranch for a loan of $5000, as I write this- Doniga has fully funded her loan and will begin the process of paying back throughout the next 3 months. This loan will go a long way in helping them through this drought, as well as setting a precedent for Kiva Zip's efforts in helping the agricultural community increase capacity and sustainability against the odds.
Alfredo is the owner of El Sereno Shoe Repair, a small business that has been family owned and operated in East LA for over 30 years and two generations. He’s a hardworking, old-fashioned shoe cobbler that’s dedicated to serving his community with exceptional quality and customer service.
Eighteen years ago, 11-year-old Ezequiel Olvera approached Alfredo with an ask. Ezequiel explained that he had invested in an old 10-cent gumball machine with the hope of making enough money to attend college. He asked Alfredo if he’d be willing to place the gumball machine in his shop. Alfredo agreed, but only on the condition that Ezequiel maintain good grades. Alfredo became a role model to Ezequiel, teaching him valuable lessons about business, accountability, and the value of an education.
El Sereno Shoe Repair: Family Owned & Operated in East LA for 30 Years (Left: Alfredo, Right: Alfredo, his family, and father)
Armed with an entrepreneurial spirit and profits from Alfredo’s store, Ezequiel was able to purchase an additional machine. Through hard work and unwavering dedication, his venture soon grew to over 50 gumball and vending machines across East Los Angeles, which he operated out of local businesses throughout the neighborhood.
The fruits of his labor included valuable business experience, lessons, and many ups and downs. Ezequiel learned the importance of understanding market demand by selling products based on customer demographics by site. For example, he quickly realized that pistachios sold better at the local auto parts store in comparison to candy. He perfected his sales pitch and learned to deal with rejection when business owners were opposed to housing his machines. He was forced to stay organized, keep his inventory stocked, collect money on a regular basis, fix broken machines, etc., etc., etc.
When Ezequiel graduated high school, he had saved profits of $15,000 from his business, and was able to obtain an academic scholarship to fund the remainder of his college tuition at UC Santa Cruz.
Today, Ezequiel aims to empower future generations with the ability to follow a path similar to his own. He created the Gumball Foundation, which engages middle and high school students in an extracurricular program that teaches creativity, entrepreneurship and social business acumen. Through the program, students run their own small-scale vending machine business as an educational tool, which gives them valuable hands-on experience, incentivizes them to attend college, and awards them with scholarships.
The Gumball Foundation has become one of LA’s most innovative new social ventures, and has recently received a variety of well-deserved recognition. They won the Annenberg Foundation Audience Award in 2011 at the LASVP Fast Pitch Competition. The Los Angeles Business Journal named them Social Enterprise of the Year for 2012. In 2013 they received an LA Emmy nomination and Ezequiel was recognized as an “Unsung Hero of Los Angeles” by the California Community Foundation and the Eisner Foundation. Alfredo’s pivotal role in the Gumball Foundation’s early origins was recently highlighted in a story covered by NBC and another by LatiNation.
I first came into contact with the Gumball Foundation while working to grow the reach of Kiva Zip in Los Angeles. I was primarily focused on finding new partner organizations referred to as Trustees, who are empowered with helping entrepreneurs access Kiva Zip loans by publicly vouching for their business concept and character. In response to the reality that thousands of small business loan applications are denied by banks on a daily basis, the Kiva Zip model aims to leverage community relationships in order to identify trustworthy, hardworking, financially excluded entrepreneurs who have the ability to use loan capital to sustainably grow their business.
Despite the fact that Ezequiel’s work is focused on students, Kiva Zip presented an opportunity for him to support local businesses in his community, many of whom were instrumental to his success by graciously housing his gumball machines as a kid.
It’s no surprise that the first business Ezequiel chose to endorse for a Kiva Zip loan was Alfredo’s El Sereno Shoe Repair .
Due to an absence of sufficient capital, Alfredo has struggled to grow revenue on a yearly basis. Ezequiel is endorsing Alfredo for a $5,000 loan, which will enable him to do the following:
Purchase raw materials to create an additional revenue stream through sales of hand-made leather goods
Acquire updated machinery to become more efficient
Add aesthetically pleasing entrance displays and shoe casings to attract new customers
Take advantage of discounts on essential supplies by paying in advance
Because of Alfredo’s helping hand, Ezequiel was able to gain momentum in his childhood venture, attend college, and start the Gumball Foundation, which has already provided over 50 students with college scholarships.
Things have truly come full circle, as Ezequiel now looks to support Alfredo by helping him access much needed loan capital through Kiva Zip.
Kiva Zip loans are given at 0% interest and crowdfunded online in $25 increments, which means anyone with an Internet connection can lend to borrowers like Alfredo.
Interested in lending to Alfredo? He needs your help! You can lend as little as $25 towards his loan by following this link to his Kiva Zip profile: https://zip.kiva.org/loans/2728/i/wn7 ...(continued)
When we launched Kiva Zip in late 2011, one of the hypotheses we wanted to test was to what extent social underwriting could complement, and even supersede, conventional financial underwriting in assessing businesses’ credit risk. Whether the strength of a borrower’s social network, relationships and character, could represent a better determinant of her repayment rate, than the strength of her FICO score, balance sheet and collateral.
To-date, this social underwriting has primarily been effected through the use of Kiva Zip trustees – organizations and individuals who vouch for the character of the borrowers they endorse on Kiva Zip, based on their relationships with them.
And while there have been many bumps along the road, and Kiva Zip’s repayment rate of 88% is certainly much lower than Kiva.org’s repayment rate of 99%, we have been very encouraged by the progress we have made over the last two years, and the results we have realized:
• We have now onboarded over 400 trustees across both Kenya and the United States, the vast majority of which have a repayment rate of 100%.
• Our U.S. data shows that when trustees have known borrowers for over a year, the repayment on these loans is 91%, compared to only 83% for borrowers that have known their trustee for less than a year.
• Thought leaders are starting to demonstrate excitement about, and commitment to, our innovations in the field of social underwriting. Speaking at our launch in Little Rock, Arkansas last year, Bill Clinton celebrated Kiva Zip's trustee model, saying “when someone vouches for you, your sense of obligation to repay the loan goes through the roof”.
As well as the concept of trustees, we’ve also seen social underwriting happening through the crowd. While we acknowledge that we cannot solely rely on the due diligence of our community of lenders, we strongly believe that there is wisdom in this crowd, and that having thousands of additional pairs of discerning eyes on a borrower’s loan request will lead to much better underwriting decisions than not having that additional due diligence check. And again, this belief is underpinned by the numbers. Looking at U.S. Kiva Zip loans, where there have been at least 50 lenders to a loan, the repayment rate has been 94%. This is compared to a repayment rate of 83% for loans with less than 50 lenders.
It could be that this difference in repayment rates is also partly caused by the increased social pressure on borrowers with a larger number of lenders to repay their loans – both in a negative sense, because borrowers do not want to let down such a large number of people who have put their trust in them; and in a positive sense, because borrowers want to keep this significant community of lenders engaged and motivated to support their business. Either way, it’s another encouraging affirmation of the concept of social underwriting.
But what is most exciting to us is that these elements of social underwriting, which we have been developing over the last two years, are only scratching the surface of this concept. The trustee model and the wisdom of the crowd idea have been social underwriting in black and white. The Private Loan Period that we’re rolling out in a concerted way over the coming months is social underwriting in high definition Technicolor.
The idea is that before a Kiva Zip borrower is listed on the public lend tab, they must first invite 15 lenders from among their own social network to lend to them. As you can read in the blog post linked to above, not only will this help us grow the number of lenders participating in the Kiva Zip community, but it also represents a significant increase in our emphasis on social underwriting as a tool for managing our risk. Conventional lenders take assets (houses, cars, machinery, etc.) as collateral on the loans they make. Kiva Zip doesn’t take collateral of this kind. But for borrowers that go through this Private Loan Period, we take social collateral, in the form of the money that the borrower’s own friends and family lend to them, through the Kiva Zip platform. Given that every small business owner needs to be able to “hustle” to ensure that their nascent business recruits customers and grows, we also believe that requiring borrowers to demonstrate this entrepreneurial spirit, by persuading a small proportion of their social network to fund their Kiva Zip loan, is an excellent criterion for the assessment of a borrower’s creditworthiness.
As we only disbursed our first “Private” loans in December, it’s too early to evaluate the effectiveness of this feature yet, but the data we do have is very encouraging:
• Where U.S. Kiva Zip borrowers have invited at least 10 people to fund their loans, our repayment rate is 99%, compared to 87% for borrowers that have invited 9 or less.
• Borrowers that have invited 5 or more lenders have a repayment rate of 96%, compared to 86% for borrowers that have invited 4 or less.
• And even 1 invited lender makes a difference. The repayment rate for borrowers that have invited at least 1 lender is 90%, compared to 85% for borrowers that have not invited anyone.
Over the next few months, we’ll be starting to put every U.S. Kiva Zip loan through a Private Loan Period. There will be some friction, as we strive to clearly communicate this policy change to trustees, borrowers and lenders, but we’re very confident in the benefits of this approach for the long-term sustainability and growth of the Kiva Zip program, and so we’re excited to commit to it in a wholehearted way.
At first we’re rolling this feature out in the U.S. only, but in the future we imagine its adoption in Kenya too – perhaps we will require Kenyan borrowers to get 15 people in their network to send us an SMS vouching for their character; or perhaps we will start enabling Kenyans to lend on Kiva Zip using M-PESA, as well as borrow money in this manner.
At Kiva, we aspire to ascribe more value to human relationships than financial transactions. Where banks are reluctant to risk lending $5,000 to a small business owner who lacks traditional collateral, and doesn’t have an established FICO score; we see a crowd of generous lenders being willing to risk $5 to give that same small business owner a chance, based on the social collateral that they demonstrated in persuading 15 people in their network to fund their loan, and the long-standing relationship that they have with their trustee. Where borrowers feel emotionally uncompelled to repay an impersonal financial institution that only communicates with them in stern, critical words; we see those same borrowers committing to repay the community of hundreds of lenders that put their $5 of trust in them, and became their customers, business advisers and supporters. A hundred years ago, banking was built on the foundations of relationships between banks and their customers. Now imagine a financial system that marries those human connections and relationships, with the power of twenty-first-century technology to expand access and reduce costs and interest rates. We’re on an extremely long, uphill, winding road with this Kiva Zip program. But that’s where it’s headed.
Last week Kiva Zip created a Twitter account. We are more than excited to finally join the social media world and communicate with our trustee, borrower and lender bases via this medium.
What to expect:
Our goal for Twitter is to keep followers updated on loans posted to Kiva Zip and borrower and trustee activities in general. We will include updates and news surrounding the world of micro-finance and person to person lending and keep followers connected to our fellows in the field.
This year we have a total of 16 fellows in 12 cities to help expand the Kiva Zip family and they will be keeping us updated on their adventures via Twitter and various other social media outlets.
Benefits to the Zip community:
We see social media as a mutually beneficial tool. Not only can we update our community we can help borrowers spread the word about their business endeavors, possibly convert lenders into customers, fund loans faster, and give Trustees another way to showcase the impact they are making in their communities.
This is a huge opportunity for us to engage with our community at all points during the funding process and we are excited to see more loans, more lenders, and more goals being reached!
In the meantime follow us @kivazip and see what we’ve been up to! ...(continued)
This week we’re rolling out $5 loan shares for ALL Kiva Zip users. And we’re really excited about it.
This means that all lenders will be able to make loans on Kiva Zip starting at $5, rather than $25.
Some lenders will have noticed that over the last six months, we have been running a trial whereby 50% of lenders have been able to make loans for $5, and 50% of lenders kept the $25 loan shares that Kiva has used since its inception. We aspire to make data-based decisions on the Kiva Zip team, and this trial was a great example of that approach. We wondered whether $5 loan shares might encourage more lenders to try out Kiva Zip for the first time, but we also feared that if we allowed lenders to participate in much smaller amounts, the total amount of money loaned would fall, limiting the number of hard-working entrepreneurs that we could support through Kiva Zip.
Six months later, the results are in, and we’re ready to make a decision. So what did we see?
New user conversion. It’s basic economics that as the “price” of something is reduced, the “volume purchased” increases, and we saw that over the last six months. For the time period analyzed, 6,231 new lenders made their first loan having seen $5 loan shares, compared to only 3,827 new lenders who saw $25 loan shares. This represents a 63% increase in new user conversion. Given Kiva Zip is a new pilot program actively seeking out new lenders to participate, this improvement in new user conversion is hugely important for us.
$ per share. Unsurprisingly, the amount loaned per share was much lower for lenders who saw $5 shares ($15.62), than for those that saw $25 shares ($32.83).
# of shares per lender. But the number of shares purchased was significantly higher for $5 lenders (3.0) than for $25 lenders (2.2).
Total $ loaned. Putting all of these three metrics together, we found that the total dollars loaned was very slightly (0.9%) lower for the $5 group, compared to the $25 group.
Total $ deposited. The picture for total dollars deposited (a metric which is more indicative of the long-term sustainability of the program) was slightly worse (by 4.7%) for the $5 group.
Total # of shares purchased. The higher number of users to lend, and the higher number of shares per user meant that more than double the number of shares were purchased by lenders in the $5 group, than lenders in the $25 group.
Looking at all these metrics together, it was not a straightforward decision. It looked like moving to $5 loan shares would result in more lenders connecting with more borrowers; but slightly reduce the total dollars loaned on Kiva Zip, especially in the long term.
But Kiva’s mission is “to connect people through lending to alleviate poverty”. And in transitioning to $5 loan shares, we decided to place more value on the connections that we are creating between borrowers and their lenders, than the total amount of dollars loaned. That’s more potential customers, business advisors, brand ambassadors and emotional supporters for borrowers, who have told us that they value these connections and supporters even more than they value the 0% interest capital we enable them to access.
With this decision, as a program, and as a team, we are choosing social capital over financial capital. ...(continued)
This week we defaulted our first Kiva Zip loans.
We classify defaulted loans as those for which we have not received any repayments in the last 180 days. While it is still technically possible to recover funds on these loans, the chances are very low. If any funds are recovered, they will be passed on to the lenders who lent money to the specific loan.
We will be defaulting 77 loans in total this week – 62 in Kenya, out of a total of 1,673 loans disbursed to-date (3.7%) and 15 in the U.S., out of a total of 486 disbursed to-date (3.1%).
The conversations tab on these loans will be closed, and the loans will be displayed as “Defaulted” to lenders on these loans. To Kiva Zip users that are not associated with these loans, the loan will be marked as “Ended”. These ‘defaulted’ borrowers will never again be able to access 0% interest capital via the Kiva Zip platform.
While we hope that lenders will appreciate the added clarity that this move provides, it is obviously deeply disappointing to us that some Kiva Zip borrowers choose not to honor the commitments they made to repay their lenders.
To this point, some lenders have recently been asking very valid questions of our customer service team about defaulting and delinquent loans on Kiva Zip. For example, lenders who are used to near-100% repayment rates on Kiva.org are voicing concerns that a much higher proportion of their Kiva Zip loans are in jeopardy of non-repayment.
We acknowledge these concerns, and we are working to increase Kiva Zip’s repayment rate, especially in the United States, where it is currently at 87.1% – both in terms of borrower selection, and repayment management.
Having said that, we also want to very clearly communicate that Kiva Zip should be seen as more risky than the regular Kiva.org platform, for two principal reasons:
1. Kiva Zip remains a very young and pilot platform
Whereas most of Kiva’s MFI partners have many years of experience in underwriting and risk management, our 8-person team is grappling with these problems, and learning these lessons for the first time. We’ve made some great progress over the last two years – for example, instituting borrower credit ladders, trustee portfolio limits, requiring some U.S. borrowers to invite a number of their network to lend to them, etc. But we still have many lessons to learn, and risks to identify and mitigate.
2. Our model is based on technology, rather than a boots-on-the-ground presence
We believe that this model has great potential benefits. For example, with respect to scale, the average U.S. MFI disbursed 24 loansper loan officer in 2011. The closest corresponding comparison for Kiva Zip was around 200. This technology-led approach is also how we can extend loans to entrepreneurs at 0% interest, and connect our borrowers with our community of lenders. But one of the long-term constraints of a technology-based model might be that, even once we have many more years of individual-borrower-level risk management experience under our belts, Kiva Zip repayment rates cannot match those of Kiva.org’s MFI field partners.
We have tried to communicate Kiva Zip’s increased level of risk throughout the lender experience – for example, we display our repayment rate, for both the U.S. and Kenya, prominently on our homepage. We hope that, even fully understanding these risks, Kiva Zip lenders continue to increase their participation in this pilot program, because they genuinely value the closer connections to entrepreneurs that we hope our technology-based approach can provide.
We have tried to communicate Kiva Zip’s increased level of risk throughout the lender experience – for example, we display our repayment rate, for both the U.S. and Kenya, prominently on our homepage. We hope that, even fully understanding these risks, Kiva Zip lenders continue to increase their participation in this pilot program, because they genuinely value the closer connections to entrepreneurs that we hope our technology-based approach can provide. ...(continued)
Maria Gavidia is a small business owner in Boston. Through her bakery Bella Cakes, Maria sells traditional Peruvian fruitcakes with her own personal twist. “I dream of growing Bella Cakes,“ Maria said. “I envision Bella Cakes being a source of employment for my community because I understand the importance of having access to work in order to raise a family. I want the Bella Cakes stores to employ at least 100 individuals.”
Pictured: Maria, Owner of Bella Cakes
But when, like Maria, you have few financial resources, starting or growing a business is not easy. The underwriting criteria used by most financial institutions prevent creditworthy low-income families from accessing loans. In determining the credit worthiness of a borrower, banks typically require high FICO scores, relatively high net worth, and/or posting of collateral. Unfortunately, many low-income families do not meet these criteria. Without access to traditional bank loans, payday lenders are one of the few options families have to access capital.
The Family Independence Initiative (FII) is a national organization working to strengthen economic and social mobility for low-income families. Through our work in San Francisco and Boston, FII has partnered with many families who are starting or growing small business to support their families and strengthen their communities by creating job opportunities.
Of the 400 households in Boston and San Francisco with which FII has partnered since 2007, about a quarter have started or expanded their small business. These businesses include house cleaning services, hair salons, food and catering services, childcare centers, etc. Collectively these families have generated about 120 jobs for themselves and individuals from their communities. Most of them started these businesses without the support of traditional lending institutions or investors. Instead they have relied on their own savings along with support from friends and family.
It’s clear that these small businesses have the potential to employ hundreds of people if they can access the investments necessary to grow. So FII is demonstrating that many low-income families, like Maria’s, are indeed good investments.
Our role as a Kiva Zip Trustee allows families to help prove this point by leveraging the social capital embedded in the peer-to-peer approach. Maria was able to raise $3,500 to expand the storefront of her Bella Cakes. This allowed her to have more space to display her cakes and other products, have a customer service area for her catering business, and install new baking equipment. But the impact goes beyond expanding the physical space of her store. She is now able to employ five full-time employees moving her one step closer to her vision.
Pictured: Lucy, Founder of Michel's Designs
Pictured: Jolly, Lactation counselor and nightnurse
This blog post was written with the help of Chinwe Onyeagoro, Co-Founder & CEO of FundWell.
Kiva Zip, a pilot program run by non-profit Kiva.org, provides small, crowd-funded business loans to financially excluded entrepreneurs in the United States and Kenya. Kiva Zip employs a model of “trust-based underwriting” so that small business owners can achieve social impact in their local economy. Read about some of those achievements in 2013 here!
In 2014, Kiva Zip aims to expand its program by growing the number of borrowers who access these interest-free loans. To do so, we will partner with like-minded organizations that can introduce us to new entrepreneurs who could benefit from our platform. Kiva Zip’s newest partner in this arena is FundWell.
FundWell is a small business loan-matching and financial wellness website that helps match borrowers in the United States with lenders, educates them about the right loan product, helps them prepare and submit loan applications, and improves their financial wellness and fundability in order to access more capital at lower interest rates over time.
After borrowers complete the FundWell Scorecard, they will receive a list of lender referrals based on their “fundability”, and Kiva Zip is now a "funding option" for qualified borrowers (see a sample scorecard with other possible funding options here).
Kiva Zip intends to give our borrowers the best opportunity to succeed and, since we only provide one piece of the puzzle (capital), we look to connect borrowers with additional resources that can help their business.
In addition to free technical assistance providers like Small Business Development Centers (SBDC's) and SCORE advising, resources like FundWell can equip our borrowers with the support they need to graduate from Kiva Zip to larger sources of capital and financial independence.
"Kiva Zip's partnership with FundWell allows all Kiva Zip borrowers the tools and resources invaluable to their continued success," states Justin Renfro, Associate Manager of Business Development at Kiva Zip. "It's our hope that with FundWell we can graduate entrepreneurs to bigger loans that will drive their businesses forward."
FundWell also provides qualified site visitors that select the No-Interest Loan Offer with a FREE Financial Wellness Program service for 6 months. The Financial Wellness Program includes loan application preparation assistance, financial wellness tips and advice, and a financial wellness action plan. See a sample financial wellness plan at How it Works.
Many of FundWell’s tips are easy and quick to implement. For example, one way to help improve your credit score is to decrease the outstanding balance on your revolving debt (i.e., credit cards) down to 25% of the total available credit limit. To learn more visit http://www.thefundwell.com/credit-tips/
FundWell recently assisted Kelly O’Brien, founder of Ideaction Corps, a full service, Chicago-based social change consulting agency, in acquiring funding and providing financial and strategic advice to help her develop her business.
“It would be an understatement to say that FundWell was helpful," adds Kelly O'Brien, Founder of Ideaction Corps. "They became my partner -- linking me to financing, strategic advice, business contacts and even providing encouragement and moral support. Connecting with FundWell has been one of the smartest business decisions I’ve made since founding Ideaction Corps. I’m grateful, and look forward to sharing progress and success with them!”
Kiva Zip is excited to meet entrepreneurs just like Kelly and to expand access to capital to small business owners with the help of FundWell! ...(continued)
Kiva Zip relies heavily on the contribution of its growing lender base to fund the increasing number of borrowers featured on our website. For that reason, we often direct you to make a loan! But are you looking for other, no cost, ways to get involved? If you share our mission of providing access to capital to the socially impactful but financially excluded entrepreneurs in the United States and Kenya, here are 10 ideas:
1. Help us bring Kiva Zip to a new city. We are looking to expand our presence in the United States! If you or an individual/organization you know might make a good Trustee, email us at ContactZip@kiva.org. We have held Kiva City launches in Newark, Little Rock, Portland, Richmond, and Flint. Could your city be next?
3. Refer an entrepreneur to apply for a Kiva Zip loan. Have him/her email us at ContactZip@kiva.org to get started!
4. Share our borrowers' stories on social media. Use the Share buttons on the Kiva Zip home page or borrower profiles to share on Facebook, Twitter, Google Plus, and more.
5. Invite your friends to register with Kiva Zip. Get started at zip.kiva.org!
6. Start a conversation. If you have already made a loan, contribute to the Conversation Tab by asking the borrower or Trustee a question or by sending your well wishes.
7. Volunteer with Kiva. Apply here to become a Kiva Fellow and mention your interest in teaming up with Kiva Zip!
8. Write a blog post to be featured on Kiva Zip's blog regaling your experience as a lender, borrower, or Trustee. Read our most recent posts and add your comments here!
9. Join the Kiva Zip Lending Team on Kiva.org. Use this forum to discuss Kiva Zip with other lenders.
10. Give your feedback about the Kiva Zip platform to the Kiva Zip Team. Email us at ContactZip@kiva.org. ...(continued)
Kiva Zip is an innovative pilot program created by Kiva that uses mobile and electronic payment technology to enable direct, 0% interest loans to financially excluded and socially impactful entrepreneurs. The loans are crowd-funded on Kiva Zip’s website, where anyone with an Internet connection can lend as little as $25 to a borrower of his or her choice.
One of the principal aims of the program is to expand access to capital. Everyday, thousands of small business loan applications are denied by lending institutions. In contrast to traditional banks, Kiva Zip loans are made based on character and trust, rather than credit score or collateral.
In the U.S. there are millions of community-based organizations like economic development centers, technical assistance providers, non-profits, startup incubators, veteran groups, churches, local businesses, etc. who have pre-existing relationships with entrepreneurs in need of loan capital. The Kiva Zip model aims to leverage those relationships by enabling organizations to become Kiva Zip Trustees. As a Trustee, organizations are empowered to help entrepreneurs access Kiva Zip loans by publicly vouching for their character and business concept.
In September I became the first Kiva Zip Fellow to be placed in Los Angeles, with the primary purpose of growing the program’s reach through finding new Trustees. In the past few months, I’ve met with over 50 organizations and have spoken with hundreds of inspirational people who all share a common goal - to better people’s lives and improve local communities.
Through my experience, I’ve become privy to the fact that LA is home to a significant number of incredible, socially impactful organizations. I’m confident that Kiva Zip has the ability to make a catalytic difference in the region and seamlessly complement the great work many people are already doing.
Here is a glimpse into some of the relationships we are currently forming in Los Angeles!
LA Food Policy Council
One of the primary goals of the LA Food Policy Council (LAFPC) is to expand access to healthy food in low-income, underserved neighborhoods where healthy food options are scarce. The Community Market Conversion program is a project of theirs that helps neighborhood market owners access the resources they need to become successful healthy food retailers in their community.
Kiva Zip loans will assist owners transform their stores into healthy food markets by enabling them to pay for things like new refrigeration systems, internal re-modeling work, inventory, updated signage for branding, and much more.
The Gumball Foundation engages middle and high school students in an extracurricular program that teaches entrepreneurship and social business. Through the program, students run their own small-scale vending machine business, which gives them valuable hands-on experience, incentivizes them to attend college, and awards them with scholarships. Founder Ezequiel Olvera paid for a significant amount of his college tuition through savings from his personal gumball machine business as a kid, and aims to help others do the same through his social venture.
Ezequiel has strong ties to and deeply cares about his community. He is becoming a Trustee to help local small businesses access Kiva Zip loans, some of which were home to his original gumball machines!
LA BusinessSource Centers
The nine Los Angeles BusinessSource Centers provide startup ventures and current small business owners various cost effective tools to make their business a success. They offer many services, including one-on-one consulting, assistance with business plan development, technical assistance with small business financing, educational business courses, and more - most of which are at zero or minimal cost.
The centers will use Kiva Zip as an additional loan product offering to help increase access to capital for entrepreneurs with whom they work.
RISE Financial Pathways
RISE is a non-profit Community Development Financial Institution that provides comprehensive and innovative ways to build wealth for historically underserved residents and small business owners in neighborhoods primarily ranging from South LA to East LA.
As a Kiva Zip Trustee, they intend to expand access to capital to aspiring entrepreneurs and small business owners that aim to make a social impact and bring economic vitality to their neighborhood.
626 Night Market
The 626 Night Market is the largest Asian night market in the U.S., featuring over 150 local restaurants, food vendors, entrepreneurs, merchandise vendors, artists, musicians, and non-profit groups. Night markets are a staple in Asian societies, and the 626 Night Market has successfully brought the energy and spirit of these markets to Southern California.
The 626 organizers view the market as a venue for entrepreneurs to test and develop new ideas. They intend to help participating vendors access Kiva Zip loans if they’ve demonstrated a commitment to quality products and customer service.
USC & Homeboy Industries
Chino is a Kiva Zip borrower in Los Angeles who recently received a $2,500 loan to start a hot dog vending business. Chino had a rough start in life and was in and out of prison at a young age. He has been at Homeboy Industries for three years, an organization that provides hope, training, and support to formerly gang-involved and previously incarcerated men and women. Chino credits Homeboy Industries with giving him a second chance in life and shaping him into the person he is today.
The USC Microfinance and Business Brigade is a student club that is currently assisting Chino with strategy and advice as he looks to grow his new business. As a Kiva Zip Trustee, they’ll be able to help future entrepreneurs with whom they work from Homeboy Industries access loan capital for their businesses.
The City of LA
San Francisco and Oakland recently became the first cities to officially sign-on as Kiva Zip Trustees. We are currently in talks with the City of Los Angeles to follow suit and look forward to the positive impact it would have on the economic development landscape of Southern California.
Beyond positive social impact, Kiva Zip is all about cultivating community, and the best part is – everyone has the ability to get involved!
Want to support an entrepreneur by making a $25 loan? Click HERE to view all Kiva Zip loans currently fundraising.
Interested in becoming a Kiva Zip Trustee? Click HERE to learn more.
Interested in becoming a Kiva Zip Borrower? Click HERE to learn more. ...(continued)
This is a joint blog post written with the help of Courtney Klein, Co-Founder & CEO of SEED SPOT.
Imagine being part of a community of social entrepreneurs who are launching new products, services, or technologies to improve the human condition. Imagine going through a rigorous 16-week program designed to test your assumptions, validate your business model, and accelerate your progress. Then imagine being surrounded by mentors, experts, and advisors on a weekly basis who care deeply about your success. On top of all of that, imagine having access to capital opportunities to secure funding for your venture.
Those are just a few of the beneficial services of SEED SPOT, an incubator focused on supporting social entrepreneurs. Since its launch, SEED SPOT has supported over 100 entrepreneurial ventures and, since 2012, SEED SPOT has been endorsing entrepreneurs on Kiva Zip.
Entrepreneurs need a solid business model and a real plan for attracting, keeping, and growing customers. SEED SPOT works exclusively with entrepreneurs developing a product, service, or technology that tackles a major human, environmental, or social problem. Through a rigorous 16-week program, SEED SPOT entrepreneurs are challenged to dive deep and ensure that they have a strong value proposition, customer validation, confidence in revenue streams and pricing, a strong business model, a solid understanding of capital requirements and how to raise them, and confidence in pitching their venture to donors or investors.
One of the major challenges for early stage ideas is capital. "Kiva Zip is an incredible place for entrepreneurs to secure early stage funding at 0% interest," states Courtney Klein, Co-Founder and CEO of SEED SPOT, "But Kiva Zip does more than that. It is a hub of inspiration. It draws in a community of believers. Entrepreneurs need inspiration, capital, support, and community to bring their dreams to life."
SEED SPOT has endorsed several borrowers as a Kiva Zip Trustee, including Robert at Paper Clouds Apparel. Robert used his $5,000 loan to spread awareness about his company, a nonprofit that raises funds for special needs schools and organizations while showcasing the creative minds and artistic abilities of individuals with special needs.
SEED SPOT also endorsed Derrick at Boogüd. Derrick used his $5,000 loan to buy equipment for his bamboo bicycles company. With every sale of a bamboo bicycle, Boogüd donates a handcycle to disabled child in need.
Now through January 24th, SEED SPOT is looking for the top 12 social entrepreneurs in the country to run through their Spring 2014 program. SEED SPOT is headquartered in Phoenix, Arizona but has the technology in place to support entrepreneurs anywhere in the world. As a nonprofit, SEED SPOT charges a nominal flat fee and does not take equity in the ventures selected for their program.
Read more, hear from SEED SPOT alumni, and apply online by January 24th at: http://seedspot.org/apply/.
In January of 2009 the “One Million Dollar Team” on Kiva.org was formed to show 7th grade Social Studies students that there is a world outside of their classroom in New Holland, PA. I set a goal of loaning $1,000,000 to entrepreneurs all over the world before I retire. The hope is to show my students that even they, at 12 and 13 years old, can change the world and make a huge difference towards ending world poverty.
I was initially inspired years ago by the movie “Pay It Forward” where the teacher, Kevin Spacey, challenges his 7th grade students to “Think of an idea that will change the world and put it into action.” Five years into my teaching career I was introduced to Kiva by an old high school friend via email and I realized that it fit perfectly into my idea of implementing a service project into my classroom.
It was easy to start, easy to maintain, and most importantly it was economically sustainable, which is something that is unheard of in our world today. Where else can you use the same money over and over again to help more and more people as it gets paid back? This is the advantage of investing in people - in their hopes, in their lives, and in their dreams – they are so appreciative of your help that they want you to be able to help others so it grows exponentially.
Since launching our school’s Kiva initiative 5 years ago, my students have raised over $10,000 helping over 3,000 families in 69 different countries around the world. We have loaned over $75,000 thanks to the fundraising they have done through bake sales, luminary sales at Christmas, jewelry sales, and other entrepreneurial ventures. It’s awesome to see kids become entrepreneurs to help other entrepreneurs better their lives. They have the chance to go onto the computer and choose to whom we lend, and we put the loans through right there live in class. We are able to do at least 60 loans every month with the money that we have already loaned out as it gets paid back.
It shows the students first-hand the lesson that Muhammad Yunus learned in 1976 when he gave $27 to 42 women ($.64 / woman) who had nothing - no collateral, no hope – and they used that little money to better their lives and paid him back. That important lesson was that if you give the poor a chance, those that truly want to help themselves, they will be so thankful that they will do everything they can to pay you back. This explains the incredible repayment rate that Kiva lenders experience.
A huge turning point for my classroom came in 2013, when Kiva launched Kiva U with the goal of getting Kiva used in classrooms. Since my classroom had been doing it successfully for 5 years, we were honored to be featured in their video campaign with our “Eternal Impact” video to encourage other schools and teachers to take on this worthwhile program. If the idea of teaching kids the importance of helping people help themselves spreads across the world, imagine the power of a movement of millions of children and schools helping others and working towards ending world poverty or whatever cause they choose.
So, naturally, when I learned that Kiva was launching another new initiative called Kiva Zip with the goal of specifically helping people in the U.S. and Kenya, I wanted to check it out. What makes Kiva Zip so incredible is that it allows the lenders like my students and I to have online communication capabilities with the people we are helping. This is a perfect fit for my classroom. It is a great way for my students to have access to so many entrepreneurs and creative minds from all over this country and in Kenya so that they can ask questions and learn first-hand from them.
We have done over 50 loans so far to people through Kiva Zip and have really enjoyed communicating with them and having the opportunity to ask questions and learn more about what it takes to become a business owner. My hope is that it inspires my students to not only think globally, but to be open to and aware of the challenges business owners face on a daily basis. The fact is that small businesses are the backbone of the small towns and big cities that we live in and the American economy as a whole. If we can help support people here in the U.S. and in Kenya build their businesses, they can in turn hire others - and that is what gets people out of dependency and onto the road to prosperity.
I try my best to instill in my students the understanding that the secret to eliminating poverty is to help someone produce more than they need to simply survive. By doing $25 micro loans, whether through Kiva or Kiva Zip, we are doing just that. I truly believe from the bottom of my heart that micro-lending is the key to eliminating world poverty and getting people on the path toward financial stability and economic independence. I don’t want to just tell my students that someday they can make a positive difference in the world and truly change it for the better; I want them to realize that they already are. The fact is, I want everyone to realize that their dream of a better world can be a reality. ...(continued)
We at Kiva Zip have high hopes for changing the way financially excluded and socially impactful small business owners are able to secure the capital they need to be successful. With the holidays upon us, we want to share the impact you have helped us create in the United States and Kenya over the past year. Thank you for contributing to a great 2013! We look forward to sharing new accomplishments with you in 2014.
Impact at a Glance: United States
Since the beginning of the year, 15,558 lenders from all over the world have lent $1,663,705 to 410 entrepreneurs with the help of 270 Trustees in 40 states, and the borrowers have maintained a repayment rate of 87%.
- We launched Kiva Zip in Richmond, Little Rock, Portland, and Newark.
- The City of Oakland and City of San Francisco became Trustees.
- Forbes announced Kiva Zip's partnership with Etsy.
Impact at a Glance: Kenya
Since the beginning of the year, 1,353 lenders from all over the world have lent 14,675,199 KSh / $185,150 to 1,044 entrepreneurs with the help of 98 Trustees, and the borrowers have maintained a repayment rate of 93%.
- Kiva Zip partnered with Kopo Kopo to make loan disbursal easier and safer for borrowers in Kenya.
- Kiva Zip disbursed its 1,000th Kenyan loan.
Chris raised $10,000 with the help of 126 lenders as part of our Little Rock Kiva City launch in March. His business Little Rock Urban Farming has a new vision for agriculture in Arkansas. They are actively engaging their community about the need to address public health with sustainable agriculture.
Robert raised $5,000 with the help of 27 lenders for marketing his company Paper Clouds Apparel, a company that showcases the creative minds and artistic abilities of individuals with special needs while raising funds to provide financial support for special needs schools and organizations through the production of t-shirts, totes, and hats.
Michael used his second Kiva Zip loan to create a new product line for his business Takawiri Initiative. Takawiri produces paper from water hyacinth, which is a noxious weed found in Lake Victoria. They clean the lake and also make beautiful handmade paper products. In addition, his business aims to provide youth with an opportunity to make money instead of relying on aid.
Pamela used her fourth Kiva Zip loan to purchase additional products and materials for her store. Her business Pam Curios sells a greater variety of products to tourists and locals after having used her previous Kiva Zip loans to grow her inventory. She sells clutch purses, kanga earrings, and woolen mats, among other products, and now has enough income to pay fees for her two children in high school.
What's in Store for 2014
We plan to continue our momentum into 2014. Our primary goal is to serve more financially excluded and socially impactful entrepreneurs, as we have begun to do in the United States and Kenya. Scaling our program will remain a focus for us in the new year. "We are working on developing relationships with other organizations that will help us reach our aggressive targets in 2014," states Justin Renfro, Associate Manager of Business Development.
In addition, we will release improvements to the Kiva Zip website. "We have a lot of exciting plans for 2014," says Kiva Zip Product Manager Daniel Jung. "We want to make Kiva Zip easier to use for all parties involved. That's a priority for us."
Finally, we will continue to test the products we offer borrowers. "In 2014 we plan to shift our risk management philosophy even further away from conventional financial metrics," states Jonny Price, Senior Director of Kiva Zip, "and even closer towards character assessment, social networks and relationships. Imagine more borrowers being asked to activate their own friends and family to make a loan to them -- that's great for spreading the word about Kiva to new lenders, and it's also great for our repayment rate."
Together, we can achieve these goals. Here's how you can help:
- If you know an entrepreneur who could benefit from Kiva Zip, please tell him/her to email us at ContactZip@kiva.org.
- Lend to the entrepreneurs currently fundraising here!
- Send us your feedback and product suggestions to ContactZip@kiva.org.
Two of the key hypotheses we are looking to validate with the Kiva Zip program are (1) whether social data can complement conventional financial underwriting in the assessment of borrowers’ creditworthiness, and (2) whether borrowers can help us grow our impact, by recruiting new lenders to experience the magic of lending on Kiva. Our hope is that when these lenders are repaid by the borrower that invited them to fund their own loan, some of them might go on to lend to other Kiva borrowers, perhaps in different countries. We’re really excited about how a new feature we’re rolling out for some borrowers in the U.S. over the coming weeks will help us explore both those hypotheses.
We’re calling it a “Private Loan Period”, and it works as follows: For certain U.S. borrowers, before they are posted to the public lend tab visible to all Kiva Zip lenders, a certain number of lenders will be required to fund their loan privately, by arriving directly at their loan page. Loans under $2,500 will be required to “recruit” seven lenders, and loans over $2,500 will be required to recruit fifteen lenders.
There are a number of ways in which lenders can fund these private loans. For example, the borrower could email the link to their loan page to their friends and family, or share it on social media; the borrower’s Trustee could promote it to their networks; or the borrower might even get some local media coverage that can drive potential lenders to their loan.
However they do it, the important thing is that the borrowers (and Trustees) have to “pay it forward” by helping spread the word about Kiva and growing the community of lenders before they can enjoy the benefits of a 0% interest loan and a million potential customers and brand ambassadors, which Kiva can uniquely provide.
The early data we’ve collected over the last year is encouraging. Not only have Kiva Zip borrowers and Trustees invited over 1,300 new lenders (who have loaned almost $150,000) to try Kiva for the first time, but (and this is the really cool part) borrowers who have invited at least 5 lenders to fund their loans have a repayment rate of 95%, compared to only 85% for borrowers who have invited 4 lenders or fewer.
“Leveraging social bonds to boost microfinance repayment rates”. Sound familiar? We’re hoping that combining the principles that Mohammad Yunus pioneered in Bangladesh with the cost-crushing, exponential power of the internet could have explosive implications for how otherwise-financially-excluded entrepreneurs access capital to invest in their businesses. Think Grameen 2.0.
We’re still figuring out which borrowers will be required to undergo a private loan period. Should borrowers of established Trustees, who have proven repayment rates over time, be exempted? Should more financially excluded borrowers be required to invite fewer new lenders to fund them? Should we base the “hurdle rate” on number of lenders alone, or also consider the total amount loaned? If you have any ideas on how we should implement this feature, we would love to hear them below, or in the ContactZip@kiva.org inbox.
Jennifer, the proud owner of Small Hand Foods in Oakland, is the perfect example of this feature in action. Through the promotion of her “private” Kiva Zip loan page to her own social network, she reached her goal of fifteen lenders in only a couple of days. These lenders loaned over $2,000 to Jennifer (an impressive demonstration of their faith in her character), and this $2,000 was matched by a generous family foundation in San Francisco. Jennifer’s loan was then automatically posted to the public Kiva lend tab, and since then another 23 lenders have helped her towards her goal.
Jennifer posted a comment on her conversation tab recently, saying: “Thank you all so much! I am completely honored at the outpouring of support for my business. Our loan request has been live for only four days, and we're already 87% funded! Every day when I see the increasing numbers of people supporting me I am awed and humbled. Thank you thank you!”.
But for helping us to grow Kiva’s impact by getting the word out to her friends and family about our program, and how lenders can help support the dreams of entrepreneurs around the world with interest-free crowdfunded microloans, it’s we on the Kiva team that should be thanking Jennifer. ...(continued)
This is a joint blog post by Shelly Dax, Kiva Zip Borrower, and Shawn Winkler-Rios, Executive Director of eDev, a Kiva Zip Trustee.
Kiva Zip seeks to help entrepreneurs in many different fields launch and grow their businesses in the United States and Kenya. The Kiva Zip model is made possible through the help of Trustees, individuals or organizations that identify and vouch for the character of potential borrowers.
Borrowers come from all walks of life, and the purposes of their business loans vary; however, we have have found that Trustees that work in economic development, technical assistance, or small business advising are most successful in identifying and supporting Kiva Zip borrowers. Kiva Zip fits well with their organizational mission - through their endorsement of a borrower, they create a positive social impact in their communities.
eDev Entrepreneurial Development Services is one such Trustee. Located in Eugene, Oregon, eDev is a nonprofit microenterprise development organization that helps individuals who want to start a small business or build an existing business through training, technical assistance, and access to capital.
"eDev is very excited to be a Trustee of Kiva Zip and the potential for low-income and startup micro enterprises to access capital," says Shawn Winkler-Rios, Executive Director of eDev. "We see this as the future of micro lending!”
"The field of tattooing has long been considered a 'sub-art' category or seen not as worthy to be labeled art," says Shelly. "Opinions over tattoos range from avid collector to downright hatred. Over the last 15 or so years, this consciousness has been shifting, and tattooers have pushed the limits as to the mastery of this craft.
The unique media of skin as canvas increases the difficulty, and the exposure to body fluids, health issues, and strict laws and rules demand a specific training not required by other art fields. And yet, there are many people tattooing 'under the table' without benefit of education. The small amount of books specifically geared to tattoo education are sketchy, poorly written, hastily illustrated and unprofessional. I, being a tattoo instructor, writer and graphic artist, am in a unique position to create a solid, comprehensive textbook."
Shelly first became involved with eDev when she opened her tattoo shop over 8 years ago, and she took a series of business development classes and got her first Individual Development Account (IDA). "Executive Director Shawn Winkler-Rios has been an enormous help to me over the years," states Shelly, "from helping me develop a business plan to teaching me about marketing and financial statements. He was there every step along the way to answer my questions and assist me during the economic downturn. I don’t believe I would be in business if it was not for eDev’s help."
"We have worked with Shelly for many years, and she has worked hard to build her business," adds Mr. Winkler-Rios. "Shelly is an artist and a professional. She has always offered great customer experiences in her work. This loan is an investment into her future business and the great experiences she will offer students and customers.”
It has been, quite literally, a very 'eventful' week for this fellow.
On Tuesday, I attended the first ever Giving Tuesday 'Jamathon' organized by Full Circle Fund. Kiva was one of seven Bay Area non-profits selected for the competition, and our team consisted of my manager Justin Renfro, four members of Full Circle Fund who have been designated as 'rising leaders', and me. We met a couple of times earlier in the week to establish Kiva Zip's main 'pain-point', expanding our lender base. On the night of the Jamathon, we were joined by two additional rising leaders to complete our team for the competition.
Hosted at the open, almost play-like workspace of Tagged Inc., the evening began with drinks, food and a general mingling of all seven non-profit teams. It was an eclectic bunch in attendance, all young, bright, and especially determined professionals. Amongst others, I met the founder of Kuli Kuli. She suffered the early stages of malnutrition in West Africa and decided with others to start a mission-driven business making granola bars from a super-food plant called Moringa while simultaneously supporting women-owned co-ops that grow the crop in West Africa. I also met the founder of The Reset Foundation, which offers a model of incarceration centered on learning, education, and reentry.
Following each non-profit's brief 'pain-point' presentation, the teams went to their assigned room or table and spent the next two hours brainstorming solutions. Intense conversations occurred over coffee and wine, ideas were vetted, some were thrown out and the better ones were written down. When time was up, each team presented its solution. In the end, we walked away with some excellent ideas thanks to the fresh views of outside experts looking at Kiva Zip.
On Friday, Kiva Zip had it's first ever Bay Area Holiday Marketplace. We began with a round table discussion of some twenty local Trustees on how to identify and endorse more borrowers. Later, Kiva's entire office was opened up to over one hundred Kiva Zip community members and their friends. 14 amazing Kiva Zip entrepreneurs showcased their products, and it was exceptionally nice to meet the borrowers face-to-face and sample their goods! From fermented cabbages to shoes made from recycled rubber, the goods being sold ran the gamut. As a Fellow, I felt warmed to finally put a face to name on several contacts I had made throughout my Fellowship via email and telephone. We drank, laughed and networked, and it was with some reluctance that I had to pull myself away.
On Saturday, some other Kiva Zip volunteers and I attended the San Francisco Bazaar "quirky holiday craft fair and D.I.Y. marketplace". At our booth, we signed up both volunteers and lenders. Later, I hit the pavement and pitched as many individual vendors about Kiva Zip as time would allow, gently offering a nifty flier and a business card once I'd established some interest. We even ran into some vendors who had already raised funds using Kiva Zip, including a leather wallet craftsman who uses old furniture remnants, an artisanal soap manufacturer and a cupcake bakeshop. More than a few people with whom I spoke had already heard about Kiva Zip, attesting to its growing profile amongst the Bay Area community.
On the following Monday, I attended an event at Hult International Business School, home of the now famous Hult Prize. Here, a group of passionate Social Entrepreneurship Master's students officially launched their 'co-creation' hub, a hybrid between an incubator and a support group for students looking to start their own business. Under these auspices, they are currently building their own Kiva Zip Trustee profile.
I spoke briefly to the invited attendees, coming from various backgrounds, all passionate and determined to change the world for the better through entrepreneurship. The first project to come out of this hub might well be a recycling start-up that aims to credit the user of plastic bottles and aluminum cans everytime he/she deposits the used container into a pre-placed recycling receptacle. Their plan is to credit the consumer's bank account via the use of a phone app.
After the event, we headed for a beer at a local brew pub, where I pitched a Russian language TV host whom I had met at the event on the possibility of her producing a TV segment about Kiva Zip, perhaps highlighting a Russian borrower or focusing on one of Kiva's founders.
As a Kiva Fellow serving with Kiva Zip, I am continually inspired by the people I meet. The experience of volunteering has given me a more optimistic outlook on humanity - the world more generally and on my own potential for making meaningful, positive contributions to it.
For my next adventure, I go to Sierra Leone. It was not without some trepidation that I accepted the placement and even now I feel a little daunted by the challenges that lay ahead. But I know that it is the right thing to do and that I am continuing to forge a purposeful path in the service of something bigger than myself.
My hope is that some day, after we've proved Kiva Zip to be a self-scaling model of ground-up community empowerment, we'll take it to places like Sierra Leone, where interest free loans could revolutionize micro-finance. In the mean time, I urge you to help us grow the phenomenon, here in the United States of America, where there is so much important work still to be done.
To do your part, go to https://zip.kiva.org/loans today and find an entrepreneur that inspires you.
Know someone who's looking to volunteer for 4 months (or more) for a great cause? Check out the Kiva Fellows Program! It's a great opportunity to learn about how crowdfunding can be used as a tool for economic development in the US, as well as social enterprise and entrepreneurship. With positions in several U.S. cities, Kiva Fellows are our eyes and ears on the ground, working directly with Trustees, borrowers, and lenders and helping to further our mission. We’re always looking for Fellows to serve with Kiva Zip that are committed to support their local community - so we encourage you to share this opportunity with your contacts. Applications are accepted three times a year; the application deadline for the May 2014 class is January 26, 2014. More at www.kiva.org/fellows! ...(continued)
This is Part 2 of a three part series on Kiva Zip’s risk management philosophy, policies, and procedures. Part 1 covered delinquency management. Part 2 covers our borrower and Trustee review process. Part 3 will cover how lenders can participate in risk management.
Kiva Zip primarily assesses potential borrowers based on recommendations from Trustees, individuals and organizations that are passionate about supporting entrepreneurship, small businesses, and economic development within their communities. This blog post outlines the requirements we’ve developed for becoming a Kiva Zip borrower and Trustee.
When Kiva Zip first launched, we had a lot of questions about whether using Trustee recommendations to underwrite loans could work. Early on, our team tried to aggressively experiment with onboarding different types of Trustees to understand the characteristics of successful Borrower-Trustee relationships. As Kiva Zip has grown and matured, we’ve become more rigorous and structured with the borrowers and Trustees we post on the website. We’ve developed a set of general requirements that guide us in those decisions.
To be posted onto Kiva Zip, borrowers must meet three requirements that we verify through self-reported data, online research, and third party services.
Financial Stability: To be approved for a Kiva Zip loan, borrowers cannot be under serious financial stress. That means that they cannot be over-indebted or currently in foreclosure, in collections, or under any liens. We aim to post borrowers that have a monthly debt-to-income ratio of 30% or lower. While we do not reject any borrowers solely because of a low credit score or past bankruptcies, we reject borrowers that have been convicted of a financial crime within the past 7 years.
Trust Network: Borrowers must also demonstrate that they have a network of people that will vouch for their character. Most frequently, this is done through an endorsement from a Trustee that has a strong relationship with the borrower and can credibly assess the viability of the business. We’ve also been testing other ways of meeting this requirement, such as requiring borrowers in the US to connect with us on social networking platforms or to invite a number of people to lend to them.
Social Good: Kiva Zip requires that all loans be socially impactful. This requirement can be met through several different causes: the borrower might serve a low-income neighborhood, be without access to traditional financial services, or have a specific social mission like improving access to nutrition or helping disadvantaged communities.
While the broad categories of these requirements are consistent in both the US and Kenya, different standards apply to each country. For example, we do not require a Kenyan borrower to share social networking information. Standardized information for borrowers in Kenya can be difficult to attain, so we rely more heavily on Trustees. Further, in the US, we accept a wider range of Trustees to establish a borrower’s trust network.
Understanding how to select qualified Trustees has been one of our biggest challenges. Because the Trustee role is a new concept, we’ve had to aggressively experiment with different types of Borrower-Trustee relationships and have received mixed results. From our experiences over the last two years, we’ve narrowed down our selection process and improved our performance quite substantially.
We’ve found that the most important factor is that Trustees be aligned with our mission and values. They need to create a positive social impact in their communities through the borrowers they support, and positive social impact must be the primary motivation for any endorsement. In the past, when Trustees have had financial incentives or other motivations to endorse borrowers - such as a franchiser endorsing franchisees - we’ve seen very poor results.
We also expect Trustees to have enough resources to support borrowers through the life of the loan. Small businesses face challenges on a constant basis. Without a network to which borrowers can turn for advice and support, the success of their business can be jeopardized.
In order to ensure that Trustees share our mission and are equipped to support their endorsed borrowers throughout the life of the loan, they must complete an application and create an online profile. In addition, there are other country-specific requirements.
In the US, we require individual Trustees and Trustee organizations with 5 or fewer employees to go through an online identity verification and background check. Individual Trustees must have at least two years of experience in a field such as economic development, technical assistance, or small business advising. In Kenya, many Trustees go through an on-site visit. The purpose of the on-site visit is to verify the organization’s mission and resources where the process is difficult to complete online or where we lack third party references.
With so many people across the world locked out of traditional financial services, new methods of providing capital to promising entrepreneurs and small businesses must be developed. Over the past 30 years, the concept of trust-based lending has largely disappeared. Particularly in the US, the rise of retail banking and credit scoring has based lending on complex algorithms that few people understand. We believe that using social capital to underwrite loans is a better way select borrowers and expand access to capital. We imagine Kiva Zip as a resource where anyone with a solid business plan and a trust network can access the capital needed to grow his or her business.
Over the past two years, Kiva Zip has tested the Trustee endorsement model as one form of social underwriting. In the future, we see a number of other possible methods that can build on and develop this concept. Perhaps we will build a system where multiple people crowdsource endorsements for a single promising borrower. Or maybe we will try to leverage existing social networks and online data to select borrowers with strong trust networks. Even asking the Kiva lender base to play a heavy role in vouching for potential borrowers is something that we’ve considered.
Developing a scalable, effective method of social underwriting opens enormous possibilities for not only growing Kiva Zip but also changing how the world thinks about creditworthiness. While Kiva Zip has faced lots of challenges and has made many mistakes, we believe that it is a change worth fighting for.
Entrepreneur Corey Rennell saw that a lot of consumer-packaged goods were much more focused on profit than they were on peoples’ health and decided to do something about it. He founded CORE Foods on Earth Day, significant because it is a nonprofit packaged food company that is good for you, good for the planet and good for the local community.
Since its start, CORE Foods has produced meal bars that are made with all organic ingredients and are perfect for on-the-go meals that are healthy and keep you full. CORE Foods has also worked hard to develop a robust online community around a concept called the 'Core Challenge', a program in which people eat mainly raw fruits and vegetables and a CORE meal every day for 30 days to become their healthier self.
“We’re more than a business,” says Rennell, “We’re leading a movement.”
Corey understands the value of a strong and supportive network, and CORE Foods has a number of ongoing mentors through Pacific Community Ventures (PCV), a 15-year-old nonprofit organization that matches small business owners with expert business advisors with the mission of growing small businesses across the country and creating quality jobs where they’re needed most. PCV’s network of over 300 advisors are all experts in their fields who volunteer their time to work with these small business owners to help PCV toward that mission.
“PCV enables us to take the risks that we have to take to grow the business,” says Corey.
Of the advising that PCV has provided his company, Rennell says, “PCV is like having an older, wiser brother. You can call on him anytime, he’s always got your back, and he at least knows the right way to point you when you reach a major crossroads. I just really can’t thank PCV enough for the support.” With the help of PCV advisors, CORE Foods has grown from two to nine employees since 2012, and has seen a 140% revenue growth over the last year.
James Hipkin is CORE Foods’ all-around marketing advisor and helps when the team is making strategic changes in their packaging and strategy. The CORE Foods team also works with Alex Long, who has been helping them align QuickBooks with their inventory management system – a vital change, as inventory equity has gone up significantly as the business has grown.
In addition, PCV endorsed Corey for a loan on Kiva Zip. As a Kiva Zip Trustee, PCV has the ability to identify and vouch for entrepreneurs whose businesses they feel would benefit from a 0% interest, crowdfunded loan. Corey’s loan will fund the launch of a new flavor that will help CORE Foods' placement in additional Whole Foods regions.
PCV works with entrepreneurs like Rennell who share in the belief that strong small businesses mean a strong local economy, which leads to the creation of quality jobs for those who need them most. CORE Foods supports their employees in a way that helps them love the work they do every day.
To learn more about PCV’s Business Advising program, or to be matched with a PCV advisor of your own, check out www.BusinessAdvising.org/.
This blog post was written with the help of Amanda Bergson-Shilcock, Director of Outreach and Program Evaluation at the Welcoming Center for New Pennsylvanians.
In Philadelphia, Pennsylvania, the Welcoming Center for New Pennsylvanians provides practical, nuts-and-bolts business guidance to entrepreneurs from around the world – as well as those who grew up just around the corner.
“In the simplest terms, we help ambitious business owners to tap into the resources they can’t access on their own,” explains the Center’s Herman Nyamunga. “It could be that they are new in town, or just new to entrepreneurship. Either way, we are the connectors that help them capitalize on financial and other resources available to them.”
Kiva, with its can-do emphasis and community focus, was a clear fit, says Nyamunga. And he had just the right entrepreneur in mind for the Welcoming Center’s first endorsement as a Kiva Zip Trustee.
Carl Lewis (no relation to the famous sprinter) is an experienced chef with a lifelong dream: Opening his own restaurant to share his love for Jamaican cuisine with a wider audience.
But Lewis, who already runs a small catering businesses, isn’t just interested in his own success. “He really wants to help the next generation of young chefs,” says Nyamunga. “That was what really impressed me when I met him. He has a plan, and he has the skills to carry it out.”
Carl, Owner of 48th Street Grille
Helping Lewis also fits into the Welcoming Center’s mission of building shared prosperity for immigrant newcomers and longtime neighborhood residents alike.
This commitment stretches back nearly a decade to the agency’s first publication, a simple guide that was intended to help immigrant entrepreneurs find their footing in the United States. But community response to the agency’s How to Start a Business guide quickly showed that American-born business owners were clamoring for similar guidance.
“Our founder Anne O’Callaghan grew up in Northern Ireland in the 1960s,” says Nyamunga. “She always says that the magic of America is that people from every background can come together to build their future. Because the alternative [of fracturing communities along ethnic or religious lines] is ‘The road to no town.’”
The Welcoming Center's philosophy aligns well with Kiva Zip's mission to provide funding to entrepreneurs who lack access to traditional sources of capital. New immigrants to the United States often face difficulty starting a business because of their [understandably] short credit history. The model of social-underwriting is significant in overcoming the low credit score/short credit history barrier.
It is also a philosophy that fits in well with Lewis’s goals. His new restaurant will be located in the traditionally African-American neighborhood of West Philadelphia – and the young chefs he’s mentoring reflect both the community’s new arrivals and its longer-term residents.
“Carl has the angels on his side,” says Nyamunga, only half joking. “People are lining up to ask how they can help. That’s the power of his vision.”
It’s a vision that the Welcoming Center shares – and hopes that many Kiva donors do as well. If you would like to support an entrepreneur, click here to make a loan!
Founded in 2003, the Welcoming Center for New Pennsylvanians to date has served more than 10,000 people from 140 countries. The agency’s employment, small business, adult education, and cultural competency programs reach more than 1,400 people each year. For more information, contact Amanda Bergson-Shilcock, Director of Outreach, at (215) 557-2626 or firstname.lastname@example.org.
Learn more about the Welcoming Center’s work with entrepreneurs: http://www.welcomingcenter.org/immigrants/start-business
Learn more about the Welcoming Center’s engagement with American-born community members:
This is a continuation of "SF Budget & Finance Committee passes Kiva Zip Resolution" from 10/16/2013.
Kiva and the City of San Francisco’s partnership is a monumental and exciting win for local economic development, small business access to capital, and strengthening community.
Local economic development: According to the U.S. Small Business Administration (SBA), small businesses create two out of every three new jobs. This is an important statistic given that the Bureau of Labor Statistics estimates that there were over 150,000 unemployed people in San Francisco as of August 2013.
Small business access to capital: “The mission of the Office of Small Business is to foster, promote and retain small businesses in San Francisco,” says Regina Dick-Endrizzi, Executive Director of the office. “Our small businesses will now have Kiva Zip as a resource to help them start and grow here, and a great way to do it is through the support of our community.”
Strengthening community: “Kiva Zip's vision is one of a community of individual people coming together to lend their support to owners and aspiring owners of the City’s smallest of small business,” says Kiva Zip Director Jonny Price. San Francisco District 2 Supervisor Mark Farrell agrees, saying “through this partnership, everyone can be part of a local small business’ success by crowdfunding a small dollar loan to help them start up or expand their businesses. When they succeed we all succeed, jobs are created, neighborhood economies grow, and communities are strengthened.”
As a Trustee, the City of San Francisco, with the help of the Office of Small Business, can now identify and endorse entrepreneurs for 0% interest small business loans up to $5,000, all crowdfunded on Kiva Zip. Kiva Zip differs from traditional financing resources in that it bases lending decisions on character and trust. Trustees play a crucial role for Kiva Zip by vouching for the character and business viability of entrepreneurs they know and trust within their communities. In return, Trustees leverage Kiva Zip as a revolutionary resource to actively and directly infuse crowdfunded capital into small businesses in their communities.
The City of San Francisco is joining an impressive and growing network of Bay Area Trustees. Endorsers run the gamut from large economic development offices to the local pizza shop. Organizations of all sizes are rallying behind the small businesses in their neighborhood and Kiva Zip's model of social underwriting.
Kiva Zip Trustees promoting small business success in the Bay Area include:
- Economic development organizations such as Mission Economic Development Agency (MEDA), La Cocina, Renaissance Entrepreneurship Center, Women's Initiative, Pacific Community Ventures, and the San Francisco Small Business Development Center
- City supervisors and offices including The City of San Francisco, The City of Oakland, District 2 Supervisor Mark Farrell, Office of the Supervisors of Districts 5 & 9
- Community-based organizations like San Francisco LGBT Community Center, Quesada Gardens Initiative, and the Center for Urban Education about Sustainable Agriculture (CUESA)
- Local stores such as Bi-Rite, California Made Mercantile, and La Victoria Bakery
- Individuals like Justin Renfro, Andrea Baker, and Chris Whitten
The City of San Francisco has already endorsed its first entrepreneur, Ramni Levy, owner and chef of King Knish. Chef Levy is currently fundraising a $5,000 loan to purchase a van to expand his Eastern European food catering business.
Anyone can become a lender and create an active and tangible impact helping Ramni and other entrepreneurs turn their small business dreams into reality with amounts as small as $25. Visit zip.kiva.org to become a lender, borrower, or Trustee today!
Click here for a list of entrepreneurs currently fundraising in San Francisco, or see below!
Kyle and Erin, Kipper Clothiers
Garry, Souls of San Francisco
Traci, Poetica Arts & Antiques
Xan, Fox and Lion Bread
Want to bring Kiva Zip to your city? Email ContactZip@kiva.org to get started. ...(continued)
One of the essential parts of the Kiva Zip model is the Trustee. Trustees are the organizations or individuals that work directly with Kiva Zip and help identify and support borrowers throughout the loan cycle. What those Trustees all have in common is that they are motivated by helping people and changing lives. Apart from that common vision, Trustees can differ a lot in terms of the services they provide. I have identified another commonality among several Kenyan Trustees, though - they not only help people but also the environment!
One of the biggest challenges in the Kenyan slums is the lack of sanitation facilities and solutions for waste management (reduce, reuse or recycle). Thus, this is an important topic toward which an increasing number of NGOs are shifting their focus.
One way to address the issue of large amounts of waste is to view the waste as an opportunity rather than an unsolvable problem. Kisumu Innovation Center Kenya (KICK), for example, endorses borrowers who make paper products that can be produced out of old newspapers and Christmas ornaments out of old soda cans.
Another recent Trustee shreds down plastic waste to produce recycled components for construction or neat photo frames. In some cases the material is free, but in other cases the organizations even buy the waste from waste collectors, which in turn creates jobs opportunities. Like one Trustee put it, “We might lack the capital, but we do not lack creative ideas!”
Promoting Cleaner Energy
Solar panels and biogas are becoming more and more popular sources of energy, and a number of our Trustees provide or encourage this type of power. One such Trustee, Umande Trust, builds sanitation facilities in slums where the waste is then used to produce biogas. Umande endorses Kiva Zip borrowers that are part of the communities that run the sanitation centers.
Another way to reduce use of fuel consumption is to make sure the energy is used in an efficient way. A brilliant example of this is the Trustee Global Village Energy Partnership (GVEP) International, who works with entrepreneurs that produce clay liners for cook stoves. It is a simple idea, but the clay conserves heat and reduces the fuel needed to cook a meal significantly.
How is Kiva Zip, a direct-lending program based on the internet and mobile money transfers, working without the aid of micro-finance institutions on the ground?
It begins with and is upheld by one important group of individuals: local community members we train to be trustees.
As we near our two year anniversary and celebrate our climbing repayment rate in Kenya (now at 92%), we would like to honor our top-performing partners through a series of Trustee Spotlight blogs.
While much of the focus goes to borrowers, understandably as they are our target population, we’d like those supporting them to know that, out in the field, it is the trustee who ensures the loan process runs smoothly and sustainably. It is the trustee who vets borrowers, mentors them, and handles delinquency.
The mutually beneficial relationships between Kiva Zip and trustees are furthering not only Kiva’s mission, but the individual missions of each trustee as well.
Our first feature trustee is The Youth Banner (TYB), who has supported 37 borrowers in repaying 66 loans over the last 17 months.
Pictured: Youth Banner Staff (left to right: Clive Angwenyi, BEEP Program Manager; Ruth Ruhara, ATG Project Manager; Kevin Kisali, Financial Linkages Project Manager; Kenneth Karuri, Training Project Manager)
Kevin Kisali has been the Kiva Zip liaison since the beginning and is responsible for TYB reaching “Tier 3” status, which is awarded to trustees with at least 30 completed loans and over a 90% repayment rate. In Tier 3, TYB can now endorse 20 new loans per month and unlimited repeat loans. Kisali says this is huge for them, as they have had a long waiting list of clients waiting to get Kiva Zip loans and are now able to serve more. Read more about Trustee Tiers in our FAQs: "How many loans can trustees endorse?"
Those in line are apart of Youth Banner’s six-month long BEEP program, which “hand-holds” youth through a practical, student-tailored entrepreneurship training. They serve 10-15 classes of 15-45 members, with nearly 1,500 graduates in the last three years. When entrepreneurs enter the program, TYB performs needs assessment evaluations and finds that 90-95% do not keep records of their business transactions. Teaching them this one skill alone has proven to increase their income, sometimes exponentially.
Pictured: Business Planning session, Dagoretti Business Clinic 2012
Kisali says that through offering interest-free Zip loans on an individual basis, rather than in groups as many MFIs require, has made BEEP’s presence known and valued by the informal settlement population it aims to serve. As a result, more youth have not only gotten the financial support they need to kickstart their businesses, but the technical training that sustains them. Additionally, the BEEP clubs discuss socio-cultural issues like drug abuse and gender equality to promote social responsibility. Members stay connected to TYB even after graduation for business and personal support.
Kisali sees being a Kiva Zip trustee as a perfect match between like-minded and similarly structured organizations.
“Both Kiva and TYB have an end goal, a direction but not a specific road map. We build as we go, make mistakes and learn, getting wiser along the way.” ...(continued)
The Bay Area has a rich tapestry of social innovation. There are numerous incubators and accelerators, three Impact HUBs and ample resources for adults dedicated to social and environmental advancement through enterprise. There is a gap, however, for our young innovators. It is our aim to fill that gap.
Youth Social Entrepreneurship for Equitable Development (SEED), based in Oakland, CA, supports the development of community-led social enterprises by providing training, resources and investments to young innovators who traditionally face barriers to economic opportunities.
Originally known as Ashoka's Youth Venture San Francisco Bay Area, Youth SEED was created to advance a unique model of using youth social entrepreneurship as a vehicle for civic engagement and equitable development. In our first 3 years, we gave social entrepreneurship training to Bay Area youth, from which 25 social enterprises were funded and launched.
We have had a relationship with Kiva since our inception. Matt Flannery, Kiva’s Co-Founder, was our keynote speaker at the first annual Community Panel, an event where youth entrepreneurs pitch their enterprises. Since then, it was clear that Kiva would have a relationship with young entrepreneurs in Oakland. The only questions were when and how.
Once Youth SEED was firmly established a couple years later, we approached Matt, and he directed us to the Kiva Zip team. After being introduced to the concept and process of becoming a Kiva Zip Trustee, we knew that this was a unique opportunity to bring a great resource to young entrepreneurs in the Bay Area. It took us a few months until we were ready to endorse our first borrower, and the Kiva Zip team was encouraging, responsive and incredibly supportive.
Youth SEED’s first endorsed borrower was Simphony Productions, a youth-led multimedia production company. We met this group of young men through a partnership with United Roots, a Media Arts organization in Oakland. Each member of the team excelled in a particular area of media, film, photography, and sound engineering. They formed Simphony Productions to start a multimedia firm, as they say, “with the industry quality without the industry price.”
Pictured: The young men behind Simphony Productions
Simphony is able to borrow most of the necessary equipment from United Roots; however, the group needed a stronger web presence, data storage capacity and to expand their brand. They needed a loan, and we decided to endorse them because they demonstrated that they are a committed and responsible group of young men. They have shown leadership and dedication to the creation and development of their business venture and have invested their time and personal resources to the development of their production company.
We worked closely with Simphony to develop a budget and manage their expenses. After creating their Kiva Zip profile, their $1,000 loan was fully funded in just eight days by lenders from North America to as far as Australia. It was an opportunity for them to see that people believe in their talent, in the work they are developing and, most importantly, in them. The Kiva Zip loan was and will continue to be a victory for them.
From our four years of engaging in youth social entrepreneurship in the Bay Area, it is clear that there is an abundance of young people with the dedication, skill, passion and determination to contribute to their communities in a positive way; however, there is still a lack of support and resources to guide and cultivate this energy. Our relationship with Kiva Zip is an invaluable contribution to the ecosystem of resources for these young leaders to succeed and thrive.
There are many bright and innovative ideas here in the Bay Area; we look forward to continuing our Trustee role with Kiva Zip in order to offer more resources, support and a wider platform for our young leaders.
To learn more about youth social entrepreneurship in the Bay Area or how you can get involved to support these young leaders, visit us at www.bayareayouthseed.org. You can make a loan to an entrepreneur on Kiva Zip by clicking here! ...(continued)
My wife and I farm in the foothills of the Sierra Nevada Mountains in California. We've worked with California FarmLink for the past two years to get financial counseling and to obtain small annual operating loans to cover production costs. Last year, we discussed obtaining a FarmLink capital loan, and FarmLink sponsored us to obtain that loan from Kiva Zip.
Alan and Jo, Owners of Riverhill Farm
While our Kiva Zip loan was funding, it was an extraordinary experience to communicate with citizen lenders from all over the world over the time that it took to become fully funded. We were really impressed with the process, and we think that it holds great promise as a new initiative to address the needs of small farms across the U.S.
Left: Lettuce being planted and harvested, Right: Sweet potato field just after planting
The strength of the local food movement of the last ten years has done more to address the needs of small, family farms than fifty years of failed State and Federal government efforts. The proliferation of Farmers' Markets across the U.S. and increased patronage of those markets demonstrates consumer support for access to local, healthful food. Community Supported Agriculture (CSA) has also been an important element that supports many small farms by supplying early season capital to cover the direct costs of production.
These markets are important outlets for small farms. Still, while many family farms are successful in covering the direct costs of production and pay themselves a modest income, few are able to build up a capital reserve that provides for equipment purchases and expansion of production to make their operations more profitable, and access to capital through traditional lending institutions is challenging for many small farms.
Harvesting baby greens
Kiva Zip is a new and extraordinary resource for farmers, and provides a unique opportunity for citizens around the world to support farmers working to provide their communities with healthful, fresh food.
Kiva Zip is actively seeking small farms and food producers that could benefit from their program as Alan and Jo have. If Kiva Zip sounds like it could be a solution for you, too, complete this short survey to be contacted by a member of Kiva Zip. If you have any questions, please send an email to ContactZip@kiva.org. ...(continued)
Since the launch of Kiva Zip, we have allowed loans to fundraise for 90 days on the site before they “expire”. Over the next couple of weeks, we’ll be reducing that time limit to 45 days.
On Kiva Zip, when a loan expires, we refund lenders, and the borrower does not receive a loan. Over the last two years, with a 90 day fundraising period, there have been very few expirations on Kiva Zip – in fact, only 10 out of over 1,600 loans posted have expired (less than 1%). We expect that shortening the fundraising period from 90 days to 45 days will increase the number of expirations we see on Kiva Zip, especially in the case of larger loans. So why would we change this policy? For a couple of principle reasons:
First, we expect that shortening the fundraising period will accelerate the velocity of lending on Kiva Zip. As you can see from the chart below, the average loan fundraises relatively quickly immediately after it is posted to the Zip website and then extremely quickly toward the end of the fundraising period, as the expiration date approaches. But there is a long lull of about 45 days in the middle of the fundraising period, where there is very little lending activity.
By removing this middle 45 days, we hope that we can compress this cycle and fund more loans more quickly as a result. Enabling Kiva Zip entrepreneurs to access the capital they need to invest in their business in 45 days rather than 90 days could make a significant positive difference in many cases – for example, if the borrower has a short-term financial opportunity, which they need to act quickly to realize.
Second, we believe that expirations can have a number of positive outcomes for the Kiva Zip program, as long as they occur in moderation. Perhaps most important, we believe that lenders are good assessors of the riskiness of loans. Kiva Zip is still in its early days, but the data appear to bear out this hypothesis, too – our analysis to-date has shown a strong correlation between the number of lenders that fund Kiva Zip loans and their repayment rates. So if a loan expires, it might be because the wisdom of the crowd has cause to question the borrower’s commitment or capacity to repay.
We also think that the threat of expirations will incentivize borrowers (and trustees) to maintain a high quality of loans – for example, by taking a good photo that clearly shows the borrower and his or her business, writing a compelling story, or including links to the borrower’s website or Facebook page. Finally, we hope that expirations will occasionally prevent loans from fully funding if the Kiva Zip lender community collectively decides that the borrower doesn’t really need the money or that the loan won’t have the desired positive social impact.
While we do expect to see an increase in expirations as a result of this policy change, we expect that increase to be small. We currently envisage a ceiling of around 10% for expirations. If that number starts to climb too high, we may look to revisit this policy or find other ways to increase fundraising rates.
We believe that this rate of loans fully funding compares favorably to other crowd-funding platforms, and for financially excluded and socially impactful entrepreneurs looking for small amounts of capital to launch or grow their business, Kiva Zip presents a great option.
As always, we’d love the feedback of lenders, borrowers and trustees on this policy change. Feel free to write a comment on this blog below or email us at ContactZip@kiva.org. ...(continued)
Earlier this month Kiva Zip celebrated a milestone of having disbursed its 1,000th loan to entrepreneurs in Kenya. What is unique about the Kiva Zip model is that it is a direct, person-to-person lending platform with 0% interest loans and no fees for the borrowers (learn more here!). Entrepreneurs are endorsed by Kiva Zip Trustees--individuals or organizations in their community who know and trust them. We are very excited about the tremendous progress we have made and about the improvements we continue to make that allow us to better serve our borrowers, Trustees, and lenders.
Kiva Zip targets entrepreneurs with very small businesses and who can benefit from a loan as small as $50-$100 USD. In Kenya, Kiva Zip uses mobile technology to facilitate borrower training, the loan application, loan disbursement and loan repayments. Therefore there is no need for an extensive branch network or for borrowers to travel to do any of those tasks. The only tools they need are a simple mobile phone and an M-PESA mobile payment account.
But what can you really do with a loan as small as $100? When I started my Kiva Zip Fellowship, I was skeptical about the viability of such small loan amounts. While on the ground in Nairobi, I decided to meet as many borrowers and Trustees as I could and ask them, firsthand, if these loans make a real difference...
Cash is King (even if it's not a lot)
One Kiva Zip Borrower was surprised by my concern: "Successful businesses don't need to start with big money. I'd rather start small and grow quickly," he told us. This can be a life changing amount.
Consider that many people that Kiva Zip supports get by with less than $2 a day. When put in this context, a Kiva Zip loan is equivalent to about 2 months' worth of salary, and there are multiple ways to make quick profits if the loan is used effectively.
There are many examples of how borrowers I've have met have used their small loans, but the most common strategies are buying more stock to increase selection, buying in bulk to get discounted prices, buying when prices are low, buying higher quality products and buying tools that increase efficiency (a sewing machine in Kenya costs less than $100). All of those seemingly small improvements in buying habits can have significant impact on profit margins and, in turn, on the quality of life.
One of the 1,000 loans funded Dancun's Basket Weaving Business
Milka used her loan to increase her monthly production from 1,000 cards to around 3-4,000 cards
Unexpected side effects of direct lending
There are other positive side effects of direct, person-to-person lending that I had not realized before going out in the field and interviewing people. I had not expected to hear stories about:
- Increased self-confidence: Kiva Zip loans are crowdfunded by lenders all over the world. In some cases, this gesture is the first time that a borrower feels the support and trust of a stranger who believes in his or her business.
- Education: Borrowers gain experience in how to manage and plan their business so that they can follow their repayment schedule.
- Building credit history: Borrowers might be able to provide evidence that they are creditworthy in order to access larger loans from microfinance institutions (MFIs) or banks in the future.
- Environmental protection: Some borrowers use their loan to turn waste into safe, marketable products.
Michael used his Loan to turn noxious weed from Lake Victoria into paper products
Having seen the difference a small loan can make to an entrepreneur in Kenya, I celebrate Kiva Zip's milestone of disbursing its 1,000th loan in Kenya and anxiously await surpassing the next one! ...(continued)
When I first learned of the possibility of a fellowship with Kiva, my mind raced with visions of exotic food stalls on bustling streets, colorful people conversing in strange tongues and moped rides through pastoral countryside to conduct borrower verifications.
So, when I learned that Kiva wanted me to work here, in my adopted city of San Francisco, I was a little hesitant at first. Then I heard about this innovative program called Kiva Zip, which had the potential, quite literally, to revolutionize micro-lending across the world. This was a chance to work in a start-up environment with an amazing organization full of inspiring people.
Pictured: The Golden Gate Bridge, San Fran's most famous landmark
Now, six weeks into the fellowship, it’s time to take stock. How have I been spending my time, and what have been my successes so far?
As a Zip Fellow, my main goal is to find and on-board potential borrowers and the trustees who will endorse them. I send out emails and make phone calls. I arrange meetings over coffee where I pitch the Zip program. I attend events where I network. And, of course, I keep track of my progress by inputting data in various spreadsheets.
Best of all, I set my own hours, dress casually, meet inspiring people and talk about cool businesses that are having a positive impact on their community. (If, by the end of this post, you are interested in applying to be a Kiva Fellow, do so here!)
My primary focus is to find small, sustainable farms and food businesses. Kiva, in keeping with their culture of democratic openness, largely allows the trustee to define what constitutes social impact.
Pictured: One of the many farmers' markets in the San Francisco Bay Area, with City Hall in the background
As I reflected, I had a lot of irons in the fire, though not a lot of concrete movement just yet. The question was, had I hit the dreaded ‘trough of disillusion’ that the Fellows team had warned us about?
My one solid success so far was Daniel at Sour Flour, a handsome gentleman in the Mission district of San Francisco who, for years, has been making unadulterated bread out of just flour, salt, water, and…yes, airborne, some might say, God-given, naturally occurring yeast. It is said the fog banks that roll in here off the Pacific moderate the climate, thus making an ideal environment for its cultivation.
Having given much of his bread away to the needy for years and continuing to hold baking workshops in his neighborhood, Danny came to me in response to an email I had sent out. He was quickly endorsed by La Victoria Bakery where he makes his bread. Their founder, Jaime, said Danny had finally ‘learned the cold reality of the bottom line’ and was thus ready for a loan of $5,000. He needed to buy bread bags, flour, dough tubs and trays, among other things.
I am delighted and proud to say that Danny funded in just under 9 days thanks to generous lenders from as far away as Belgium, Turkey, Germany, Sweden and Finland, not to mention his neighbors just around the corner from him in San Francisco. This is the beauty of technology being used for good: a global communication tool connecting people thousands of miles apart to fund a local, sustainable business that’s rooted firmly in its community.
Pictured: Danny, Owner of Sour Flour
Danny’s success reminded me that people thousands of miles away cared enough to help a fellow human get that much closer to reaching his dream - a remarkable phenomenon in itself that speaks volumes about the better side of our natures. Danny’s story also reminded me that there are people all over the world who care deeply about how we make our food, about what we put into our bodies, and how we relate to the planet and to each other. The next day, while listening to the Bill Moyers Radio show, I heard the Indian activist Vandana Shiva talk about framing agriculture and food production in terms of asking Mother Earth what she needs rather than asking what she can give us.
Soon after Danny was funded, I met with an established whole foods retailer who identified a great use for Kiva Zip. Real Foods Company of San Francisco has many suppliers who are GMO-free but cannot afford the approximately $10,000 it costs to get certified as non-GMO. Additionally, they suggested that Kiva Zip could help small producers become certified organic producers. It hit me then that Sour Flour is just one success in what is truly an ocean of possibilities. While the road may be bumpy at times, I am certain that as a Kiva Fellow, I am fighting the good fight. So the next time the fog rolls in, figuratively at least, I’ll remember that it might have a silver lining, or, at least when it clears, there might be a whole, unexpected new vista in its place.
Pictured: Real Foods of San Francisco, one of the earliest natural food retailers in the Bay Area
You, the lenders, and we, the Fellows, are like foot soldiers on the ground in this epic effort to make the world a better place, one small step at a time. So, whether it be through empowering an individual half-way around the world or through encouraging environmentally conscious food production (or both), we are part of something much bigger than ourselves here.
One might go so far as to say that we are, truly, on the right side of history with this one. Well, with that, you probably know what I am going to say next! Go on, make a loan to a sustainable producer today and do your ‘Mother’ a big favor. ...(continued)
This blog post is a continuation to last week's San Francisco to vote on Resolution to become Kiva Zip Trustee.
Pictured: The Kiva Zip team outside of City Hall before the Budget and Finance Committee meeting
Breaking news! On Wednesday, October 9th, the City of San Francisco’s Budget and Finance Committee approved a Resolution to create a partnership between the City of San Francisco and Kiva. This Resolution will allow the City to act as a Kiva Zip Trustee to identify and endorse small businesses for Kiva Zip loans. Having been passed unanimously by the Budget and Finance Committee, the full Board of Supervisors will vote on the Resolution on October 22nd.
The meeting began with Supervisor Mark Farrell passionately expressing his active support for Kiva Zip. Mr. Farrell, the first California elected official to act as an individual Trustee, highlighted the City’s partnership with Kiva Zip as the “opportunity to empower our communities in a new way,” adding that “when small businesses do well, we all do well.”
Pictured: Kiva President Premal Shah and the Kiva Zip team in their seats at City Hall
Kiva President Premal Shah spoke next, articulating how small businesses almost always name capital within their top 3 constraints. He added that Kiva Zip is not only revolutionizing small business access to affordable capital, but also creating and promoting community and human connectedness.
Pictured: Kiva President Premal Shah presenting to the Budget and Finance Committee
The next organization to support the resolution was the Mission Economic Development Agency (MEDA), a Kiva Zip Trustee and community-based organization offering free economic development services in the Mission district of San Francisco. To date, MEDA has endorsed 7 borrowers, ultimately infusing over $55,000 of capital into the Mission neighborhood!
The Small Business Commission and Chamber of Commerce also offered support for the creation of a partnership between the City and Kiva. Both organizations expressed excitement about the opportunity to utilize Kiva Zip as a tool to give the small businesses in their network access to capital, and also as a platform to provide local community members an avenue to support the local small businesses in their neighborhoods.
Kiva Zip borrower Anna, owner of Anda Piroshki, detailed her inspirational story and how $30,000 in Kiva Zip loans from over 500 lenders have helped her expand her piroshki business, open a second kiosk, and hire employees. Anna concluded with how Kiva Zip’s impact is “not only the loan, it’s the connection. I feel a part of this community, (the lenders) believe in me and support me.”
Pictured: Kiva Zip borrower Anna, owner of Anda Piroshki
Kiva is truly thankful for the support we received on such a memorable day. Mr. Farrell couldn’t have said it better: “The opportunity is to get involved in your community as a lender is real.” To help support small businesses in your community, make a loan today on Kiva Zip!
Want to hear more? Watch the video of the Budget and Finance Committee meeting here!
Photos courtesy of Zach Land-Miller. ...(continued)
Pictured: Man performing Muslim prayers while waiting for the terrorist siege to end
The media hype may be winding down but many of us here in Kenya are still shaken by the Westgate terrorist attack. While my own experience may not be as compelling as those in the news, it has left me with a deeper compassion for those who live in constant fear.
Early afternoon Saturday, September 21st, I was sitting in a seminar at the Storymoja Literature Festival at the National Museum of Kenya in Nairobi when my friend leaned over to show me a text message she just received from our new roommate, Julia.
“Shooting at Westgate call police.”
At first we didn’t think much of it. Armed robberies happen from time to time in Nairobi and we figured this would pass and Julia would get out safely. Plus, there’s no real 911 in Kenya, so what could we do? We texted back that she should come to the museum for the next lecture.
“I’m stuck here,” Julia wrote.
Had we known what was really going on, that armed gunmen from the Somali terrorist group Al-Shabaab had stormed the mall, I’m sure we would have reacted differently. But we had no idea and continued listening to the speaker on stage.
Soon, however, we got a sense that things were worse than a robbery. Our cell phones buzzed with messages asking us if we were okay, and telling us to stay away from Westgate. As with many people in the seminar, a mix of upper class Kenyans and expats like me, Westgate was our go-to spot for household items, free wi-fi, happy hour and frozen yogurt. I had even planned to meet a friend there that morning before going to the museum, but he got stuck in traffic and I went to the festival early instead.
An hour later, we still didn’t know the extent of the chaos unfolding at Westgate. At a poetry panel, an MC announced the absence of one of the speakers, a famous Ghanaian poet named Kofi Awoonor. In the coming days, we’d learn that Awoonor was shot dead in the mall.
By the end of the panel, word of the massacre had spread. I had messages from Kiva staff in San Francisco, where it wasn’t yet 8 a.m; they were doing a roll call. The event’s organizers told everyone to go home and stay inside. The remainder of the festival was canceled.
But we were hesitant to head back. Westgate was only a kilometer from our apartment. Our usual taxi driver came to get us. He is based at Westgate and was there when the gunman arrived. He was able to escape right away, but two of his colleagues were killed. I couldn’t believe he was working.
Fortunately, Julia texted us that she had also gotten out and was already safe at home. On the way to meet her, we picked up provisions for the rest of the weekend, just in case. At home, we found her sitting on the couch, shell shocked. We surrounded her with hugs, snacks and whiskey until she was ready to recount the details of a terrifying afternoon.
“I was about to go to Nakumatt to find bedsheets,” Julia said flatly, “but I didn’t want to carry them around, so on second thought I took a look at some other shops.”
That second thought may have saved her life. Nakumatt is where Al-Shabaab supposedly set up camp and killed many, but when the shooting started, Julia was across the mall. She ducked into another store and the owner pulled down the security gate. They stayed there for five hours, listening to screaming and gunfire, until a security team rescued her.
Pictured: Soldiers about to storm the mall
By 8pm, after calling everyone we knew to make sure they were okay, all six of us roommates plus a friend visiting from upcountry were together. We stayed up late into the night squeezed on the living room couch. We just sat there, watching the death count climb on Twitter. In the background we heard occasional gunfire, and later, explosions, the whole time haunted by the thought that it could have easily been us.
On Sunday, we were shocked the siege was still going on. All day, military helicopters and drones circled the neighborhood. We debated if it was safe to go out for food. Eventually, some of us ventured down the street to buy vegetables.
That night, we opened bottles of wine, cooked a big meal and played endless games of Taboo, managing to distract ourselves a bit. But even seven peoples’ laughter was interrupted every so often by the battle sounds outside.
On Monday morning I woke up before daylight to a roommate sobbing. That’s when the reality of this nightmare really hit me. Her ex-boyfriend, who had been missing since Saturday, was confirmed dead in the middle of the night. The last time anyone had heard from him was an hour after the shooting began. He was in Nakumatt’s meat aisle and had called a friend to tell him where he was hiding.
“There are people killing people in here,” he said.
That afternoon we went up to the top floor of our apartment building. From there we could see a tornado-like plume of black smoke coming from Westgate. I got the same tight-chested, falling-fast feeling that I did on 9/11.
Pictured: View from my apartment
The streets of our neighborhood were empty. We took a taxi to a popular outdoor Indian food court nearby where we were the only customers. I talked to an ice cream shop owner I know and asked if he had any business that day.
“No,” he said. “We’re packing up now. You should stay home, too.”
I went back to my apartment. The helicopters kept coming. I didn’t leave again until Thursday. I tried to work but was too distracted by the crying and the blasts and the drones. I became obsessed with the news and didn’t feel like talking to anyone back home. I wondered how life would be after this.
It ended suddenly, as if it never happened. The death count officially capped at 62, though from what we heard on the ground it was actually more in the hundreds. The media switched stories. The emergency blood drives and free counseling in Uhuru Park packed up. I went back to work, but no one else seemed sad. Now, weeks later, traffic has returned to the main roads, but every time a car backfires my heart jumps.
I’ve always known that violence like this happens in places like Somalia, Iraq, Pakistan, or Sudan. But until Westgate, I never knew what it actually feels like to live in that environment, to think that I might die on the way to lunch. To hear these sounds and think, are they coming for me?
Photo credit: Ian Cox ...(continued)
Much of Kiva Zip's success comes from changes we've made to our direct-lending model after iterations of experiments and the learnings. As we continue to improve, we will update the Zip community through blog posts, emails, and social media, among other sources.
Most recently, we have updated our Frequently Asked Questions to address conversations within the Zip community around risk and delinquency management, guidelines for using the Conversations tab, and our stance on giving refunds. Below is an excerpt, and you can read them in their entirety on our FAQs page!
- Loans are marked as delinquent when a borrower has paid back less money than owed to date, as indicated on the borrower’s repayment schedule. Loans are considered to be in default after 180 days has passed since a borrower has made a repayment.
- When loans are delinquent, borrowers and Trustees are expected to provide frequent updates to lenders about their business and the context around the delinquency.
- The Kiva Zip team has internal processes for managing delinquent loans. We are continuously striving to develop, analyze, and improve these processes. For more information on our delinquency management protocols, please see this blog post (as of October 2013).
- The Kiva Zip team may post updates to lenders on borrowers’ conversations tabs from time to time, but due to resource constraints, we cannot commit to doing this regularly for every loan.
- The Conversations Tab on each Kiva Zip loan is for borrowers, lenders, and Trustees to have honest, respectful, and meaningful dialogue about the opportunities, pitfalls, and progress of a borrower’s loan.
- Appropriate subject matter includes updates about the progress of the loan, the borrower’s business, or Trustee; endorsements of the borrower or Trustee; questions to the borrower regarding the viability of his or her business plan; advice or feedback regarding the borrower’s business plan; and messages of goodwill or appreciation.
- Inappropriate subject matter includes topics that are irrelevant to the loan and the borrower’s business, which includes general feedback about Kiva, Kiva Zip, or any Trustees that are not specific to that particular loan; suggestions to the borrower that they do not have to repay the loan or can pay at a different repayment schedule than the one listed on the loan profile; degrading, threatening, or disrespectful language to any individual or group; and the contact details of a person other than yourself.
- The Kiva Zip Team reserves the right to remove conversations posts that violate these guidelines. Frequent violation of these guidelines by a single user will lead Kiva Zip to freezing the user’s account.
- Given the risks involved with direct lending, we commit to reviewing each loan and Trustee through a standard process developed by the Kiva Zip team and to reviewing our processes periodically in order to improve our model. Still, due to the uncertainty of many factors that affect a loan’s repayment, it is difficult to predict when one will fail to be repaid.
- The Kiva Zip team will not refund a lender’s loan purchase under any circumstances. This includes the delinquency or default of a borrower, poor performance of a Trustee’s endorsements, a lack of updates and / or Conversations post by the borrower, Trustee, or Kiva Zip, and the suspension of a Trustee or borrower from Kiva Zip due to changes to Kiva Zip’s risk management policies.
by Daniel Jung and Sarah Tait
This is Part 1 of a three part series on Kiva Zip’s risk management philosophy, policies, and procedures. Part 1 covers delinquency management. Part 2 will cover our borrower and Trustee review process. Part 3 will cover how lenders can participate in risk management.
Kiva Zip aims to expand access to capital for entrepreneurs that have been locked out of the traditional financial system. By providing microloans to small businesses that even microfinance institutions (MFIs) often deem too risky, we’ve lent to borrowers who were unable to fund a promising start-up, denied funding because of minimal credit histories, or needed to turn to self-employment after losing their jobs.
We believe the social impact of Kiva Zip has been enormous, and we’ve been able to achieve this by relying on social underwriting - borrowers enlist Trustees to vouch for their business and character. While this model has shown great promise in reaching financially excluded populations, overcoming the increased risk of this new lending model has proven to be a tough challenge.
Delinquency Management - Transparency and Experimentation
One of the most common questions we receive is how we address borrowers that are not paying back on time. All financial institutions are wary of the many risks involved in lending, and Kiva Zip is no different.
Our first step is to be as transparent as possible.
For borrowers and Trustees, we set the expectation that the borrower must repay in full even if his or her business fails. We do not allow borrowers to walk away from their Kiva Zip loan by declaring bankruptcy. In addition, borrowers and Trustees must complete a profile for our website where their picture and business credentials are displayed to our lender base. We link to the business’ website and social media when available, thereby tying the performance of the loan directly to the reputation of the business.
Our second step is to experiment aggressively and to collect data rigorously.
When Kiva Zip first started in November 2011, our team had almost no experience in delinquency management. On the Kiva.org website, field partners maintain relationships with borrowers and are ultimately responsible for repayments. Without being able to rely on field partners, the Kiva Zip team has taken an iterative approach to developing ways to deal with delinquencies in an efficient and ethical manner.
In the US, 56 out of 261 borrowers who are repaying their loans are currently delinquent. Over 80% of those delinquent borrowers are still making payments. This usually indicates that the borrower fully intends on repaying the loan but has faced technical difficulties or temporary cash flow problems. An advantage of Kiva Zip loans is that because they are 0% interest, borrowers do not fall into deeper levels of debt as they miss repayments. It’s been enormously helpful to many of our borrowers that have gone through seasonal challenges, have faced family or medical emergencies, or are waiting for payments from large purchase orders.
The relatively small number of delinquent borrowers in the US allows for our team to take a hands-on approach to delinquency management. We reach out to every single delinquent borrower on a weekly basis for updates. With borrowers that are consistently delinquent, we try to stay in direct contact through emails, social networks, phone calls, and text messages, though we’ve found that communicating through social networks and text messages is most effective. We encourage borrowers to update their lenders with context around their delinquency, and enlist Trustees to help borrowers manage their cash flows.
In Kenya, 155 out of 424 borrowers who are repaying their loans are currently delinquent. We believe this greater ratio of delinquent loans can be attributed to the fact that repayment terms for Kenyan loans are shorter and have weekly repayments. Because our Kenyan borrowers typically have sporadic cash flows, it is not unusual for them to fall delinquent multiple times and still recover. Again, the 0% interest loan has helped to keep delinquent borrowers repaying in full.
With this high ratio of delinquent loans and our limited resources, in addition to the logistical difficulties of operating in Kenya, the Kiva Zip team does not always follow up directly with these borrowers. Rather, our team has established a system of automated text messages that reminds borrowers of their obligations and incentivizes them to repay. We do, however, stay in close contact with Trustees. Trustees are required to reach out to any borrower who is more than 3 weeks delinquent and to submit an action plan that re-commits the borrower to repaying the loan over a longer time frame.
Even though delinquency management has been an enormous challenge, we have witnessed steady improvement. In Kenya, the repayment rate has risen to over 91%, and in the US, the repayment rate has stabilized around 85%.
We believe our efforts have the potential to revolutionize financial services across the world. In almost every lending institution, delinquency management can be a time-consuming and expensive process. Often times, banks and other lenders resort to unfair methods of collecting money from their clients, or sell debt to collection agencies that have no incentive to respect the borrower’s privacy or property. Developing ways to use technology to cut the cost of delinquency management and increase its effectiveness is one the most important ways in which Kiva Zip can have a major impact.
We have disbursed over 1,000 loans to borrowers who would have never have had the chance to grow their businesses otherwise, and we are only going to improve. The Kiva Zip team has learned so much over the past two years, and those lessons have the potential to help millions of small business across the world. While Kiva Zip offers a riskier product, we are continuously improving our processes so that a much greater reward can be gained. ...(continued)
On September 17, 2013, Supervisor Mark Farrell introduced a Resolution at the Board of Supervisors that aims to create a new public private partnership between the City of San Francisco and Kiva. This relationship will enable the City to act as a Kiva Zip Trustee, allowing it to identify and endorse entrepreneurs and small businesses who could qualify for a loan on Kiva Zip's platform.
Pictured: Supervisor Mark Farrell - District 2
Mr. Farrell became the first California elected official to act as an individual trustee last month and has since endorsed his first borrower, Patrick. Patrick and his partner Diane own and run the Abundant Market, a gourmet shop in the heart of Pacific Heights that is inspired by Patrick's Parisian upbringing.
Patrick immigrated to San Francisco 20 years ago and dedicated his career in the food and hospitality industry to providing his community with the highest quality food. There are numerous other entrepreneurs just like him that need access to capital to start or grow their businesses. Some can be found here, but Kiva Zip and Mr. Farrell seek to reach many more through this partnership with the City.
Pictured: Patrick, co-owner and operator of the Abundant Market
The Budget and Finance Committee will vote on the Resolution on Wednesday October 9 at 10:15 AM PST. Kiva Zip invites the local community to join them at City Hall to show their support! Mr. Farrell will introduce the Resolution, and former borrowers and trustees are expected to present on their experience, as well.
As Mr. Farrell expresses, "Our small business community is the backbone of our local economy here in San Francisco, and when they win, we all win and continue to move forward together as a City." ...(continued)
As I sank into the plush seat on the overnight bus toward the Kenyan coast for the first time, I let out a sigh of relief. Nairobi, aptly dubbed "Nairobbery" by locals and expats for the high number of muggings, break-ins, and carjackings, was starting to wear me out.
"The coast is different," my regular taxi driver had told me. "People aren't as stressed out, and they enjoy life."
It was true. Maybe it was the lingering humidity or the pristine beaches, but people sauntered through the streets in Mombasa as though to fill the senses with the salty air and the quiet buzz of the ubiquitous tuk-tuks. There was a sense of community and intimacy that I hadn't quite experienced yet upcountry, akin to the "Southern charm" back in the States.
From Mombasa, I traveled two hours up the coast to Malindi, a small beach town accessible via a smooth highway that cuts through sisal plantations and majestic baobab trees. The landing site of Portuguese explorer Vasco da Gama, Malindi now hosts hordes of Italian transplants and tourists (and purportedly, the Italian Mafia and fugitives).
I was supposed to meet Catherine, a borrower endorsed by a Kiva Zip trustee called Botanical Treasures that sells health products in Kenya. Catherine greeted me outside of the local Nakumatt, a supermarket chain comparable to Wal-Mart with its wide range of items, offering bikes to bananas and everything in between. I wasn't expecting to see anyone else, but she brought her husband Antony, who also happened to be a Kiva borrower endorsed by the same trustee.
Pictured: Moringa leaves
We crammed together into a tuk-tuk to their home where they process moringa oleifera for Botanical Treasures. The moringa tree is commonly grown along the coast by the locals and its leaves are prepared as part of a meal. It is only recently that moringa has been crowned a "superfood," placing it among the ranks of acai berries, quinoa, sweet potatoes, and salmon, all of which are believed to have higher than average nutritional content per serving.
Pictured: Inside the newly constructed dryer
With eagerness, Catherine and Antony showed me the sturdier and more efficient dryer they constructed with their last loan to increase the yield of moringa leaves. The new dryer maintains an optimal humidity to ensure that the leaves are not too dry or too moist for packaging. When the leaves are ready, they are shipped to a processing plant in Nairobi to be grounded into powder form. The powder can be added to drinks for a quick nutritional boost, or incorporated into other health products.
Catherine and Antony believe that the benefits of moringa are just catching on and that demand will increase even more in the near future.
Pictured: Catherine, Antony and their four children
I cozied up on the living room sofa, meanwhile trying to tune out the telenovela blaring in the corner, and began asking a slew of questions as part of Kiva's borrower audits. These audits verify basic information about the purpose of a Kiva loan, i.e. what it was actually used for, and help us to collect data on social impact factors such as job creation, personal welfare, etc.
For example, some common questions we ask are, How many workers have you employed since receiving the loan? How many children can you afford to send to school? How many meals do you eat per day?
There was no doubt that Catherine and Antony had had major improvements in their personal lives since receiving their last loan. They moved to a bigger house. They switched their kids from public to private school. They ate bigger and more nutritious meals. They were feeling happier and less stressed, which I could guess from Antony's youthful appearance despite raising four active children.
But their story wasn't unique to the impact stories that we get to hear and share about as Kiva Fellows.
"Do you want to see our church and school?" Antony asked after the interview.
Pictured: One of the classrooms
It turns out that Catherine and Antony, both pastors at their church, used the profit from their moringa business to operate a nonprofit school for 67 orphan children in their community.
They currently offer kindergarten to 5th grade, but the students never really graduate from the school--instead, a new grade level is added every year. They employ four full-time teachers and provide all the supplies for the students.
Guess how big their loan was? $300 USD.
Pictured: Recess time (Courtesy of Antony)
Who would have imagined that lending as little as $5 to Catherine and Antony's superfood business indirectly supported orphan children's education?
That is the power of Kiva Zip. Whose life can you impact today? ...(continued)
On Tuesday October 8th, Kiva co-founder Matt Flannery will be in Little Rock, Arkansas, to speak at the joint Winthrop Rockefeller Institute-Clinton School of Public Service conference on social entrepreneurship in Arkansas: "Social Entrepreneurs: Doing Well By Doing Good".
The conference will be hosted in the William J. Clinton Presidential Center from 3:00 PM - 6:30 PM. Kiva has operated since 2005 with the purpose of funding entrepreneurs and small businesses around the world with crowd-funded, zero-interest loans. During this time, Kiva has funded over one million borrowers located throughout 72 countries. In 2011, Kiva launched Kiva Zip with the intent of applying its successful model to the United States. In 2012, Kiva Zip came to Arkansas.
Pictured: Matt Flannery, CEO and Co-Founder of Kiva
Though Kiva Zip only recently made its way to the state of Arkansas, the impact of its presence has already been felt deeply by the state's entrepreneurial community. Kiva's crowd-funded, zero-interest loans have helped to support a wide array of Arkansans looking for financial support. Borrowers have come from an array of different occupations in Arkansas, including farmers, artists, authors, restaurant owners, and many more.
To date, Kiva Zip has funded 41 borrowers within Arkansas (some having borrowed multiple times). Furthermore, there have been 26 trustees who have endorsed borrowers, allowing them to apply for loans through Kiva Zip. This community has made it possible for small businesses to reach new heights within local communities. However, they didn't get there by themselves.
Lenders play a prominent role in the Kiva Zip model. Without them, loans could not be funded. The individuals that choose to go online and give their own money to see someone else's dream come true are the driving force behind the Kiva Zip program. Within Arkansas, their influence can be clearly seen. Approximately 1,690 lenders have contributed funds to projects in Arkansas. These individuals have lent from all over the world, including Australia, Germany, China, and Finland. These connections not only act as brand ambassadors for the borrower, but also provide moral support and a sense of confidence for borrowers.
Though there has been considerable progress already made in Arkansas through Kiva Zip, there is still work to do. There are still many entrepreneurs and small business owners in the state that need help.
Kiva Zip is currently looking to expand the community of borrowers, trustees, and lenders in Arkansas in order to support development in many different types of business communities and to many different types of borrowers. In order for this to happen, borrowers, trustees, and lenders must be engaged within the state. One goal of the conference is to engage the Arkansas community so that Kiva Zip can expand its reach and support those in need throughout the state.
Pictured: Little Rock, AR ...(continued)
In Tucson, Arizona, the Women’s Business Center (WBC) at the MicroBusiness Advancement Center (MAC) helps start-ups solidify their business plans through providing training and technical assistance and connecting entrepreneurs to resources they may not have realized existed. For Juliana Desmond and Olivia Darling, that meant providing a business planning course and helping them find funding to grow their businesses. Their stories are unique but their aspirations as entrepreneurs share the same spirit.
Pictured: Tucson, AZ
Juliana has a love for sustainably-produced chocolate and sculpture. She knew that if she had the right equipment and packaging materials, she could scale her creations and bring her products to market. As with most small businesses, access to affordable, small loans was hard to find.
Pictured: Juliana, Jupiter's Dream
Not far away, Olivia was facing a similar predicament. She moved to Tucson in December 2012 after operating an in-home childcare facility in Memphis, TN, for 7 years. She opened an in-home program in her apartment in AZ suitable to care for 4 children but quickly realized that if she had more space she could care for as many as 10 children. Again, access to capital was a hurdle.
Pictured: Olivia, Beyond Our Dreams Child Care
After completing the WBC 44-hour business planning course with WBC Trainer Tim Bruchman, MAC connected both women with Kiva Zip, a vehicle for small businesses to obtain interest-free loans up to $5,000 that are crowd-funded, $25 at a time. This loan would help Juliana buy a chocolate temperer and molding and packaging supplies. She already had space secured in the Mercado San Augustin, but needed the equipment to get started.
Olivia needed the loan to put a down payment on a larger space and to purchase additional equipment. With 10 children and a new certification level, Olivia would more than double her monthly revenue and would be able to hire an employee.
MAC became a Kiva Zip Trustee in October 2012. MAC’s role is to identify local businesses that are appropriate for the Kiva Zip Program and to endorse them for a Kiva Zip loan, meaning MAC vouches for the borrower’s character and publicly supports her business plan on Kiva Zip’s website. So far, MAC has endorsed 7 fully funded loans, including Juliana and Olivia, and is currently working with another entrepreneur on fundraising for her loan. Support the entrepreneurs still fundraising here!
Their other endorsements include a baker, a guitar maker, an organic gardener, an animal control specialist, a sports equipment program for youth, and a mother/daughter salon. This amounts to $40,000 in new microloans and, by year-end, could be as much as $125,000.
Juliana received her funding in August of this year after just 15 days on the site, and her business, Jupiter’s Dream Chocolates, has moved into a new space and has started production. Similarly, Olivia received her funding in August after just 15 days on the site, and her business, Beyond Our Dreams Child Care, has moved into a new space, added 4 more children, and has plans to add another person to staff.
$5,000 has changed these entrepreneurs’ present and future. ...(continued)
There's a spark that runs through the office during the Kiva Fellows Program training week. You can’t help but feel it when you walk through the door. Last week was no different when the 22nd class of Kiva Fellows (KF22) came to San Francisco to learn all things Kiva and prepare for their challenging assignments. They brought with them (and left behind) a lasting enthusiasm for this impactful work before scattering to 25 different countries on 5 continents, where they’ll each spend 4 months serving a total of 54 unique Field Partners.
Kiva Fellows are cool. They are outgoing, intelligent and overwhelmingly accomplished in diverse fields ranging from consulting to dentistry to video production -- and yet they are admirably humble. Throughout the five-day training, Kiva Fellows are exposed to the intense and the silly, the polished and the rugged of Kiva culture. We simply could not operate without them.
Whether onboarding new partners on familiar turf (Nicaragua, Uganda and Armenia) or venturing into uncharted territory for Kiva (Suriname), KF22 is ready to take on the challenge and accelerate Kiva’s mission on the ground. KF22 is comprised of 35 fellows. Eight will be serving with Kiva Zip in either the United States or Kenya. They will help Kiva Zip grow and strengthen its community by working with potential borrowers and trustees. Two will be focused on generating exciting media content for our marketing team. One will be championing a new initiative to use innovative technology to improve efficiency in the field. Fifteen fellows will be paired with Field Partners. And nine will be continuing their previous fellowship and joining the ranks with the rest of KF22.
Do you want to join in on the fun and make an impact? Apply today to be part of the 23rd class of Kiva Fellows. The application deadline is September 29th, and training will take place in January 2014. Don’t miss out!
Without further ado,
we present to you,
Listed with the partners they'll be helping, and the countries where they will be working. You can find their complete (impressive) bios here.
Alex Guna - Yunus Social Business, AUCA (Germany, Albania, Kyrgyzstan)
Amy Lambert - Kiva Zip (United States)
Amy Williams - Credo, SEF, Nor Horizon (Georgia, Armenia)
Awena Lebeschu - KOMAZA, Strathmore, Honey Care, Sanergy, BrazAfric (Kenya)
Benjamin Brennan - Huatusco, VisionFund Mexico (Mexico)
Robert Luchsinger - ASDIR, FAPE, CONFRAS (Guatemala, El Salvador)
Celeste Gonda - Interactuar, FMSD, Colfuturo, CampAlto (Colombia)
Christina Magro - MiCredito, Pana Pana (Nicaragua)
David Picciao - Technology Fellow (Kenya)
Gena Jiang - Kiva Zip (Kenya)
Huyen Bui - ACE, East Meets West, FPW (Vietnam)
Immanuel Palugod - Kiva Zip (Kenya)
Kacki Kammann - Cooperativa San Jose, Banco D-MIRO, Fundacion Alternativa (Ecuador)
Kaleisha Stuart - Kiva Zip (United States)
Katie Kerr - Tujijenge (Tanzania)
Katrina Gordon - Kiva Zip (Kenya)
Kristrun Gunnarsdottir - Kiva Zip (Kenya)
Liz Fish - Media Fellow (Ukraine, Armenia, Georgia)
Lucy Prom - One Acre Fund, Evidence Action (Kenya)
Maryse Gbeassor - UIMCEC, BRAC Liberia (Senegal, Liberia)
Michelle Boyd - WSDS, People’s Forum, Mahashakti Foundation (India)
Michael Mazur - Media Fellow (Philippines, Cambodia, Vietnam, Indonesia)
Nick Quintong - Kiva Zip (Kenya)
Ron Beaton - PT Ruma, YSBS, TRM (Indonesia, East Timor)
Shane Fahy - Kiva Zip (United States)
Shelley Graner - BJS, Cashpoor (India)
And a huge thanks to the fellows who are serving second (or third) terms:
Jeff Nelson - Microfinazas Prisma, Edpyme Alternativa (Peru)
Jenny Prosser - UpEnergy, Impact Carbon, Grameen, Fenix (Uganda)
John Winslow - VisionFund Cambodia, Kredit, HKL, MAxima, iDE (Cambodia)
Matt Bastone - Kiva Zip (Los Angeles, United States)
Michelle Schenck - Maharishi Institute (South Africa)
Nelleke Hennemann - SEVA (Suriname)
Parijat Tanna - Kiva Zip (Oakland, United States)
Taylor Whitfield - Kiva Zip (Kenya)
Theresa Wilson - Kiva Zip (New Haven, United States)
There is so much more to lending than just sharing our money.
From the beginning I have always wanted to personalize the lending process. This makes it more meaningful for me. So, whenever I make a loan, I take time to look at the borrowers' picture and feel my heart connect with them. This moment of feeling my connection has always been very, very important to me. I wouldn't lend without it.
When I took a look at Kiva Zip last year, I noticed the possibility of direct communication between borrowers and myself. After I made some Zip loans, I read my borrowers' updates, made some replies, and started to see some new possibilities. In the U.S., I have seen borrowers inviting lenders to their shops and special events, borrowers and lenders sharing ideas and information, and I have seen collaboration among borrowers with similar businesses.
This past spring, I started to make a lot of Zip loans, especially to Kenyan borrowers. In April one of my Kenyan borrowers said:
"Thank you Mr BOB! May Almighty GOD bless you. I thank GOD for giving me a new friend from far away who is willing to help me. That loan will help me very much in preparing my garden and buying fertilizers. Thanks. Yours Charles."
Charles truly touched my heart, and we started a beautiful dialogue that has continued for many months now, even after his loan has been fully paid back. His kind words have given me so much inspiration.
Pictured: Charles, Fresh Produce Company
I have now shared dialogue with many dozens of borrowers. We have shared prayers for each other, good wishes, kind words and more. Their gratitude for these small loans has reminded me, again and again, how fortunate I am that I can make these loans. I feel blessed to receive prayers from borrowers like Nashon:
"You came as angels for me and i will always pray for your happiness."
Pictured: Nashon, Hightech Printing and Design
So, now I feel that something magical is happening through these dialogues on Kiva Zip. As one trustee described it:
"It's so amazing to find friendship and connect with people who believe in your business even without physical meeting."
So, while borrowing and lending money on Kiva Zip is lifting up many businesses, I sense that we are creating a community that can and do share much more. Join the community by making a loan! Then converse with the borrower, other lenders, and the trustee by clicking on the Conversations tab.
Michigan Corps believes the ‘next big thing’ in Detroit is actually the combination of a thousand little things: the product of a thousand lenders, contributing $25 at a time, to help entrepreneurs realize their dreams and transform the city.
The projects Michigan Corps designs and launches often make use of the web, and all of the new ideas that come with many individuals - our ‘Corps’ Network - coming together to collaborate. By taking advantage of grassroots movements and the web, we’re able to launch accessible, new opportunities to connect those thousands of little dots and make a big impact.
Campaigns such as the nation’s first state-wide competition in social entrepreneurship, the Pure Michigan Social Entrepreneurship Challenge, have benefited from this grassroots approach to social change. Kiva Zip also exudes the sort of dynamic engagement Michigan Corps looks to spark day in and out. By teaming up with Kiva Zip, we’ve been able to reach out to small businesses in two Michigan cities with some of the highest concentrations of poverty in the U.S. – Detroit and Flint, and bring Michigan citizens everywhere alongside them as lenders and champions for their success.
Through our Kiva Detroit and Kiva in Flint initiatives, Michigan Corps works with multiple groups throughout the state including business incubators, churches, cultural organizations, financial institutions, community development corporations and much more. What started as a grassroots effort to channel capital and community support to Detroit’s emerging small businesses has turned into something much bigger.
We use Kiva Zip as a tool to spread awareness about socially impactful businesses and projects, as a support mechanism for Detroit and Flint entrepreneurs looking to set up shop in the community, and as a way to rally individuals at large around entrepreneurs with extraordinary ideas like Sebastian’s Social Club Grooming Company in Detroit. For Sebastian, his grooming shop is a way to break down racial divisions in Detroit by using the space as a social hub for people of all backgrounds. Sebastian also learned that the hair he cuts has the ability to help trees grow through composting and even help in the clean-up of oils spills. He used a loan from Kiva Detroit to buy his first batch of inventory, make some changes to the shop, and promote the mission of sustainability.
Pictured: Sebastian, The Social Club Grooming Company
Our relationship with Kiva Zip has deepened the work we do in communities across our state and has helped us build a culture that is welcoming to much-needed entrepreneurial endeavors in places like Detroit and Flint. We believe that celebrating small businesses goes a long way in building healthy, vibrant communities. That's why our invitation to the public to nominate entrepreneurs, lend to those entrepreneurs, and champion their overall success through Kiva is such an important piece of our mission.
Inspired by what’s happening in Michigan? Join the Corps! We’d love to keep you informed of all sorts of neat opportunities to get involved and make a difference. Want to help an entrepreneur like Sebastian realize his dreams and revitalize his community? Visit ...(continued)
Kiva Zip formed a key relationship last year with the startup, EarlyIQ, which provides Kiva Zip with an efficient tool for mitigating risk. We recently interviewed Steve Yin, the CEO of EarlyIQ about his company, his thoughts about Kiva Zip, as well as his outlook on the future of the crowdfunding industry.
How did the Zip/EarlyIQ affiliation come about?
We were first introduced to Kiva Zip by a mutual friend back in October 2012. At the time EarlyIQ was a newly-funded startup and Kiva Zip had been looking for a tool to help mitigate risk.
What have you learned from working with Kiva Zip?
Kiva Zip is a unique crowd-funding platform from so many perspectives. The uniqueness challenged our thought process and helped us fine-tune our offering. We rolled out a pilot with Kiva Zip in January of this year and have been running commercial report cards continuously ever since. We've learned a lot over the past 7 months working with the Kiva Zip team. Much of that learning has been put to work in subsequent releases of our product.
One of the biggest impacts that working with Kiva Zip has had on our offering is forcing a very compact and streamlined application process. Our goal was to make the entire application process take less than 5 minutes.
The streamlined approach carries through to all of our offerings. When prospective partners are first introduced to our product, the typical reaction is amazement that we're able to deliver such comprehensive reports with such a compact application process.
We've also ramped up a huge learning curve relative to back-end data integration and automation. Many financially under-served people and/or companies don't have a very large digital footprint, while others have very disconnected and inconsistent footprints. As you can imagine, that makes what we do a challenge.
Tell us about your vision for Early IQ, and how the company was founded.
We want to help lead the early-stage investment industry in its march online because we believe over time that the internet will help revolutionize this final financial frontier. And we believe a critical element to the success and growth of any capital market is true transparency and trust in the market. This is especially true in the nascent world of early-stage private capital where facts and figures are scarce. Ultimately, facilitating these markets will help business owners, investors, and the economy.
We founded Early IQ in early 2012 when my co-founders and I were struck by the lack of consistent and reliable information about private companies looking to raise funds. We asked ourselves, "How could we know that the investment was real - not a scam?" If you want to invest in a public company, you'll be quickly overwhelmed by the sheer amount of readily available information. If you want to invest in a private company, however, you're on your own for the most part.
We started with the idea to help prevent fraud in early-stage financial markets. From that kernel we grew our vision beyond merely preventing fraud and recognized the need for truly objective, third-party information to help facilitate these online investment decisions. Our vision of the industry "trustmark" was born.
How does Early IQ work?
It's actually pretty simple. Entrepreneurs answer a few quick questions on our site or our partner's site. We then validate the responses with various data sources.
Based on comparing the responses and the information from our data sources, we create a "report card" on the company. We're an online-hosted platform so everyone involved - - lenders, borrowers, administrators, other third parties, all access the same information the same way through a browser.
By having a singular view, there's no question about what information each party has access to because all parties involved see the same information.
Who is your favorite Kiva Zip borrower?
Really? I have to pick one? No kidding, I can spend hours reading all the great stories and spirit on Kiva Zip. So it's hard to pinpoint just one. Of those that are currently looking for a loan, I like the guys at Milk Cult because they seem to have a great attitude and are filling an interesting niche. Plus, Corey at Juicemasters has a great story and since I'm originally from St. Louis, well I've got to support his effort.
Note: At time of posting, these loans were fully funded. See additional loans that are still fundraising here!
Pictured: Corey from Juicemasters Fresh Juice and Smoothie Bar
Pictured: Patrick Griffith and Ed Cornell from Milk Cult
What about Kiva Zip are you particularly excited about?
Kiva Zip is super unique in that you can see and sense the positive impact that peer-to-peer lending can have on so many people in so many places.
Surfing Kiva Zip is unlike surfing any other funding site because it's all very real and very connected. There's a direct connection between the $25 loan and the entrepreneur's ability to take the next step in his or her business. Anyone who believes in entrepreneurial spirit has got to see this and appreciate the efforts of everyone involved. It's really powerful.
What do you think are the biggest risks faced by crowdfunding sites like Kiva Zip?
Overregulation and growing pains. Really, if you think about it, those are risks faced by the industry overall and therefore leaders like Kiva Zip. Overregulation could stifle the nascent industry and not being proactive about addressing growing pains could jeopardize the ecosystem.
Crowdfunding is brand new compared to established financial markets, all of which are regulated. However, crowdfunding is a new model so to enable growth, hopefully we don't simply press the "copy button" to duplicate legacy regulation. As long as industry participants are not only responsive but proactive about addressing issues as they arise, then I think leaders will emerge.
What about fraud risk? Well the reality is the potential exists in any financial market, if left unchecked. Clearly we believe by using tools such as the ones we provide, the crowdfunding space could easily be less prone to fraud than other more established financial markets. The more transparent the ecosystem, the lower the likelihood of actual fraud.
What do you think the future holds for the crowd-funding industry in the U.S.?
Obviously I'm bullish on the industry. Deloitte predicts the US market to reach $3B in 2013. And our own projections indicate growth up to, and perhaps beyond, the size of current angel and venture capital markets.
The immediate future will no doubt be filled with growth and the associated growing pains like I mentioned before. We'll see portals come and go. But over time, like in any market, the strongest will thrive.
More importantly, we'll see tens of thousands of businesses get access to the capital they need to grow with the resulting millions of jobs created. And we'll see this happening not just in pockets of historically entrepreneur friendly coastal areas, but spread throughout main-street America. I think ten years from now crowdfunding will be the "usual" for entrepreneurs and investors alike.
Steve Yin is the CEO and co-founder of EarlyIQ, Inc, a San Diego-based hosted information and analytics company focused on risk mitigation in early-stage capital markets. His career has been focused on technology - primarily software and information - in varied industries, from internet security to state lotteries. Outside of work, he enjoys all outdoor activities and "anything with an engine".
Pictured: EarlyIQ CEO Steve Yin ...(continued)
In a city where the lights are literally going out, it's good to know that there are some glimmers of hope. For Detroit, which filed for bankruptcy mid-July, and where nearly 40 percent of the city's streetlights remain dark, that glimmer is innovative programs, like Kiva Zip and Michigan Corps, that are committed to creating jobs through funding small businesses and entrepreneurs who are not eligible for traditional small business loans.
For a city that was once the fourth largest in America - driving progress through the booming automobile industry, the recent abandonment of big business and the off-shore exodus of factory jobs has been devastating. While it felt like Detroit might be left alone in a pulverized economic aftermath, some aren't ready to throw in the towel just yet.
Kiva Zip, along with organizations like Prosper and Lending Club, make it possible for a small business owner, who may have trouble accessing credit due to the risky or new nature of the business, lack of collateral, or poor credit history, to obtain a loan without going through traditional funding sources. These companies offer peer-to-peer lending services that operate on different credit checking criteria and lending platforms than traditional financial institutions.
Not only does Kiva Zip provide a lending source to entrepreneurs and businesses that are underserved by traditional lenders, it also gives other members of the community - from individuals to corporations - the opportunity to directly invest in their community and be part of the solution for struggling cities and neighborhoods.
Kiva Zip is a vehicle for small businesses to obtain interest-free loans up to $5,000 that are crowd-funded, $25 at a time. It might seem similar to websites like Kickstarter or AngelList, but Kiva Zip is more laser-focused on helping grow small businesses that might be left out by the traditional funding bureaucracy.
Kiva Zip's trustees include corporations, small business development groups and community organizations that work to help disabled veterans, the homeless and even parolees. Trustees provide assistance and support to entrepreneurs or businesses that they have endorsed for a Kiva Zip loan.
In June 2011, Kiva partnered with Detroit-based organization Michigan Corps to launch Kiva Detroit, a grassroots effort to channel capital and community support to Detroit's emerging small businesses through Kiva's platform. Michigan Corps continues to lead Kiva Detroit as part of the organization's mission to "empower Michigan citizens globally to use the web and more to lead change in our home state."
Michigan Corps has since worked closely with Kiva Zip to invite Detroiters, and those passionate about Detroit's revival, to invest directly in the launch and growth of dozens of community-minded small business entrepreneurs throughout the city. Recently, Michigan Corps extended the Kiva Detroit model to Flint, a city located about an hour from Detroit, to get citizens involved as champions of local business and invigorate the community.
"The launch of Kiva in Flint extends a unique opportunity to nurture community pride and engage citizens in contributing to positive developments across our city", Flint Mayor Dayne Walling told mlive.com. "It's great to have a new way to bring our community together in support of small businesses in this exciting way."
Two of the first five loan recipients include Fannie Lucille, a fashion design company, and Max Beef, a restaurant located in a struggling area of Flint. Both companies were endorsed by Michigan Corps and plan to use their microloans to take their businesses to the next level and become part of Flint's economic recovery.
Pictured: (L) Kiva Zip Borrower Kala Wilburn (R) Kiva Zip Borrower Issa of Max Beef
Back in the fading streets of Detroit, several businesses have already received a lifeline from funding through Kiva Zip. Puzzle Piece Theater, an experimental community theatre, was the first Detroit recipient of a $5,000 crowd-funded loan from Kiva Zip. And it's these kinds of reciprocal community connections that Kiva Zip and Michigan Corps hope will make a lasting difference as Detroit struggles to regain solid footing after years of economic downturn.
Pictured: Puzzle Piece Theater
Not only do crowd-funded microloans help entrepreneurs and business owners, but there are positive side effects for local communities in the form of job creation and economic stimulation. And not only do they put their money where their mouth is, but Kiva Zip loan recipients have an 85.9 percent repayment rate - proof that their system is working.
Pictured: Downtown Detroit.
While Kiva Zip has the power to initiate change, create jobs and make a difference for struggling former giants of the American Dream like Detroit, the best part about the program is that everyone can participate. If you have a passion for energizing local communities and want to learn how you can endorse a business or help by loaning $25 to your favorite Kiva Zip entrepreneur, visit zip.kiva.org.
Pictured: Downtown Newark, NJ
When I was first assigned to Newark for my Kiva fellowship, I didn't know what to expect. I live in Manhattan and up until that point the only time I had been to Newark was to go to the airport.
My first introduction to the real Newark was through a group of local organizations that serve as trustees with Kiva Zip. Kiva Zip trustees are responsible for sourcing Kiva Zip borrowers, reviewing their business and personal finances, vouching for their character, and publicly endorsing them on the Kiva Zip website.
I met with a number of trustees in my first couple of weeks as a fellow and I was stunned by the generosity shown by all of the staff in welcoming me to the city. I realized quickly that there is a deep sense of community within Newark and all of the organizations associated with Kiva Zip are both well connected to and supportive of each other.
Our trustees represent a wide variety of organizations with varying services; however, a mission to support Newark's growth through the innovation of entrepreneurs unites them all. In a city that rarely receives positive press, I was happily surprised to see a burgeoning start-up and small business community and realized that the assistance that our trustees provide to these entrepreneurs is invaluable.
A borrower once told me that the trustees are "bridging a very big gap" and as I learned more, I saw how true this was. Many of the entrepreneurs I met had struggled financially for a long time and were only further disheartened when they brought their innovative business ideas to banks and other financial institutions, only to be turned away for the loans.
Here is where our trustees come in: providing support in the form of technical assistance, training sessions, credit-builder programs, business consulting, and perhaps most importantly, through a boost in confidence. By partnering with Kiva Zip, trustees are able to be even more impactful as they can pair their programs with accessible, affordable capital.
The relationship between an entrepreneur and their trustee is one that lasts well beyond the disbursal of the Kiva Zip loan and every Kiva Zip borrower I have ever talked to has expressed their profound gratitude for their trustee organization.
In Newark where often the challenges faced in creating or expanding a business are great, I am confident that the powerful (and growing!) network of Kiva Zip trustees will serve to create a strong foundation for a vibrant and thriving small business community and economic future in Newark.
Here is a list of our trustees in Newark that have endorsed Kiva Zip entrepreneurs:
Forward Ever Sustainable Business Alliance
The Institute for Entrepreneurial Leadership
Greater Newark Enterprises Corporation
The Intersect Fund
The Phat Startup
Jalima & Associates
Rising Tide Capital
For more information on our trustees or how to become an involved as a Kiva Zip trustee, click here. ...(continued)
It's a warm Sunday afternoon and I'm hiking in a volcanic gorge just outside Hells Gate National Park in Naivasha. A slender Maasai man named Joe is guiding my friend and I up the steep, slippery walls of hardened lava. After climbing a steep cliff, we sit down at the top to take in a view of Kenya's stunning Rift Valley. Joe asks us for how long we are visiting.
"I'm here for awhile," I reply. "I'm working with a company that helps people get loans."
Not surprisingly, Joe's face lights up. He wants to know more. I explain the Kiva Zip model of trustees endorsing borrowers instead of MFIs and immediately he starts telling me about the entrepreneurs in his village without resources to grow. I already know that he comes from one of the most famous indigenous herding tribes in East Africa, one that has been forced off their land and often reduced from cattle farming to selling crafts at tourist sites. Maasai continually deal with harassment from police, government, and neighboring tribes. What I don't know is that Joe is a decision-maker in his community and has started educational programs to aid its development.
What could have been the usual obligatory exchange of small talk questions turns into a much deeper connection. I am no longer a tourist and he a guide. We are collaborating as leaders about basic human needs and how to improve life for those we care about. The most exciting part for both of us is that, through Kiva Zip, we have the tool to do so.
In my six months as a fellow, tasked with improving and expanding this pilot program, I have noticed a transformation in my interactions with people, especially strangers. I am always listening for what they are passionate about and how they could bring it to a global platform. When I tell them of the potential I see, it encourages them to share with me more deeply about their situations and we skip past the formal pleasantries to what is really important to them.
Despite our discussion at the end of our hike, I am still unsure whether Joe will remember me among the countless other muzungu NGO workers he meets daily. When I followup with him weeks later, though, he greets me warmly by name.
"The day we met, I told some people about these loans you talked about," he says. "We had a very good talk and look forward to participating."
Not only did Joe and I grow closer, he had also shifted the conversation in his village that night, from one of everyday survival to one of possibility; a crucial respite given the struggles they face as Maasai and hopefully the beginning of a new chapter. ...(continued)
Prior to becoming a Kiva Zip Fellow, I had not seen examples of microlending in the U.S. and initially questioned what kind of impact a Kiva microloan could have here compared to countries in which a dollar stretches much further. However, after serving three months as a fellow in Newark, NJ, I have seen first-hand the power each Kiva Zip loan has.
While creative and determined small business owners abound in this country, 3,000 of them are turned down for loans by banks every day. The need for capital is great and Kiva Zip provides a platform to meet it. Beyond the capital aspect, I have been moved by the support of the Kiva lending community and have witnessed the positive effect that participating in Kiva Zip and receiving a loan can have on the confidence and enthusiasm of an entrepreneur that has often heard "no" from financial institutions.
Back in June, the Greater Newark Enterprise Corporation (GNEC) was holding its annual Opportunities and Awards breakfast and CEO Mike Wall had planned for my Kiva table to be set-up next to where Carey M. Hamilton Sr. and his wife Jennifer would be sampling their signature healthy collard green egg rolls. Mike thought Carey's A Taste of Soul Catering LLC business would be a good fit for the Kiva Zip loan platform and I only needed to smell the collard green egg rolls to hope he was right.
Carey is a lifelong Newark resident with a passion for his city. With a full-time job and the support of his first wife, Carey began A Taste of Soul Catering in the early 1990s as a side job. When his wife became ill and passed away, Carey was faced with the challenge of supporting their two boys on his own. With this renewed motivation, Carey began investing more time into A Taste of Soul and it has grown considerably in recent years.
When I met Carey and Jennifer they explained to me that in the past year a lot of excitement had been building around their collard green egg roll. Seemingly overnight, they had grocery chains knocking at their door, hoping to carry the item in their store.
With support and training from GNEC, Carey developed a business plan to expand the business in a way that would allow him to secure purchase orders from national grocery chains. While there was no lack of passion and planning, there was a lack of capital. Without access to affordable capital, Carey was unable to move forward with plans for expansion.
That's where Kiva Zip came in. With GNEC serving as Carey's trustee, Carey applied for and was approved for a $5,000 interest-free Kiva Zip loan. Carey's loan was posted to Kiva on a Monday morning and within minutes, the contributions started to come in from lenders around the world who were moved by Carey's story and vision.
In a stark contrast, that same Monday morning saw Carey and Jennifer dealing with a crisis. While waiting at the bus stop to go to work, Jennifer was mugged and physically attacked. She had to be taken to the ER and has spent the weeks since recovering physically and emotionally.
Carey and I spoke right after the incident and kept missing each other in the days that followed. By the time we connected, five days had past since the loan was posted and it was already fully funded by a community of 116 lenders.
Carey called Kiva their "miracle" and we talked about how at the end of each trying day, he and Jen would go to Kiva Zip to check their loan to find encouraging messages from people nearby in New Jersey and around the world that they had never met. Carey expressed to me how important these words were to them as they began the healing process and felt the power of the Kiva community. We both remarked that it seemed that no matter what they were facing, Kiva Zip was a light that was buoying their spirits and giving them the confidence they needed to move forward in expanding their business.
I remember when Carey and I initially met about Kiva Zip and spoke about the crowdfunding model, he said about each lender's contribution: "If you don't treat each one like gold, how can you appreciate the end result?" I knew then that he really understood the purpose of Kiva Zip - of a community coming together to support an entrepreneur to grow their business in a way that other financial institutions would or could not. It was clear that this impact was not limited by Carey's geographical location.
Carey's loan has now been disbursed and he and Jennifer are able to move forward with the plans to expand their business. Additionally, Carey has referred a fellow entrepreneur to Kiva Zip and he hopes to serve as a trustee for her. As this positive cycle perpetuates within a community, the impact of Kiva Zip will be boundless.
We are thrilled to announce the launch of a new partnership between Kiva and Etsy!
For the uninitiated, Etsy is an online marketplace where you can purchase beautiful, handcrafted or vintage items. Artists all over the world have embraced Etsy's storefronts with gusto, taking advantage of the opportunity to reach scores of new customers online and launch new businesses that might not have been possible otherwise.
In much the same way, Kiva Zip seeks to create opportunity for entrepreneurs by connecting them directly with an online community of enthusiastic lenders who provide them with the much-needed capital that they need to launch or expand their businesses. Roughly 20% of Kiva Zip's borrowers are artisans, who often experience difficulty in qualifying for loans because they don't have the collateral required, the amount that they'd like to borrow is too small, or their businesses are considered too new or risky.
The Etsy + Kiva partnership will provide financial support to Etsy artisans by giving them access to loans through Kiva Zip and will connect Kiva artisans worldwide with Etsy's global community of artisans. We are incredibly excited that now you can both support Kiva Zip artisans with a loan AND you can also purchase their products on Etsy as a result of this partnership!
How can you get involved? So glad you asked!
Support an artisan entrepreneur: Lend to a Kiva artisan who is also on Etsy. Loans as small as $25 can help entrepreneurs start or grow their artistic businesses. Check out Lacey and Cassandra; both artisans are currently fundraising and just a hare away from being fully funded!
Pictured: Lacey, Kiva Zip Borrower, Etsy artisan, and founder of Soles Citizen Functional Footwear, a company dedicated to selling unique and fashionable women's leather sandals.
Pictured: Cassandra, Kiva Zip Borrower, Etsy artisan, and founder of Mag-Big LLC, a boutique in Portland that features the work of nearly 600 small production designers who create jewelry, apparel, house ware, craft, body care, and visual art.
Pictured: Kiva Zip borrower Steven McAlpin handing Senator Warner his own personalized walking stick.
Steven McAlpin, founder of Canes for Courage and Kiva Zip borrower, jumped on stage as Josh Sheldon from United Virginia was giving his speech, and gave Senator Warner one of his hand carved customized walking sticks with the words "Kiva Virginia" and "Senator Warner" engraved.
This was one of many exciting moments that occurred at the Kiva City Richmond launch that took place Monday, July 29th. Richmond became the 7th Kiva City in the U.S., joining other cities such as Little Rock, Newark, and D.C. and the community could not be more excited.
Political leaders, community organizations, and small business owners, all came together under one roof to celebrate the establishment of this program in their state. For me, this day was truly special, as I was able to see the tangible results of my efforts and the hard work that I put into ensuring the program reached as many like-minded organizations and helped as many entrepreneurs in need.
By the launch, a total of 15 different incredible and brave entrepreneurs from Richmond and other parts of Virginia, had been endorsed by 10 different organizations, and were posted on the site to begin fundraising. Of those, five were given tables to showcase their business, a few were highlighted through media efforts, and one, Allyson with Runway Wheels, spoke along side the other keynote speakers.
Pictured: Kiva Zip borrower Allyson Shaffier, founder of Runway Wheels, giving her speech at the launch.
It was so inspiring to see the borrowers engaging with the crowd, swapping business cards, and advocating for their businesses. They all constantly expressed their gratitude, joy, and excitement for being able to be a part of an organization that was truly helping them realize their dreams, and for getting the opportunity to participate in this event that allowed them to get the recognition they deserve and bring publicity and exposure to their businesses.
Most of these businesses have been in operation for less than two years, and four of them were completely new start ups. As many of us know, these individuals are not the most favorable candidates for a traditional microloan. Without this Kiva Zip loan, they perhaps wouldn't have been able to expand or start their business.
In Richmond specifically, there are currently no microfinance institutions serving the needs of entrepreneurs looking for just a small chunk of capital, a problem that has been brought to my attention over and over again. Kiva Zip is here to fill that gap, and hopefully with this launch, many other small business owners in the area will be given the opportunity they so deserve to live out their dreams.
Pictured: Kiva Zip borrower, Lacey Rollins, founder of Soles Citizen Functional Footwear and Kiva Zip Fellow Ana Acosta.
Pictured: Kiva Zip borrower, Valerie Roseborough, founder of The Tailored Nest and Kiva Zip Fellow Ana Acosta.
As Senator Warner said "Kiva is building on its proven track record in microfinance by launching this program which will support entrepreneurship, create local jobs, and continue the revitalization of our community." This demonstrates just how impactful Kiva Zip can and has been throughout different cities in the U.S. and I'm hopeful and excited about the future of the program and its continued growth and expansion.
In 3 short days, 4 loans have already been fully funded and others are right on track to being funded, if you'd like to help these entrepreneurs reach their funding goals, please consider making a loan to one of these amazing entrepreneurs here. ...(continued)
LaunchHouse of Shaker Heights, OH joins the Kiva Zip Trustee family as its 200th Trustee! In operation for over two years, LaunchHouse is a collaborative business ecosystem designed to foster entrepreneurship through co-working spaces, educational programing and a vast resource network. LaunchHouse has invested a total of $580,000 in 52 portfolio companies, which have gone on to achieve over $11 million in follow-on funding.
Kiva Zip, the pilot program launched by Kiva.org in 2011, connects lenders from around the world directly with borrowers in the U.S. and Kenya through its website. First-time Kiva Zip borrowers can borrow up to $5000 at 0%, and enter into a community that not only provides crowd-sourced lending, but also offers encouragement, business advice, and possibly even a future source of customers.
Trustees are the cornerstones of the Kiva Zip program. We would not be able to identify deserving borrowers in the markets we serve without the assistance of corporations, community organizations, and members of local government who have longstanding, established relationships with entrepreneurs in their communities who are looking for funding, have solid business plans, are perfect for our program, and have historically had trouble accessing credit.
We are excited that the U.S. Kiva Zip program has reached 200 Trustees, and look forward to celebrating the 2000th one!
Do you work with small business owners in a similar capacity? We can help provide the businesses with which you work with funding. Consider becoming a Kiva Zip Trustee today.
We're excited to announce that Kiva City has launched in Richmond, Virginia! Richmond marks the seventh Kiva City launch in which Kiva, civic leaders, community organizations, and financial institutions have come together to increase access to capital for local entrepreneurs.
Senator Mark Warner was in attendance at the launch, and we couldn't agree more with his words: "The launch of Kiva City Richmond is a great new opportunity for hard-working entrepreneurs here in Virginia to get targeted assistance to grow their businesses. Kiva is building on its proven track record in microfinance by launching this program which will support entrepreneurship, create local jobs, and continue the revitalization of our community."
Thanks to support from Capital One, and the great partnerships with 11 Trustees in the area, we have identified 15 Richmond-area entrepreneurs like Valerie, Phea, and Steven who are currently seeking loans on Kiva Zip.
Join us in celebrating the Kiva City Richmond launch by making a loan to a Richmond entrepreneur today!
Pictured (L to R): Senator Mark Warner, Richmond Mayor Dwight Jones, Steve McAlpin of Canes for Courage, and Josh Sheldon of United Virginia. Kiva Zip Borrower, Steve McAlpin, makes custom canes for veterans and presented Senator Warren with a custom walking stick engraved with "Kiva Virginia" and "Senator Warner". ...(continued)
To say that Pittsburgh, Penn. nonprofit Urban Innovation21 is a model trustee is an understatement. Urban Innovation21 has only been a Kiva Zip trustee for four months but has already helped four small businesses get a crowd-funded loan apiece. All of the small businesses, from Tracy's Shear Delight Beauty Salon to Angela's A-1 Business Center, are now on the repayment stage. It's almost too good to believe. How does Urban Innovation21 do it?
The Hill District-based organization describes itself as "a public-private partnership that boosts regional economic development through 21st century innovation-driven entrepreneurship." Urban Innovation21 works with local businesses, community-based nonprofits, universities, and state, county, and city officials to promote economic development in what is called the Pittsburgh Central Keystone Innovation Zone.
The initiative aims to bring together tax incentives and entrepreneurial resources in under-served areas of the city. With all of that experience in economic development, it is little shock that the organization jumped at the opportunity to become a Kiva Zip trustee and add another tool to their toolbox with 0% interest, collateral-free micro-loans as an offering.
How did Urban Innovation21 decide who to endorse in the Hill District? Drawing on their connections to the community and comprehensive understanding of small businesses, the team held a competition. More than 50 small business owners showed interest, but to even be considered for an endorsement Urban Innovation21 required participants to attend four sessions over four weeks on entrepreneurship.
During each workshop, the team and the participants worked through everything from a good business plan to how to market a product. By the end of the four weeks, the field had narrowed considerably and soon after the team decided who to endorse from among the participants.
The competition format turned out to be wildly successful and Urban Innovation21 is planning on holding a similar contest in Homewood, another Pittsburgh neighborhood. And for those who do not succeed on the first go-around, the community-based nonprofit plans to keep at it until as many new small businesses are operating in the Pittsburgh Central Keystone Innovation Zone as possible.
The Hill District, a neighborhood in the Pittsburgh Central Keystone Innovation Zone
When we picture a jungle, we think of a lush green environmentally friendly carbon-sequestering ecosystem. While New York City is commonly referred to as the "concrete jungle," few people know that it has many environmentally friendly attributes such as parks like the Highline and Central Park, and low energy transportation options like the Subway and Citi Bike. In fact, it is more environmentally friendly to live in the Big Apple then it is to live in the suburbs surrounding the city. (Don't believe me? Check out this article.)
New York's environmentally conscious stance doesn't stop there; Kiva Zip's Borrowers continue to reduce New York City's impact on the environment through their environmentally-focused businesses.
Take Porfirio, an ex-convict who wants to have a positive impact on the world by providing green cleaning products to consumers in the New York City area.
Or Liz, who creates Green cinematography to spread awareness about global climate change by educating people about the state of the world and what we can do to help.
However, as a farmer working in the United States, the risk is high and profits are small and highly dependent on the weather. Because of the high risk, banks won't readily loan to farmers, especially the smaller ones. That's where Kiva Zip shines. Not only do our microloans provide these farmers with enough capital to purchase the necessary seeds for each year's crop, but we also offer these farmers a six-month grace period that is great for two reasons. First, it may allow the farmers the time to harvest and sell their crops before they must repay. Second, if the farmers have a terrible year, such as this one with too much rain drowning their crops, the microloan and grace period allows them to retain their business despite the hardships.
While our Borrowers do great work to support the Environmental movement, they cannot be successful without your loan. So let me end my post with a quotation from one of my favorite childhood books, The Lorax by Dr. Seuss. If you are not familiar with the Lorax, "he speaks for the trees for the trees have no tongues."
So as the Lorax said "UNLESS someone like you cares a whole awful lot, nothing is going to get better. It's not."
I arrived to a tiny, dusty roadside stand with three wooden stalls and a few locals hanging around. This was Matutu, a small village in Western Kenya. I hoped this Matutu anyway. There were no signs, and it isn't on Google maps. A boda boda driver took me to my meeting point. A school somewhere nearby.
As we drove down the dusty, dirt roads, I was mesmerized by the scenery of lush, green, rolling hills. And the locals were equally enamored with me. Group after group of children running behind the motobike, yelling "Mzungu! Mzungu!" Most of them waving and smiling; a few looking too shocked or timid to react. Even some of the adults seemed genuinely tickled to see a white person in their village.
I would be meeting a dozen Kiva borrowers on my trip to Matutu, but I would spend the majority of the day with Martha, Joyce and Susan as they showed me their village and introduced me to other borrowers. It was the first time a Kiva representative had visited their small community, and they were eager to share their stories.
After a group meeting at Martha's house, where we had Kenyan milk tea and bananas, we began a walking tour of the village, visiting the borrower's farms and shops. It reminded me of rural Midwest communities. Not much more than farms and homesteads spread out, connected only by rough roads. We walked down the dirt road from home to home, covering a lot of distance, and sometimes picking up friends along the way. Me and my Kenyan mamas.
While the stories varied borrower to borrower, a common theme was gratitude for Kiva for enabling them to boost their businesses and better provide for their families. Some are not only caring for their own children, but also orphaned relatives. Most of the women I met were the primary breadwinners in their household, either because they are widowed or because their husbands aren't working. These are strong, capable women (and men), and I feel blessed for having an opportunity to meet them.
As we walked along the road, we chatted. Me asking questions about Kenya and their area. Them asking me questions about America. Were all the things they had heard true? Is everyone in America happy? Are there really medicines that cure cancer and HIV? Is everyone in America skinny like the ones they occasionally see in their area? (I didn't see that one coming.) We talked about the importance of education to their community. How it unlocks so many opportunities.
For these borrowers, one of the greatest benefits of a Kiva Zip loan is that the increased business revenue enables them to pay for school fees and uniforms. This is a top priority for the families I met. It may be something that we take for granted in more developed countries, even though we recognize the importance of a good education. I certainly realize what a difference education made in my life, the first in my family to go to university. But it's hard for me to imagine children being pulled out of primary or even high school because their school fees aren't current. It's difficult for me to imagine how these children ever catch up, when they are missing such critical periods of learning.
As I was about to leave, they asked me about Americans being strict with time, and I laughed, admitting it was true. We have had many conversations in the office about meetings never starting on time. But today I enjoyed being on Kenyan time with a break from schedules and meetings, idly walking around the countryside, chatting with locals, partaking in life. I left Matutu with a huge smile on my face. And a new nickname. Mzungu. ...(continued)
Leeretta Payne was speaking to a group of potential Kiva Zip borrowers at the Pittsburgh Public Market last week when she paused and gave a fundamental piece of advice: don't borrow more than you need and know exactly, down to the penny, for what you are going to use the loan. The source of that advice is trustworthy. Payne is the owner and operator of The Legacy Café and a Kiva Zip borrower herself. As she nears the grand opening of her storefront (to be located in August Wilson's childhood home at 1727 Bedford Avenue in Pittsburgh's Hill District), she is ahead of her repayments.
For now, Payne is running a very, very successful catering service as she awaits renovations of her space, a recently designated National Historic Landmark. Her clients range from small companies to large corporations and universities, and her small business is booming. Payne has developed a particularly close relationship with Duquesne University, which is not only her client but also a valuable resource. Professionals at Duquesne's Small Business Development Center introduced her to the team at Urban Innovation21, a neighborhood-based nonprofit in the heart of the Hill District that helped her to develop a business plan. Urban Innovation21 had confidence in her work and and became her Kiva Zip trustee earlier this year.
"I figured that since I stayed long hours for an employer, worked weekends, worked holidays, worked at night--I was on call--I might as well do that for myself," Payne said. "And it can be a bit of a challenge, it can be scary, but you just have to go ahead, just like the first time you're swimming, just jump right in, start in the shallow, and work your way out and you'll be okay."
She used the loan to buy equipment for her café, buy more supplies for her catering service, and buy QuickBooks for her laptop. She is also planning to hire several people to help her run The Legacy Café.
"That's one of my goals also: always hire people who are in the community to work," Payne said. "I'm talking to people at [the Office of Vocational Rehabilitation] so they can help me find me someone who's [cooked] before, or someone who's been formerly incarcerated, they do a lot of that in jail also. You know, those are some of the qualifications I'm looking for, because sometimes it's easy if you've been formerly incarcerated, it's easy to say 'go get a job,' but a lot of times people won't hire you, but giving them a second chance is going to work out I'm sure."
Now that Payne has gone through the Kiva Zip process as a borrower, she is eager to become a trustee herself. She is passionate about helping others and about helping her community.
"I'm showing my sons, especially my younger son, open your own business. In the African American community, unfortunately sometimes, you don't talk to young people about opening their own business, as opposed to getting a job," Payne said.
If she has anything to do with it, that frame of mind will soon change.
Pictured: Leeretta Payne is all smiles. ...(continued)
Kenneth holds up his kerosene lantern and proudly says, “I won’t need this one anymore!” He wipes the dust off the table and asks us to sit down. We follow his offer and start listening to his story.
Kenneth lives in a fishing village on Rusinga Island in Lake Victoria inhabited by some 20,000 to 30,000 people, mostly Luo or Suba. Rusinga is an off-grid area, which means that there is no access to electricity in a traditional sense. Kenneth has been running a “hotel” for a couple of years. "Hotel" in western Kenya usually means restaurant. His customers are mostly people from his community and migrant fishermen from all across Lake Victoria.
The business is running well, but he wants to expand. He explains to us in great detail how he envisions his new hotel. There will be additional tables and a greater variety of dishes on the menu to attract more customers. Also, he wants to add a roof to the outside cooking area to be able to cook when it is raining. And, most importantly, he wants to extend his hours of operation. You can clearly see a gleam in his eyes when he was talking about this vision.
The cooking area that will get a cover against rain
Just across from Kenneth's hotel, we meet Peter. If your cell phone is about to die you want to be his friend. Peter runs a small store where you can either charge small electronics or can get a haircut. Peter, also owner of a boda-boda motorcycle taxi business, drives about 10 miles to Mbita every other day to recharge a set of car batteries which he uses to serve the community's electricity needs. Efficient, huh? Actually, Peter seems very entrepreneurial and efficient. When we meet him, he walks up to us with such purpose that we could sense that something exciting is going on here.
Peter in his store where his clients can get a haircut or charge their phone
Where is this opportunity coming from? Yes, it has to do with Kiva Zip! Kenneth and Peter are both new Kiva Zip borrowers on Rusinga Island endorsed by trustee Renewable World. But that’s not all. They also get the opportunity to get on the micro-grid created by a hybrid solar-wind power generator. Renewable World manages a project that built a fascinating power station in the middle of the village. It is basically a small house with a solar panel on the roof and a wind turbine in the front. It is much smaller than the ones we know from the U.S. or Europe, but it is incredibly efficient. An hour of light provided by the new power station will be much cheaper than the kerosene needed for an hour of light provided by a lantern.
The hybrid wind and solar installation in the village center
This technology was developed by access:energy a social enterprise that designs, manufactures, and services renewable energy technologies in East Africa. The installation on Rusinga Island is their premium product because the hybrid structure allows for maximum efficiency. When the sun is out, the solar panel generates power. When it is cloudy and windy, the wind turbine is providing the energy. Together with Renewable World, they offer an innovative leasing model to the community. For the individual household or business it means that all they need is getting wired into the micro-grid. And this is where Kiva Zip gets involved. Kenneth and Peter will use their Kiva Zip loans to buy wires, light bulbs and outlets, which enables them to keep their restaurant open at night or focus on other things besides driving to the next big city to charge a car battery.
Conversations with Kenneth and Peter made us really understand what a difference it makes for a business model to not having access to efficient, clean energy. What it means on a personal level we found out later. We got on a small fisher boat from the bay in Mbita and headed westward towards Uganda. After about an hour, we reached Mfangano Island.
Not only a business need...
We went to Mfangano Island to meet another trustee, Organic Health Response (OHR). We stayed with Robinson, our Kiva contact at OHR. He is extremely progressive when it comes to technology (he just got a new iPhone). OHR is the first and only place where you can access the internet on the island. With the support of another access:energy’s hybrid power installation, they supply the OHR community center with electricity that allows them to run about 20 PCs and their own radio broadcasting station used for health education.
But when we got to his house, which was a little more secluded and far away from the power station, it was completely dark inside, even though the sun was just setting. Robinson’s wife was preparing dinner with a battery-charged headlamp, but a kerosene lantern dimly lit the main area. It smelled so intensely that you can tell it’s not healthy for you to breathe. Kenya’s public school teachers have been on strike for a while, so Robinson’s son has to study at home. He is an amazingly smart kid and read to us part of his book. It was heartbreaking to see how he was squinting in order to read in the darkness. But hopefully Robinson's house will be hooked up to the grid soon.
Not that much fun to read with a kerosene lantern
Supporting innovative technologies like access:energy's power installations has an incredible impact on the lives of people in off-grid areas. Often it is a lack of liquidity that keeps households from investing in new, clean technologies. For this reason, Kiva provides loans for products that replace kerosene lanterns, inside fire-pits and other types of unhealthy, dangerous methods. ...(continued)
Jessie Goldenberg, owner of Nomad: The Wandering Fashion Boutique, is used to assisting the large crowd of customers her popular mobile fashion truck usually draws. However, this past Monday she was more than happy to provide a personal shopping session to one customer in particular: Newark, New Jersey Mayor Cory Booker. Booker was present to launch Newark as an official Kiva City and spent about ten minutes after the announcement checking out Jessie's wares. Booker is known as both a champion of small business and an active social media user, so it was no surprise that after making his selections and saying his goodbyes, he took to Twitter to express his support of Nomad and of Kiva (in fact, he tweeted about Kiva so many times I could barely retweet fast enough!):
Pictured (L to R): Premal Shah, Kiva President; Jessie Goldenberg, Owner of Nomad: The Wandering Fashion Boutique; Newark Mayor, Cory Booker
Earlier that morning, on what had to have been one of the hottest days so far this summer, a great group of Kiva.org and Kiva Zip borrowers and trustees, as well as Kiva partners and supporters, The Intersect Fund and The Rita Allen Foundation, gathered for a press conference to laud the benefits of Newark's new status as a Kiva City. Kiva.org and The Intersect Fund borrower, Elizabeth Hudzik and her husband Samuel, were gracious to host us at her boutique. With the Kiva City distinction, Newark joins the ranks of Little Rock, Los Angeles, Detroit, New Orleans, and Washington, D.C. in the role of connecting local civic leaders, community organizations and financial institutions to help build awareness of Kiva amongst small business owners.
Kiva City Newark Press Conference (L to R): Founder and CEO of The Intersect Fund, Rohan Mathew; Kiva President Premal Shah; President and CEO of The Rita Allen Foundation, Elizabeth Christopherson; Newark Mayor Cory Booker
Newark has had its share of economic hardships, but amidst the challenges is an exciting, dynamic spirit of entrepreneurship. This spirit is furthered stoked by a variety of local organizations that provide technical assistance, training programs and more, many of which Kiva is proud to call trustees. While there is no lack of motivation or innovation amongst the entrepreneurs, there is a frequent lack of capital - which is where Kiva comes in. With a total of six loans already fundraised and being put to good use and another nine loans currently posted on Kiva Zip, the future is bright for these incredible entrepreneurs.
Following the press conference, the celebration continued Monday evening at the new (and beautiful!) office of The Intersect Fund. The event was deliciously catered by Kiva.org/The Intersect Fund borrower Adrienne Fudge and presented a wonderful opportunity for borrowers, trustees and Kiva supporters to connect.
Computer stations set-up to promote our Kiva City Newark entrepreneurs!
Kiva President Premal Shah addressing the crowd
After a few busy weeks spent preparing for the big day, it was incredible to feel the energy buzzing through the room. Everywhere I looked trustees were proudly introducing the entrepreneurs they had endorsed, entrepreneurs were swapping goods and business cards and everyone was eager to work together to create a prosperous economic future in Newark. To learn more about each of our entrepreneurs and make a loan (or two!), please visit kiva.org/Newark. ...(continued)
When Aditi and I arrived in Busia, dust-splayed and weather-beaten on the shared backseat of a boda boda, we did not look like your average tourists.
The midday sun was at its height, and as we throttled down miles of dusty country roads, the wind kicked up streaks of earth that colored my clothes red and coursed through my hair. Sitting on the very back of the motorbike, with Aditi sandwiched in-between me and the driver, I grasped for the metal bar behind me with one hand, and with the other, waved at an ever-evolving panorama of fruit sellers, truck drivers and playing children. The looks I got in return were bewildered at best -- no one was quite sure how to place me.
Up to that point, I had been living in Kenya’s foreigner-saturated capital city of Nairobi for three weeks and had gotten used to a certain indifference at my presence. Few, if any, passerby on the street stopped to take a second look, and there was hardly any uproar at my belabored crawling into a crowded matatu with a cabin-full of locals. But out in Western Kenya -- a stone’s throw from the Ugandan border -- in a place that sees a negligible share of foreign visitors, Aditi and I were the only other mzungu that we saw during our two days in Busia.
The four women that we had traveled over 300 miles to visit in the border town were all registered community nurses who own and operate their own clinics. All of them were recipients of Kiva Zip loans, small loans of $125 lent by individuals from around the world that the nurses used to grow their businesses. But the reason that Aditi and I were in Busia was not to disperse the loans, nor was it to collect repayments. We weren’t educating on Kiva policies or training new borrowers on the Zip model. In fact, it was quite the opposite; we were the ones taking notes.
“When the government hospitals run out of malaria drugs, we are the only place people can go,” Fosca told me, a mother of seven and a widow of twenty years. I was sitting in the reception area of her clinic in the small rural town of Funyula, filling out a borrower verification form and talking fast so as not to take too much time away from her patients. Fosca was soft-spoken and amazingly resilient; she runs two businesses in addition to her clinic, a farm where she sells beans and corn and a brickmaking kiln. More impressive still, she singlehandedly put all seven of her kids through college. (“My last one is in university now,” she corrected me, “so don’t congratulate me just yet.”).
Pictured: Fosca holding the visitor's book we would later sign.
Like many of the nurses I spoke with, Fosca used the Zip loan to stock up on extra supplies for her clinic. One of her competitive advantages has recently been in stockpiling malaria drugs. They are becoming increasingly scarce in the town and she builds her customer base by ensuring that sick patients can come to her and get the drugs that they need when they are not available elsewhere. She said, however, that this would not have been possible without a loan from Kiva.
“Without the loan, things would be like they were before,” she said, “slow.” Her patient base has increased from five a day to close to ten, and she has hired a new nurse to support the growing business. She estimates that profits have increased four-fold since taking out the loan.
But microfinance loans, for many of the nurses I met, were nothing revolutionary. Almost all of them had some experience with borrowing, whether it was through banks, relatives, or informal groups. But not all of them would do it again.
“I had a bad experience with a bank loan,” Janet told me, a nurse in the town of Nambale who began her clinic out of her home back in 2006. “The interest rates are just too high.” At upwards of 40% interest, bank loans in Kenya are a huge barrier for small business owners, especially for those at the bottom of the pyramid. Kiva Zip specifically targets individuals who are deemed “too risky” for traditional microfinance and provides them with capital that would otherwise be unavailable to them.
Pictured: Janet at her clinic in Nambale.
With the help of a loan from her family, Janet was able to rent out a space for her clinic and, six years later, her business is thriving. The Zip loan she took out one month ago enabled Janet to buy more chairs for her reception area and a fridge that allows her to store sensitive vaccinations longer.
“I was happy to get the loan because I no longer have to ask my children for money to buy items for my clinic,” she told Aditi and me. She said that after she finishes repaying her current loan, she wants to use her next loan to expand the physical capacity of her clinic with an extension. But this was not just a future pipedream.
Janet led us out of her clinic and took us into the newly vacant adjacent building, which she had recently put a down payment on. She had already started converting it, outfitting the walls with large floor-to-ceiling shelves and installing a large glass counter in the front.
“This will be the pharmacy,” she told me. Her dream is to eventually own the entire property on which her clinic sits – not simply rent it – to ensure that the clinic will live on beyond her, and that the government won’t be able to take it away from the community after she is gone. Janet, like many of the Kenyans I’ve met – and like many of the Americans I know too – doesn’t entirely trust her government.
But it’s not just trust in the government; trust in one’s community is tricky too. On one hand, it is risky to depend on other people, but on the other, it is sometimes the only option that entrepreneurs have. Elizabeth, who used her loan to buy a glucometer to expand the services that her clinic offers, takes part in what is known as “table banking” with three women’s groups in her community.
“They fund better than bank loans and only charge 10% interest,” she insisted. But she also acknowledged the dangers. In table banking, a large group of individuals pools its money and each week rotates who it is sent home with. It is a useful system, but the model only works if members consistently contribute to the pool even after they’ve cashed out their large sum. “If someone doesn’t pay up, everyone is responsible,” Elizabeth told me. “And that’s trouble for everyone.”
Pictured: Elizabeth with the glucometer that she bought with her Kiva loan.
One of the reasons that Kiva Zip is so different from traditional microfinance is that it provides loans at 0% interest – a rate unthinkable in almost any other context. Another is that it does not depend on intermediaries—microfinance institutions (MFIs), money collectors, or informal groups—in order to deliver loans. Individual borrowers receive and pay back their loans over a mobile banking platform called M-Pesa, and money can be accessed instantly at any one of thousands of kiosks across the country.
But as I talked with the nurses about their experience with Kiva, one nagging question still remained. Not only were Aditi and I clearly outsiders to the town, we were also foreigners. If distrust is already so pervasive among Kenyan nationals, locals within the community, and even close confidantes, than what reason whatsoever did these women have to trust us?
The answer came to me at lunch at a local restaurant in the town of Bumala, where Aditi and I visited Mary, the first of the nurses in Busia to take out a Kiva loan. She bore the risk for the loan and it was only through her diligence and ability to pay it back on time that the other nurses could be endorsed as borrowers. At the heart of Kiva’s model is an underlying philosophy of trust – new borrowers must depend on the reliability of their predecessors to have the opportunity to take out a new loan, and in turn, those predecessors are able to graduate to higher loan amounts. When we went to visit Mary, she was already paying back her second loan, this one for $250.
Pictured: Mary with her daughter and granddaughter at their home in Bumala.
At lunch, Aditi and I were served two huge plates of roasted chicken and potatoes ladled in tomato chutney and paired with a side of leafy greens. As the bill came and we got ready to see Mary, I took out my wallet. I paid for that meal out of my own pocket, the same as I had with every meal I’d eaten since being in Kenya. But more than that, I paid for all of my own expenses in Kenya. It was true of all Kiva Fellows everywhere – none of us received a dime from Kiva for the entire length of our fellowships. And that's when it struck me.
As volunteers, what we lose in credibility due to not being salaried employees we gain by the very nature of our presence – our commitment to this experience means that we believe in Kiva’s mission, and more importantly, that we care deeply about the people that Kiva supports. In that way, we embody that philosophy of trust, establishing a crucial link between lenders and borrowers who may never meet in person, but in some small way can learn more about each other through us. More than anything else, it was the visit to see those nurses, to see first-hand how the Zip loan had changed their lives, that really convinced me of that.
When I saw Mary, I showed her the profiles of all the lenders that had contributed to her loan, and her face lit up. I was surprised to learn that none of the nurses I visited had ever seen their public profile online. None of them had regular access to the internet and on average they only checked their personal emails about once a month. But messages from Kiva, like the loans themselves, are delivered right to the borrower’s phones, and Mary was sent a message every time a new lender contributed to her loan. Likewise, borrowers are able to communicate directly with lenders by sending a text.
“I remember sending Trevor a message when he funded my loan,” Mary said. “I was so grateful for that.”
Many of the nurses were amazed at the fact that we had self-financed our own experience as volunteers with Kiva to make visits to places like Busia. I asked Mary if she thought it was strange that we had come to visit her – that despite having already received two loans from Kiva, we were the first representatives from the organization that she had physically met.
“It’s just like the lenders,” she responded, still staring at the faces of the thirteen individuals who trusted her to repay her loan. “But seeing your faces in person is like an added bonus.”
Near the end of our visit, Mary quickly shuffled us into her office and closed the door. Her eyes widened and she lowered her voice, like we were fifth-graders at a sleepover, and she was about to tell us a secret.
“My kids will never believe you came here,” Mary said, flashing a wide grin. “You’ll have to sign my visitor’s book for proof.” At that point it had become a familiar routine; Aditi and I signed the visitor’s book of each of the four nurses that we came to visit. Each time I tried to write something different. During the visit, I asked them countless questions about how the Zip loan impacted their lives that, when I left, I wanted to let them know how much they had made an impact on me.
When I handed the book back to Mary and turned toward the boda boda driver waiting outside, I thought about leaving Kenya in six weeks, about the stories I would tell friends back home of the nurses I had met in Busia. I wondered if they would believe me either. ...(continued)
We're thrilled to now be offering loans to hard-working entrepreneurs in the Newark area through Kiva Zip!
Zip is Kiva's pilot project to reach new types of borrowers in the U.S. and Kenya. Through Zip, anyone can endorse a deserving borrower to qualify for and raise a 0% interest loan on Kiva. These loans are made directly via mobile money and electronic payment systems, and borrowers and lenders can correspond during the term of the loan.
When you make a loan in Newark, you make so many great things happen:
You support small businesses that would not be able to get a loan elsewhere. And small businesses create 2 out of every 3 jobs in the U.S.
You help people who are more likely to employ people of color, women and marginalized groups.
You jumpstart local economies, strengthening schools, communities, and social services that touch even more lives.
A lot of deserving borrowers don't qualify for loans from commercial banks. They can be denied for any number of reasons. Sometimes the amount they need is too small. Sometimes their business is too young and considered to be too risky no matter how strong the business plan. Occasionally their credit history is too short or has been damaged. At Kiva, we believe these entrepreneurs deserve a chance to make their dreams come true.
To get a loan through Kiva Zip, borrowers need passion, a plan, and people in their community who know and trust them. This is a recipe for success. And when small businesses do well, we all do well.
Some of these Kiva Zip loans are sourced from Intersect Fund, a nonprofit microlender that helps low-income individuals get the skills and resources they need to develop successful businesses and generate more income. Founded in 2009, the fund has helped make more than 300 loans to small business owners. Kiva is also working with the Rita Allen Foundation to find deserving borrowers. The organization invests in transformative ideas at early stages to address social needs and build stronger communities.
Newark joins Detroit, New Orleans, Los Angeles, Washington, D.C. and Little Rock as the newest member of our Kiva City program.
Make a difference in the small business landscape in the U.S. by making a loan to a Newark entrepreneur today:
Chris Bailey sees food not just as nourishment, but as a storytelling tool. A couple of years ago, he started Proxy Foods in Portland, OR. "My Company examines how we interact with a meal, an ingredient, an aroma," Chris explains. Chris is dedicated to crafting unique food experiences. His first creation was Para Llevar, a mobile cart that serves Posole. This rustic Mexican stew invites people to actively participate in dining by adding ingredients and garnishes to a flavorful base.
Pictured: Chris Bailey, owner of Proxy Foods
Chris had no illusions about the challenges of starting a company, and said, "I have many business ideas, but in the beginning didn't know how to handle the logistics of a startup company." Ever resourceful, Chris drew extensively on local business classes, and sought out a mentor. On MicroMentor, an online service that connects small business owners with mentors, Chris met a local lawyer, Matthew Abts.
Pictured: Matthew Abts, Attorney and Mentor to Chris Bailey
"Matthew provided me easy-to-understand advice for every long-winded question, and has quelled concerns to get my business off the ground." Since meeting Matthew, Chris expanded beyond mobile soup, and started a communal dinner series. "I see my early efforts as a springboard to the larger goal of providing alternatives to the traditional brick-and-mortar restaurant."
His next goal is to package Para Llevar for distribution in specialty grocery stores. For this, he needs capital to pay for recipe development and shelf-stability tests. Matthew would connect Chris to capital if he could, however the reality is that banks are not likely to lend to a business as small and young as Proxy Foods. In 2010 alone, major U.S. banks turned down roughly 1 million applications for small business financing. This is why MicroMentor is so excited about a new partnership with Kiva Zip. Having facilitated $450 million in microloans to business owners in developing nations, Kiva is piloting a direct lending tool in the United States. Instead of relying on traditional underwriting, Kiva Zip is bringing back character-based lending, calling on members of the community to vouch for and lend to small business owners.
This became the perfect opportunity for Matthew to make his mentorship go even further. Having already provided critical advice, he could now help Chris get the funds he needs to realize the next evolution of his business. Matthew says, "Chris is a lean entrepreneur with the right chops to pull off a food business, and will produce jobs in the community."
Mentorship and flexible financing are two critical resources too-often missing for small businesses. If more business owners have access to the right advice and needed funds, it creates a ripple effect of local commerce, hiring, and prosperity.
Get involved today:
• Lend to Chris and other small business owners on Kiva Zip
• Find a mentor or be a mentor on MicroMentor
• Become a Trustee and endorse a business owner you trust for a loan on Kiva Zip ...(continued)
Just before moving from Washington, DC to Nairobi, Kenya for my second Kiva Zip fellowship, I asked some friends from home if they would lend to some of the borrowers I had on-boarded.
I showed them Paolla who needs $5000 to start a beauty supply business, and Sara, who needs the same amount to expand her ESL classes for refugees and immigrants. They are perfect Kiva borrowers, I explained, but their loans were fundraising slowly.
Left to right: Kiva Zip Entrepreneurs Paolla and Sara
To my surprise, none of them seemed interested.
"I don't know how I feel about lending to someone in the US," one said. "Let me know when you have Kenyan borrowers. They need it more there."
I was shocked, even offended. How could this group of well-educated social activists whom I respect think American borrowers didn't deserve their support?
And yet, six months earlier, I too doubted the necessity of lending in the developed world.
I am unique as a Kiva fellow who has served in both the U.S. and Kenya, but in the beginning when I found out I was to be placed in DC and not abroad, I was disappointed. Like thousands of others who apply for Kiva fellowships, I wanted to make a "global impact." I was supposed to be "out there," in places like Kibera, Africa's largest slum, where hardship is rampant--not at home in the land of opportunity. Like my friends, I didn't think my neighbors needed me to volunteer my time and resources to get them interest-free loans.
But then I met Roberto, my first borrower, a middle-aged Nicaraguan man living in northern Virginia since 2003. Roberto was soft spoken, with limited English and a warm smile. He worked as a nighttime janitor at a local college and a landscaper on the weekends.
Yet Roberto had a remarkable past. Back home, he was a professor at a top Nicaraguan university. He held two post-graduate degrees in plant science and served as an environmental consultant for UNESCO.
Upon arrival in the US, though, he was demoted to cleaning classrooms on the graveyard shift.
Roberto came to America to build a life for himself and his loved ones, not to sweep floors. So he hoped a $4,000 Kiva Zip loan could help him expand his gardening company and finally return to his love of plants full-time.
In three hours of working together at his trustee's office, we wrote the loan application and it was soon posted online. Within a month, Roberto had the capital he needed to quit his janitor job and take on contracts with clients as prestigious as international embassies. Not only was he able to boost his own career, he also hired five new employees to widen the reach of Ladybug Landscape, Inc.
Roberto showed me that even in our affluent communities there are people whose lives could be transformed by just a few thousand dollars. Indeed, with nearly 80% of small businesses in the US running off of credit cards, many American entrepreneurs--immigrants, native-born, whoever--might fail without alternative funding. These people may not live in extreme poverty, but they still struggle daily to keep afloat, deferring their dreams to pay down debt and feed their families.
Kiva Zip Entrepreneur Roberto
Such folks deserve Kiva Zip loans as much as anyone.
A single mom in Kibera might fit our perception of "neediness" more than a gardener in Virginia, but I've worked with both and the similarities outweigh the differences. Kiva has never been about helping the poor in the charity sense. It is a platform that encourages connections and empowerment of extraordinary people who can help themselves. We lend to give them the tools to do so.
Left to right: Kiva Zip Entrepreneurs Mary and Charles
After four months and 18 Kiva ZIp borrowers in DC, I'm happy to finally be "out there" in Kenya. But my experience in stateside micro-lending has proven to me that even in the land of opportunity, small business owners can use a helping hand.
Post by Taylor Whitfield, Kenya Kiva Zip Fellow
Kisumu Innovation Center Kenya (KICK) Trading’s mission is to revive community livelihood by connecting the Kenyan artisans to markets all over the world.
We had the pleasure of visiting KICK a few weeks ago and getting a glimpse into this innovative organization using recycled materials around Lake Victoria to change the lives of local artisans.
KICK-star team who showed us around
KICK Trading serves as an umbrella organization to local artisans, helping them find markets within and outside Kenya. All products are made from recycled waste materials including:
• Papyrus and water hyacinth and other lake weeds
• Wires from old fridge compressors, air conditioners, car alternators
• Copper wire
• Food tin cans
Street boys normally collect the materials and sell it to KICK Trading. Once the waste arrives it goes through a process to be cleaned and then artisans select what can actually be used. We watched one of our borrowers sort through the soda tin covers, discarding those that were too damaged to use and ultimately selecting the pieces best suited for earrings.
Borrower selecting soda tin covers
One of my favorite things about KICK Trading is how you don’t need to be an artisan to join. Everyone is free to join, even if you have no prior skills. Most people find out about KICK Trading through word of mouth. Once they join, KICK Trading provides a comprehensive training and mentorship program to help develop artisans. They also have regular training sessions on entrepreneurship, product development, and designing.
As one of our borrowers said: “We are products of KICK!”
All of this support also comes with room for creativity and innovation. Each artisan plays his part working independently to find new markets. Additionally, each artisan is given an opportunity to introduce new products to the market.
If the product is adopted by KICK Trading, the artisan who designed the product receives a higher cut of the profits from the sale of the new item. That individual is also given the opportunity to train the other artisans in building the product.
Today KICK Trading has about 40 artisans. They have been a Trustee with Kiva Zip since January 2013. KICK Trading decided to become a Trustee with Kiva Zip in order to enable artisans to have improved access to trade opportunities by improving their businesses both in quantity and quality.
They have endorsed 15 loans and have a 100% repayment rate!
Michael (Kiva Zip Borrower) with some of the products he has developed
Check out KICK Trading’s Trustee Profile here:
Also check out some of KICK Trading’s products at 10 Thousand Villages:
Portland, Oregon: where the dream of the 90s is still alive. Where you can put a bird on something and call it art. Where 20-somethings go to retire.
What's funny about these stereotypes (thanks to Portlandia) is how very pervasive they have become in our every-day lingo. Friends in my immediate circle reference Portlandia more than any other show, not only because it's funny, but because I think people really identify with it.
How many times have you been to a restaurant where they explicitly mark items that are organic, local, farm-raised, etc.? If you're from anywhere on the West Coast, I think you find it fairly often.
How many boutique stores have you gone into in the past six months and found sweaters, jewelry, purses, mugs, and art that feature birds? I think no matter where you are in the U.S., this is a fashion theme right now.
One of the stereotypes that is pushed in this show is the idea that it's a place for 20-somethings to retire, and that it's a city full of people with no real career ambitions. This is one trend shown in the show that I whole-heartedly disagree with. I actually find this a bit offensive at this point, because I have had the privilege of working with some absolutely amazing organizations and individuals who are more hardworking than anyone I've ever met.
If you go to kiva.org/oregon right now, you'll see 20 entrepreneurs fundraising for a loan. These are 20 individuals who are either starting or growing a small business - on their own, of their own volition, because they want to. That little speck of desire led them down a path to work closely with a Trustee and then apply for a Kiva Zip loan.
When was the last time you followed a small desire all the way through like that? I know I've never had the faith in myself to pull off something that huge.
Some of these business ideas came about organically. Take Maria Garcia, for example, who now owns and operates the catering company, Cocina Cultura. Maria used to work for the Mexican Consulate here in Oregon. On Sundays, she would host brunches for fun; her friends from different parts of Mexico would get together and discuss which cuisine from which part of Mexico they wanted to feature, and then Maria would cook for everyone. She'd just request a small donation - nothing more - and cook for the entire group. These brunches became more than just eating; it was an opportunity for friends to exchange stories and cultural practices with each other. From this, Maria's Cocina Cultura was born. To get a proper catering company off the ground, Maria is fundraising a Kiva Zip loan!
Other businesses involved well thought-out business plans from scratch. For example, Shaun Winter, who makes Hot Winter Hot Sauce. Shaun worked on a farm in Northern California for many years, learning to work the soil, harvest produce, and care for plants. He has been nurturing these skills for many years, and so when he discovered a rogue pepper - a pepper different from any other he had encountered - he decided to cultivate that pepper, and from it started making a hot sauce. He worked closely with his Trustee, MercyCorps Northwest, to design a business plan. After a year of doing trials in neighborhood and franchised grocery stores around Portland, he was finally able to secure contracts and plan for appropriate supply of his hot sauce, and hopes this Kiva Zip loan will allow him to invest in planting more of his special "Hot Winter" pepper for his Hot Winter Hot Sauce.
I don't know about you, but these don't sound like "retirees" to me. Nor do they sound like ambitionless adults, sleeping until 11 and working at a mediocre coffee shop part-time.
However, if you'd like to continue quoting Portlandia, I won't blame you one bit.
Shaun Winter with his Hot Winter hot sauce ...(continued)
During the morning tea break, I casually asked one of our Kiva Zip trustees in Kenya who works with refugee populations, what the value is for partnering with Kiva Zip, in which he passionately replied "Being a Kiva Zip Trustee allows me to experience firsthand the tangible impact a small loan can have on literally saving someone's life and providing hope in the form of a new opportunity, where previously no other choices existed. It changes everything."
Another trustee, from the health sector, chimed in with "It's nice to know people around the world value similar things and believe in Kenyans."
As a Kiva Zip Fellow in Kenya for the last four months, I've been witness to these "tangible impacts" through the work and commitment with our 50+ trustees, so I was excited to see how the day ahead was going to unfold, as these profound words filled the air.
A few weeks ago, the Strathmore Business School in Nairobi was a vibrant (by Kenyan standards, so you know it was loud!) hub of Kiva love, as we hosted the first Kiva Zip Trustee Training and Networking Event. We set out to accomplish a lot, and it was a jammed packed full day, but most importantly we wanted to sincerely appreciate our Zip trustees for their partnership during this pilot phase and incredible commitment to improving the lives of our borrowers. Trustees are a vital link in the Kiva Zip model and will be the ones to fulfill the mobilization of our mission, in conjunction with theirs, so it was an opportunity to say thank you.
We designed a training experience that focused on strengthening the foundations of support throughout the trustee current value chain and long-term growth with Kiva Zip, introduced the utilization of the trustee network and provided ample opportunities to connect with one another and with Kiva staff. The remarkable attendance rate was a reflection of how trustees are highly motivated to gain the knowledge necessary to bring this model to the next level in Kenya. All participants came eager to learn, share, and envision a mutually beneficial future.
Since this was our first event, we wanted to maximize the impact by inviting 3 types of trustees from all over Kenya, and truthfully, "test" if we could hold a large event with different target groups. One of my biggest concerns was that because each group had different motivating indicators for being a trustee, they would not find a commonality to collaborate and be engaged in the training. I was happily proven wrong. Again, in fact, their passion for Kiva Zip shone through as many traveled all night on buses, closed down business for a day and some made a significant financial investment to ride multiple matatus in order to claim their space!
59 Trustees were in attendance, who were they?
Seed trustees - NGO's, social enterprises or community leaders.
Borrower trustees - Mentors that have repaid their loan successfully and highly recommended by their Seed trustee.
Referral trustees - Potential new trustees that are referred by top seed trustees.
During the 4 month Kiva Zip Fellowship, myself and 4 other team members used the Lean Startup approach to tackle top challenges while we focused on developing a strategy to scale up. The Lean Startup's underlying principles of testing, learning and pivoting by experimenting with the basic product, allowed us to be flexible and respond to the needs of the trustee and borrowers. Through multiple field experiments, it became evident that a consistent and comprehensive knowledge base amongst our trustees needed to be improved and would be the major roadblock to achieve anything else quickly. Therefore, the key component of the Kiva Zip model, the trustee network, was not being utilized or valued and core tasks we need trustees to regularly complete were not getting done efficiently. This caused extraneous staff resources and adoption problems as we set up systems (i.e. borrower training by trustee, credit ladders & badges, SMS loan applications, etc), that were aimed to give trustees tools to put them on the road to a more self-service model.
Local understanding and capabilities are key success factors, therefore a two-way approach was needed in solution design, training, knowledge retention, ways of engagement, communication and an overall understanding of how we foster the growth of the trustee ecosystem. This event was the first step in that direction and was a direct result of what the trustees said they wanted most.
Not only was there a lot of goodwill felt throughout the day, we managed to accomplish our key objectives. And got a few surprises as people expressed they felt "so taken care of" and "felt like royalty for a day".
• Educating trustees on core functions and sustainability issues will empower them to empower their borrowers, and grow towards a viral approach through borrower communities or borrower-trustees.
• Trustees have capacity to drive change in their social sectors, communities and villages; however, in order for them to be stronger advocates for Kiva Zip we need to involve them more regularly.
• Discovered that there is a Kiva Zip trustee network striving for the same goal and has expertise in areas their organization could utilize; this left trustees feeling "excited and empowered" and ready to take action.
• We need trustees to take an active role in training borrowers, providing on-going support, and managing risk through delinquency tactics.
This event was an example of one way Kiva Zip works with decision-makers in local NGO's and community leaders to continue the discussion around how we can work together to achieve financial inclusion, stability, integrity and ultimately lift someone out of poverty. We all witnessed the powerful potential of the Kiva Zip program, and leaders emerged to become active participants in this new environment.
I know I can speak for all of the Kiva staff and fellows; we were humbled, energized and full of purpose as we all said our goodbyes. ...(continued)
The Bay Area is home to many large technology companies such as Facebook, Twitter, and Google. In this part of the country, we often hear about partnerships on a gargantuan scale. What you generally hear less about are the companies and organizations that are building communities to support small local businesses and entrepreneurs. Two Bay Area tech startups, Kiva Zip and Zaarly, have formed a partnership to do just that.
Zaarly and Kiva are launching a new partnership to provide small business owners online storefronts and access to crowdfunded business loans. In the initial launch seven local entrepreneurs in Oakland, CA are each being given a supporting online storefront in Zaarly’s local marketplace. In addition, these businesses will be able to get their small business loan crowdfunded on Kiva Zip. These two solutions will allow the entrepreneurs to continue investing in their business while they initiate an ecommerce channel.
“We’re thrilled to be able to provide another level of support to local entrepreneurs by partnering with Kiva,” explained Bo Fishback, Zaarly CEO. “Zaarly and Kiva share a combined mission of providing resources for entrepreneurs to make money by doing what they love. This joint effort allows us to accelerate the success of small businesses and that’s something we’re really excited about.”
On July 2nd, Kiva Zip will host a launch party to celebrate this innovative partnership. Seven entrepreneurs will be featured – several Kiva Zip borrowers who have created a Zaarly online storefront as a result of this partnership and several Zaarly artisans who will be fundraising for a loan on Kiva Zip’s website for the first time. As a result of this partnership, Zaarly entrepreneurs will gain access to a new source of capital, while Kiva Zip entrepreneurs will tap into a new source of customers.
Meet the Kiva Zip and Zaarly Entrepreneurs:
AйDa Piroshki in San Francisco. After moving to San Francisco and studying English, Anna decided to start her own business by creating and making the best piroshkis. She has never stopped dreaming of sharing her Russian heritage with the world.
Kiva Zip Link
Hella Fresh Juice in Oakland. Known as the Bodybalancer, Leah provides yoga classes and juice cleanses through her Hella Fresh Juice line, and believes one’s greatest power and potential to affect positive change starts from within.
Kiva Zip Link
MakersKit in San Francisco, a small handcrafted company started by Mike and Jawn, who both love design and DIY projects. Each MakersKit includes all the supplies needed to complete one unique and fun project.
Kiva Zip Link
Sweetpeaz Baby in San Francisco was started by Paulette, and provides people with natural and organic scrubs, oils, lotions and potions, artisan soaps, hair tonics, pomades, and so much more.
Kiva Zip Link
HaloBender in Oakland. After being influenced by his parents’ artistic abilities, Angel started HaloBender, a sustainable wallet and suit design company that specializes in producing high quality products from post-consumer materials.
Iyoba Body Essentials in Oakland. With the hope of finding natural moisturizers for her son, Efiya started her own line of handmade hair moisturizers and conditioners, styling creams, body butters, artisan soaps, sea salt scrubs and milk baths using natural, cruelty-free ingredients.
Besto Pesto in Oakland. Inspired by his parents’ international potluck dinners, Chef Toussaint started his own business, Besto Posto, which is focused on providing sustainable and healthy food to the Bay Area.
Zaarly Storefront ...(continued)
My first week at Kiva was similar in some ways to on-boarding I’ve experienced at other companies. There were long hours spent in a conference room looking at PowerPoint presentations, listening to guest speakers, trying to learn new software and procedures, and, of course, a fun group dinner.
But it was also unlike any other on-boarding that I’ve experienced. We went to Refuge Point, and learned about how the organization helps refugees, largely from Ethiopia or Somalia, who are living in Kenya. Refugees are an extremely vulnerable group needing assistance on many levels. Refuge Point provides that assistance, as well as counseling, to help refugees stabilize their lives and achieve some semblance of normalcy. We learned how critical the Kiva Zip program is for some of these refugees, helping them own small businesses and provide for themselves and their families. For example, one Kiva Zip borrower has gone from eating one meal a day to three. Not through aid, but by building his own business.
Later in the week, we ventured into Kibera to see the amazing work that Shining Hope is doing. Kibera is the world’s second largest slum or shantytown. The estimated population varies depending on the source, but many estimate it to be around one million residents. My emotions shifted as we spent more time there. Certainly when we first arrived I was feeling some apprehension, which dissolved into sadness as I saw the terrible conditions that so many people live in. As far as the eye can see, there are tiny makeshift homes, nearly all lacking running water and proper sanitation. Dusty dirt paths create a maze that makes it difficult for an outsider to navigate. Open sewers filled with trash and debris. It’s estimated that four out of five Kibera residents are unemployed (Source: Lonely Planet Kenya).
So it was amazing to be able to talk to the Kiva Zip entrepreneurs in Kibera who are doing so much with so little. My sadness quickly turned to admiration. We met Joseph, who sells donuts, and George, who sell rabbits. They have big dreams and plans for their businesses. They each took out loans with Kiva Zip, relatively small amounts to Americans, and they were able to invest it back into their businesses, grow their sales and improve their lives. And they don’t intend to stop there. Joseph estimated that with his first Zip loan he was able to double the number of donuts he sells weekly. We sampled the donuts, but not the rabbits.
We saw a school that Shining Hope built for girls, who often don’t have access to a proper education, especially in places like Kibera. It’s got a pretty sweet rooftop playground.
We met a group of women entrepreneurs, who expressed their heartfelt thanks for the impact that Kiva Zip has had on their lives. All have experienced extreme hardship, but they radiated confidence and hope. We ended the visit with a group song. And then I purchased a lovely necklace and bag. It’s pretty cool to know who made it and their story.
Despite the hard conditions, I left Kibera with my heart smiling and feeling proud that I’m able to work with a great organization like Kiva.
What if your next t-shirt could provide joy and financial support to an individual with special needs? What if that same t-shirt could inspire confidence and a sense of accomplishment for an adult worker with special needs? What if you could instantly own a unique, limited-edition, piece of artwork that just happens to come in your size?
All of this is made possible by Paper Clouds Apparel and we could NOT have done any of this without the help of Kiva.org. Thank you to all those Kiva lenders out there helping make business like ours a reality.
Every two weeks Paper Clouds Apparel teams up with a different special needs school or organization. This is done by collecting artwork created by someone with special needs at the school or organization and transferring that art to our shirts and soon-to-be-coming hats and canvas totes. The shirts are sold on our website, papercloudsapparel.com. For those two weeks we will give 50% of the proceeds to the school/organization.
We have received many emails from parents of the children with special needs whose art has been used, and they tell us how this project has completely changed their home life. One mom told us this project "gave her son back his smile." To empower adults with special needs, Paper Clouds Apparel hires these industrious individuals to package ALL of our shirts. As a result, we provide income and a boost of self-esteem for an group that might otherwise not have work. The more you add to your cart, the more adults with special needs we can employ.
Thank you very much to all of you lenders through Kiva who gave us the means to get this project up and running. I hope you will continue to support us, and we look forward to shipping a Paper Clouds Apparel shirt to you. Check out our profile on Kiva Zip: https://zip.kiva.org/loans/506.
You can like us on Facebook at Paper Clouds Apparel and on Twitter at PapercloudsPCA. Have an amazing day! ...(continued)
Growing up in the Hill District neighborhood of Pittsburgh, Tracy Carter was the friend who always did your hair for you. A few years and a desk job later, the boundlessly upbeat and strong-willed Carter realized that her pastime was more than a hobby. Running a beauty salon was actually what would make her happy and what she wanted to do with her life.
“It’s always been a passion of mine, but it wasn’t able to pay my bills. You know, it just wasn’t,” Carter said.
She and her girlfriends still laugh about the very first, very crude hair cuts she gave to them as young adults. Over time, of course, she got better. Eventually, in fact, all of her friends and family were showing up at her door to get done up.
That was life as a teenager, but life as an adult was different. She had a family and she got a so-called “real” job. Carter most recently worked as an assistant manager in an Allegheny County business office in the Pittsburgh suburb of Glen Hazel, balancing over $2 million worth of expense accounts.
“And the money was great,” Carter said, “but I got to the point where I was going to work miserable every day, I wasn’t being fulfilled, and it was just a routine. It was just like a job, and I started to get so down and so depressed about it.”
She also knows that a lot of people would do just about anything to have a good-paying job like the one she had working for the county government.
“Not that I wasn’t grateful, but I wasn’t happy,” Carter said.
With her children grown up and moved out of the house, Carter made the decision. She was going to strike out on her own and open “Shear Delight Beauty Salon” whatever it took. For the past three years, that has meant working out of the basement of her house.
With business booming, she went to the Duquesne University Small Business Development Center for help. In turn, they connected her with Urban Innovation21, a Kiva Zip trustee that was running an intensive, weeks-long competition to determine which small business owners to endorse as borrowers on the Kiva Zip website.
“I’m telling you, if you give me an inch, I am going all the way. I went to every meeting, I didn’t miss anything, I did my own research, and that’s how I landed—getting on the [Kiva Zip] website, and it’s just so exciting,” Carter said. “It was a lot of work, it was intimidating, to learn how to write a business summary plan, but I tell you what, it was so rewarding, and I’ve been doing this now three years [to] four years now, and I have no regrets of walking away from my corporate job. I just don’t.”
The micro-loan from Kiva Zip will allow Carter to buy equipment and supplies for the space she has found in the Hill District to house her beauty salon. (She will pay the rent out-of-pocket with some of the money she has saved up herself). Central Baptist Church is leasing her the place, a former beauty salon with all of the plumbing intact, and allowing clients to park for free in the church lot. With the extra space and extra traction, Carter hopes to build out further.
“It would be wonderful for me to go and hire some people in the community, a receptionist, stylists, people like that. I am so looking forward to that,” Carter said.
Carter enjoys that every day has the potential to be exciting and eventful. Her clients get in her chair, tell her about their lives, and ask her for advice. In a way, her role is not unlike the role played by pastors and deacons in her community.
“It is unbelievable how many lives you touch. And that’s how I know this profession is for me,” she said. “I’m looking to be in business long term, I’m not looking to do this just five, ten years. This is my career.” ...(continued)
You know what makes exercise way more fun? Watching someone else do it! This Thursday, June 27th, we'd like you to join us at an event like you've never even imagined before. Picture representatives from some of the most creative startups in the Bay Area putting their biceps where their precepts are. The PushUp Charity Event starts 6:00 pm at the Minna Gallery in the Financial District. What this means is that they will be competing to see who can do one hundred push ups on stage the fastest, and look good doing it. Get in the game by cheering on your favorite startup team while you support a handful of great causes.
The startups involved are Taskrabbit, 99designs, Github, NitroPDF, and Heroku, and volunteers will be putting their calisthenics on display to benefit four awesome charities: SamaUSA, Muttville Senior Dog Rescue, SF Food Bank, and our very own Kiva Zip. It will be a party-for-a-cause atmosphere with a DJ, MC, camera crews, wild music, a best dressed contest (headbands and all) and drink specials sponsored by Pivotal Labs.
Grab some tickets and join the party. Not since Olivia Newton John's "Let's Get Physical" have you seen this many legwarmers join together in a good cause. These startups are muscling up to the challenge, so don't make them Train in Vain. The best part is, you don't even have to break a sweat to help make the change you want to see in the world.
For more information, check out the website: www.pushupcharity.org
We hope to see you there! ...(continued)
Last week, I travelled to Chicago to represent Kiva Zip at the annual Clinton Global Initiative America conference. President Clinton has been a great supporter of Kiva since he unveiled the Kiva City program at the inaugural CGI America conference in 2011, and it was an honor to be invited to attend again this year.
Kiva Zip participated in the Small Business working group, in which 50 fantastic organizations discussed some of the biggest challenges facing entrepreneurs and small business owners throughout the United States. Perhaps the principal problem identified was that of connecting the 25 million American small businesses with the capital that they so often struggle to access, and the Kiva Zip program met with an enthusiastic response, as a creative and innovative way to begin to address that problem.
I made some great connections throughout the week. Kiva Zip trustees in attendance included Jenny DaSilva of Start Small, Think Big in New York, and Jeremy Gregg of the Prison Entrepreneurship Program in Dallas, as well as Khary Dvorak-Ewell of Green For All in Oakland, who are poised to become trustees in the near future. Other potential future trustees included Dave Wilkinson of City First Enterprises, who could be the first CDFI to become a trustee on Kiva Zip, and Joy Anderson of the Criterion Institute, who are hoping to encourage 1,000 churches to participate in microfinance, and who dared to imagine 200 church trustees over the next year! It was also great to meet Daniel Delehanty of Capital One, whose early loan matching support has been invaluable in getting Kiva Zip off the ground over the last 18 months.
CGI attendees are encouraged to make “Commitments to Action”, and Kiva Zip unveiled a commitment to make 2,500 crowd-funded microloans to U.S. entrepreneurs over the next 18 months. We’re about to pass 300, so we’re off to a good start. Another thank you to all of you, our lenders, for giving us the confidence to make this commitment. Now LET'S GO MEET IT!!! ...(continued)
A couple of weeks ago, we wrote a blog post drawing attention to the fact that a number of the loans we had posted in March were in danger of expiring before they reached their fundraising goal. I’m really delighted to report that of the 10 loans that had been the most at risk, all but one saw a tremendous surge in lending over their last few days of fundraising, and have now been disbursed to the grateful borrowers! We actually saw an 800% increase in fundraising speed for these loans, compared to the average week, which is testament to the tremendous response of you, our lenders. In total, of the 34 Arkansas loans that we posted as part of our launch event with Bill Clinton in Little Rock, 33 were fully funded – a 97% success rate.
A great example is Tommy, a Vietnam veteran with a BBQ and Catfish restaurant in West Helena, AR. With only a few days left until his loan expired, Tommy made this appeal to Kiva Zip lenders: "Hey Guys & Gals, my daughter (Jill) & I are really trying to help make a difference in our community by offering a quality product for our loyal & future customers. I want to thank all that have responded favorably to our goal. The only thing of concerns right now is the time limit is running out to accomplish our quest. Thanks Again, Tommy & Jill McAlexander". Your response was incredible, and in the end, 115 lenders enabled Tommy to reach his goal, with only 1 day to spare!
Sometimes, like last week, we’ll make requests of you, our lenders, to rally round and help out our borrowers. But we also want to use this same forum to appreciate and celebrate your responses, and our collective achievements – so a sincere thank you to all of you! As we congratulate Kiva’s President Premal Shah on his marriage this weekend, we’ll be raising a glass to toast you, our Kiva Zip lenders! ...(continued)
Kiva Zip has now made loans in 35 states throughout America, and our next big launch will be in Portland, Oregon next week. We’re teaming up with Oregon’s First Lady Cylvia Hayes to roll out Kiva Zip as part of the state’s Prosperity Initiative, which she is spearheading.
We’ll be celebrating the launch next Thursday afternoon, and if you are a Kiva Zip lender in Oregon, we would love for you to be there! Here are the details:
Date: Thursday, June 27
Time: 3.30pm to 5.00pm
Location: Portland Lutheran School, 740 SE 182nd Ave, Portland, OR 97233
RSVP -- http://kivaziporegon.eventbrite.com/
We’ll then be heading to Tom’s Pizza Place in Rockwood for an informal meet-and-greet.
We’re hoping to have over a dozen trustees and 20 borrowers in attendance, and we’d love to have as many lenders there as possible – to show their support, and to be re-inspired by the passion and tenacity of the hard-working Oregonian entrepreneurs and small business owners that we’re serving with the Kiva Zip program.
To view a list of all currently fundraising Oregon entrepreneurs, you can follow this link.
And if you want more details on the event, don’t hesitate to email us at contactZip@kiva.org. ...(continued)
This is a guest blog post by Duda Cordoso, a Kiva Zip fellow in Kenya.
Michael Nyangi is a brand new trustee with Kiva Zip through his organization Lomoro Microfinance. I had the pleasure of meeting Michael this past week and can say he is one of the most inspiring and impressive individuals I have ever met. His story is one of true leadership by example...
At the age of 21 Michael was walking through Kibera when he noticed two single, destitute women with babies and lent each $20. The next day he saw the impact that money had on them - each turned the money into a business selling roasted corn and other vegetables. From then on Michael founded Lomoro Microfinance from his own savings account with the goal of improving the quality of life of the low income Kenyans by promoting people-centered development.
At the age of 25 Michael took in seven orphans into his own home to care for them and recruited some local widows to do the same. Later on he started his own orphanage, Achungo Center, to be able to take care of even more orphans. Achungo Children's Center provides education, care, food, clothing and medical assistance for orphans and destitute children.
Michael Nyangi and some of the children at the Achungo Children's Center
Today Michael is an active leader in the poverty eradication space. In October 2008, Michael Nyangi was invited to address the General Assembly of the United Nations on behalf of the poor. Click here to read his speech.
Lomoro has provided loans to more than 100 people in rural areas and 500 people in the slums. Unlike most microfinance institutions Lomoro only charges 10% interest on their loans. Lomoro has recently started providing loans to youth, providing 100 thousand shilling to 25 youths to create five fishponds. These have already harvested twice.
Achungo Center cares for over 220 orphans, 190 that receive all services for free. His orphanage carefully reviews children's birth and death certificates ensuring these children are truly orphans before taking them in. The orphanage and school runs through teachers who volunteer their time. At the school there are nine upperschool teachers, three lowerschool and four nursery / pre-unit. He has also sponsored ten students through secondary school.
Michael Nyangi's Borrowers participating in their first Kiva Zip training session
Michael's leadership does not stop with him. Twenty of his original borrowers who used to live in the slums of Kibera have now been able to move out to Estage where they have a constant supply of water and electricity. They are making contributions to Lomoro in order to help even more people and Michael has connected these individuals with new borrowers in need of capital so they can directly contribute to them as lenders.
Michael's vision for the future is for Lomoro to become a full-on bank, still providing low cost capital to the poorest. He wants to develop a culture education center within Lomoro. Michael is also a strong advocate for women's education recognizing that girls tend to drop out of school at a young age. In his next initiative, he wants to be able to help them remain in school and make it to college.
As a Kiva Zip Trustee Michael is hoping to help people in the Homa Bay region emerge from poverty. He said there is nothing more important than helping people in need and becoming a Trustee is a path for him to achieve his goal.
During our visit to Homa Bay we met 70 individuals who look up to Michael and who he will select to become Kiva Zip borrowers. Keep an eye out for these first loans within the next month! Below are a few photos of some of Michael's potential borrowers...
When we launched Kiva Zip in Little Rock, Arkansas earlier this year, we were really excited to post 34 microloans to financially excluded and socially impactful entrepreneurs throughout the state. Arkansas has the second lowest Human Development Index of any state (after West Virginia), and we heard that there were only 65 microloans made in the entire state in 2012. These 34 loans thus represented a 50% increase in microloans in Arkansas, so we, as a Zip team, were inspired afresh by the potential of our program, and our network of outstandingly committed trustees, to tackle the problems of poverty and financial exclusion in a region gripped by them, and expand economic opportunities in a state that severely lacks them.
But now, coming up on three months later, several of these loans are in danger of expiring. This would mean that all funds lent would be returned to lenders, and these entrepreneurs would not receive any of their loans. We’ve got about a week left until these loans expire, so this is a request for you, our lenders, to consider helping these entrepreneurs out! Either through inviting your networks to lend $25 to them, or by lending $25 yourself here:
It is important to note that we don’t think all Kiva Zip expirations are necessarily a bad outcome. There will be some borrowers whose loans are deemed too vague or risky by lenders. There will be some borrowers who do not invest effort in writing a compelling profile, or engaging with their lenders through the Conversations tab. And there will be some borrowers that lenders decide do not need the money, or are not having a positive enough social impact to justify their loan funds.
Ultimately, the final call is yours as a lender, but we wanted to highlight these loans to you, and empower you to make it.
This is a guest blog post by THRIVE, a Trustee of the Kiva Zip program. They are focused on design development projects within under-resourced rural communities of the Mississippi Delta Region and recently partnered with Kiva Zip to help finance the entrepreneurs and small business owners in their program.
In the spring of 2002, two young socially minded students from the Kansas City Art Institute began a friendship that turned into a business partnership that has lasted for over six years. These two men, William Staley and Terrance Clark, started Thrive, a non-profit design organization, in an auspicious community in the Arkansas Delta called Helena-West Helena. Their goal is to minimize the devastating effects endemic poverty has had on rural communities in the United States.
Thrive formally incorporated in 2008 and their work began in earnest in the fall of 2009 after both partners had completed their graduate studies at Pratt Institute in New York City. Since that time, Thrive's mission has taken shape and they have created a host of economic development initiatives ranging from a business incubator that provides graphic design services and technical assistance to aspiring entrepreneurs, to a monthly arts and cultural festival on the town's main street.
In essence, Thrive provides people who want to make a difference the resources they need do good. Everything from an entrepreneur starting a coffee shop to a group of students taking part in a three week internship to create a mural campaign throughout the community.
Thrive's Helena Entrepreneur Center (HEC) was their first major development project, which began after receiving a seed-funding grant from the Walton Family Foundation by way of the Delta Bridge Project (a community development initiative that created a 10 year county-wide strategic plan). Through the HEC, Thrive has worked aggressively to launch new businesses in Helena, and the results have been remarkable. To date, nearly 50 community members have attended an eight-week class to gain an understanding on feasibility, of which 10 have moved on to the process of starting their business.
Strategic partnerships at home and across the country are at the heart of Thrive's work. Its newest partnership as a Trustee for Kiva allows Thrive to expand its offerings to HEC participants, and makes Helena an environment that is friendly to entrepreneurs and innovators. Its potential impact on the Delta can't be overstated.
Shelley is a former high school science teacher of 12 years, who about a year ago went through a tremendous life adjustment when she retired from teaching and started an auto-body tool manufacturing company called Shelwes Tools. Her pilot product, called the Contour Sander, boasts the ability to cut the time needed to fully sand a car down to one-third of what is required by her competitors. Shelley's loan with Kiva will provide with key startup capital to fully launch her business, create high-skilled jobs in the Delta, and bring an innovative product to the market.
Tommy is a Vietnam War Veteran who took the reins of a successful barbeque restaurant in West Helena, now called T-Mac's. Over the last year and a half, with the support of his family, Tommy kept a successful restaurant from closing, and is now positioned to expand it exponentially. Tommy's loan with Kiva is going to allow him to open a second location in downtown Helena, which will allow him to capture a larger piece of market share keep more financial resources from leaving the community. Both Tommy and Shelley are model examples of entrepreneurs in the Delta, and deserve an equally strong amount of support. Be sure to check out each of their unique stories and contribute to their loans on Thrive's Trustee Profile.
There is still a long way to go before Thrive has reached full-scale. With the help of organizations like Kiva, Thrive hopes to bring its multi-faceted mission to more communities like Helena-West Helena and create a lasting difference in rural communities in our nation that are working hard to reach their potential.
This is a guest blog post by The Greater Newark Enterprises Corporation in Newark, NJ. They provide training and technical assistance to small business owners in Newark and have partnered with Kiva Zip to help their business access crowd funded capital.
The Greater Newark Enterprises Corporation (GNEC) is a 501 (c)(3), CDFI, which has roots in the Central Ward of Newark, NJ and has become a major urban business resource due to its history of providing microloans and delivering effective training and technical assistance resources in both English and Spanish. The organization is adept at identifying challenges of entrepreneurs, bringing expertise that helps the entrepreneurs address their challenges, and when possible, providing capital to help entrepreneurs start and expand their businesses.
GNEC provides structured entrepreneurial training and technical assistance under the Urban Entrepreneurs Development Institute (UEDI), averaging more than 200 entrepreneurs each year. Services are provided to low- and moderate-income individuals in general as well as to target populations such as young entrepreneurs (aged 18-30), women entrepreneurs, small contractors, and previously incarcerated individuals.
GNEC also offers financial assistance and training to small businesses in a variety of topical areas, including financial literacy for entrepreneurs, business planning and business management across a myriad of industries.
• We have funded and or sourced approximately $5 million in financing to small businesses since our inception.
• 91 percent went to individuals classified as minorities.
• 76 percent of the dollar amounts were made in areas designated as distressed.
• Nearly 400 jobs have been created in the Greater Newark area with this capital.
These loans continue to have a positive impact on the communities they serve. With a strong commitment and dedication to assisting small businesses, the loans make a remarkable contribution to the development of new small businesses and to the expansion of existing businesses by financing needed equipment, inventory, or adding working capital. These borrowers could not qualify under regular banking requirements, but because of the GNEC lending activities, small businesses are opening and expanding in and around Newark.
Recently GNEC became a Trustee on a new lending platform called Kiva Zip. This site is designed for business owners to find business loans, funded by everyday citizens. These loans are interest free and allow the borrower to tell his/her story as well. Currently, the lending limit is $5,000, but as clients begin successful repayment, the lendable amount will increase to a maximum of $50,000 -- INTEREST FREE!
Deirdre White (a graduate of GNEC's Spring 2012 UEDI entrepreneur training program), Co-Creator of Kidz Khair Salon, is our first client to be set up on the site and she is well on her way to reaching her $5,000 target.
Through the training provided to Deidre via GNEC's UEDI program and now partnering with KivaZip lending platform, Kidz Khair Salon is well on its way to being a success!
Join with GNEC and KivaZip, you can lend a small amount, or a larger amount, and know that you are directly impacting a person and their business.
Please check out https://zip.kiva.org/loans/1132 to visit Deirdre's page.
Help us create stronger small business communities in Newark, NJ and elsewhere!
For more information and to support GNEC visit us at: www.GNECorp.org
Greater Newark Enterprises Corporation is a community development corporation, and Certified CDFI, established in 2005. The Organization is exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code and similar provisions of the State code.
For the past few months Kiva Zip has been constantly innovating and experimenting using mobile technology. One experiment that deserves to be highlighted is that of our pilot with a service called Kopo Kopo. Kopo Kopo is a world-class platform which enables small and medium businesses to accept mobile payments and build relationships with their customers. They receive a six-digit till number that allows customers to pay using mobile money.
The benefits to our borrowers have been huge. Because of Kopo Kopo, entrepreneurs can deal less in cash thus reducing their risk for theft, which is often rampant in Nairobi. They can also offer their customers an easier and more secure way to pay. Paying with a credit card is not common in Kenya; it is primarily a cash-based society. However, nearly every person owns a cell phone with mobile money capability. Transferring money from a personal mobile money account to another can be expensive as both parties are charged fees. With Kopo Kopo, the transaction is completely free to the customer and the entrepreneur is charged a minimal transaction fee of 1.5%.
When we introduced Kopo Kopo to our borrowers, there was excitement immediately. While all of these benefits excited our borrowers, the thing they were most thrilled about was the fact that Kopo Kopo gave them a professional image. When customers send a payment through Kopo Kopo, they receive a message in response with the name of the business. Additionally, our borrowers received signage with a unique till number and the name of their business. For entrepreneurs that previously lacked any form of branding, they now have unique signage and a tool they can grow with.
A handful of our more sophisticated borrowers have been introduced to the Kopo Kopo service. Here are some of their stories:
Vincent is a traveling sales-man; he goes door to door selling his herbal remedies out of his over-stuffed book bag. Before Kopo Kopo, customers often rejected him due to the fact that many people in his target market would not carry enough cash to buy his products. Now, he can offer customers a trusted way to pay in any location.
Pamela runs a small non-profit organization, which assists widows and at-risk women in her community. The main component of the organization is a small craft shop in the Kibera slum of Nairobi. Pamela’s area can be very prone to theft. With Kopo Kopo, Pamela can deal less in cash and reduce her exposure to fraud through Kopo Kopo’s secure messaging technology.
David is a vendor at a weekly street market in Nairobi. He sells crafts and beads with sometimes 30 or 40 other vendors selling similar products in close proximity. It is hard to differentiate one’s products in such an environment but Kopo Kopo has enabled him to do just that. He is perhaps the only vendor in Masai Market (the street market) that can accept payments through mobile money in a way that is completely free to the customer.
While Kopo Kopo has had a huge impact on the businesses of our more sophisticated borrowers, many have a long way to go before they qualify for use of the service. Most of the time, Kiva Zip borrowers are highly marginalized, low-income and lack technological literacy. Business is a means of survival and many are not yet interested in the branding and formalization that Kopo Kopo offers.
After nearly four months as a fellow in Kenya, however, I have seen remarkable changes in the businesses of many of our borrowers. They are taking out second and sometimes third loans through Kiva Zip; the impact is undeniable. With each loan, our borrowers formalize a bit more; their income increases by a small but significant amount. With the help of Kiva Zip, borrowers come a bit closer with each loan to gain the ability to use tools like Kopo Kopo. ...(continued)
This is a guest blog post by Mirza Tihic of the Institute for Veterans and Military Families at Syracuse University. They have partnered with Kiva Zip to help veterans start their business.
While the national unemployment rate (population 18 and over) hovers at 7.5%, Iraq and Afghanistan veterans (Gulf War Era II or Post-9/11 veterans) face a higher rate of unemployment at 10.8%. Overall, more than three quarters of a million veterans are currently unemployed, with an additional one million anticipated to leave service this year through 2017.
Entrepreneurship, or self-employment, is a solution for the unemployment situation of veterans that comes quite naturally given skillsets gained through military service. According to the U.S. Small Business Administration (SBA) military veterans owned 2.4 million businesses in 2007, which accounted for 9% of all businesses nationwide. Furthermore, the SBA estimates that currently 20% of veterans are looking to start, purchase or partner in a small business start-up.
Entrepreneurship and self-employment training for veterans is a focus of the Institute for Veterans and Military Families at Syracuse University (IVMF). The IVMF leverages higher education to design, develop and deliver world-class educational programs for veterans, their families and community stakeholders. The institute’s educational programs provide veterans and their families with skills needed to be successful in education, work and life.
The institute’s first entrepreneurship training program, the Entrepreneurship Bootcamp for Veterans with Disabilities (EBV), was founded at Syracuse University and trained the first cohort of 20 veterans with service-connected disabilities in 2007. Since then the EBV has grown to a national consortium of schools and colleges across the country offering the program on their campuses. These schools include Cornell, Florida State, Louisiana State, Purdue, Texas A&M, UCLA and UConn, with SU serving as national host.
As of August 2012, the EBV program has trained close to 650 veterans through the EBV program. Of those, 57% have launched a venture and over 670 new employee positions have been created as a result of these new businesses, in addition to the entrepreneur’s own jobs. Jobs have been created in industries including retail, real estate, health services, construction, professional services, transportation, finance and not-for-profits, among others. These jobs have proven to be sustainable—with 88% of graduates indicating that their venture is still in operation. Of those who did not start a venture, 42% went back to school to obtain more education.
The success of the EBV has led to the creation and implementation of other self-employment raining programs operated by the institute. Today, the IVMF has a portfolio of educational programming that includes entrepreneurship and self-employment training for veteran caregivers and family members (Entrepreneurship Bootcamp for Veterans’ Families (EBV-F)), veteran women, active duty and female family members (Veteran Women Igniting the Spirit of Entrepreneurship (V-WISE)), Guard and Reserve members and their families (Operation Endure & Grow (E&G)) and transitioning service members as part of the TAP/TAMP program of the Armed Forces (Operation Boots to Business: From Service to Startup (B2B).
In 2013, the IVMF, together with other partners and industry stakeholders, is looking to further increase its entrepreneurship training and program offerings in order to develop and implement a portfolio of distance education programs. An example of which is the successful launch of the online career and self-employment training portal for veteran and military family members, VetNet. Using Google+ technology, VetNet is a collaboration between the IVMF, Hire Heroes USA and Hiring Our Heroes. The platform provides three training tracks for those making the transition to the civilian workforce, each powered by one of the three organizations above. IVMF operates the +VetNet Entrepreneur track.
The IVMF is always interested in new opportunities for collaboration, to add value to the veteran and military families’ community. An example is our recent partnership with Kiva Zip, through which the IVMF has become a trustee, giving our EBV graduates access to micro-funding, and helping them to overcome one of the barriers of starting a business of their own. An example of this collaboration is Gerald Young (EBV-Purdue, Class of 2009) who used Kiva Zip to raise $2,000 to fund marketing efforts for his company Young G’s BBQ Sauce, and recently landed a major contract with Hyvee as a result of that effort.
For more information about the IVMF, visit http://vets.syr.edu.
This is part of a series of guest blog posts highlighting the amazing work of Kiva Zip's trustees and the inspiring stories of the borrowers they endorse. Gerald (Young G) is a veteran who started his own BBQ sauce business. He was endorsed by the Institute for Veterans and Military Families at Syracuse University. This is Gerald's story.
The opportunity to pursue a small business—and to eventually provide job opportunities to other disabled veterans—is a dream come true for me, and is just one of the drivers behind my business. I’m also fortunate enough to have a product that I believe in and can personally endorse—my dad’s recipe for the best barbeque sauce sitting on any grocery shelf—Young G’s Barbeque Sauce! Bottling the sauce gives me a great deal of pride and I can never thank my family enough—and especially my dad—for both his recipe and all the support I’ve been given.
Due to physical injuries I sustained in Afghanistan, it’s not possible for me to be competitively employed. But like most veterans, I’m a hard worker and want to be productive and more importantly, successful. When my father provided me with his family barbeque recipe and gave me the green light to share his sauce with the world, I knew this was my opportunity to do something big with my life. With the support of the Veteran’s Administration, I have diligently and aggressively pursued self-employment. This business has allowed me the flexibility to accommodate my physical limitations by working from a home base, and to adjust my schedule as needed. Further, watching my customer base, sales, and prospects grow weekly, inspires me to make Young G’s Barbeque Sauce a nationally recognized product.
Although my business in still in its early stages, my goals include to eventually provide jobs in the area of production, distribution, and sales for other veterans. I want to create a cultural climate that endorses and supports veterans—including those with disabilities—to give back to those that gave to our country. And not only do I want to create jobs for veterans, I also want to share my product with military men and women currently serving our country.
My business model includes pursuing military contracts with various government vendors that carry products that are served on domestic military bases. I am aggressively pursuing several strong prospects at this time, knowing full well that securing just one major contract will be the catalyst to take my business to the next level. Once I can secure domestic contracts, I’m hopeful that there will be opportunities for our military men and women to experience Young G’s that are serving overseas. I know that while I was serving in Afghanistan, I would have given almost anything to experience my dad’s barbeque!
Today, the ongoing technical and financial business support I am receiving from the Veterans Administration is proving instrumental in achieving my goals. I know I have the drive and ambition to make Young G’s a great success, and surrounding myself with other business professionals and creating a ‘team’ of experts can only enhance my efforts. As I look ahead to my future, I am optimistic about where I am today with this business, and where I’m heading. I hope everyone will seek out and try my delicious product, and help me to reach both my personal and business goals. ...(continued)
This week, we’re really excited to announce that Kiva.org lenders can now use their Kiva Credit to make loans on Kiva Zip!
This is great news for Kiva Zip borrowers, many of whose loans have been funding very slowly over the last few months, as the number of Zip loans has started to outpace the number of Zip lenders. Today, less than 2,000 people have made a loan on the Kiva Zip platform, but there are 900,000 lenders on Kiva.org. If only 1% of those Kiva lenders made a loan on Zip, the Zip lender base would increase by 450%!
It’s also great news for Kiva lenders, many of whom have asked us when they will be able to use their Kiva Credit to fund loans on Kiva Zip. If Kiva.org users want to try out Kiva Zip, and send a message of support or a word of advice to the Zip borrower they just loaned $25 to, this integration now enables them to do so much more easily.
Existing Kiva Zip lenders benefit too – as they can now use their existing Kiva Zip Credit to make a $25 Kiva loan in one of the 65 countries that Kiva.org operates in, but Kiva Zip has not yet launched in.
From now on, when lenders come to Kiva Zip to log in, they will be automatically redirected to log in on the Kiva.org website, using their Kiva.org lender account. Existing Zip lenders who are new to Kiva.org will be asked to create a Kiva.org lender account. After logging in through Kiva.org, lenders will be automatically brought back to Kiva Zip. The first time this happens, existing Zip lenders will be asked to confirm their Zip password and link their Kiva and Zip accounts.
(If you want more details of how the login process will work, please see our FAQs).
This is the first phase of Kiva Zip’s integration into the main Kiva.org platform. In the future, we hope to have Kiva Zip loans appearing side by side on the Kiva.org lend tab, and the Zip.Kiva.org website may disappear entirely. But this is the first step, and it’s one that we hope our lenders and borrowers will both be very pleased about! ...(continued)
This is part of a series of guest blog posts highlighting the amazing work of Kiva Zip's trustees and the inspiring stories of the borrowers they endorse. Jill Johnson is the CEO of the Institute for Entrepreneurial Leadership in Newark, NJ.
As I witnessed the President's inaugural address and listened to his directives on American collective efforts, it reinforced to me how important the Institute for Entrepreneurial Leadership (IFEL) is to our clients and the communities that we serve.
Our entrepreneurs are mostly people who see starting a business as an avenue to a better life. They have an idea, a vision and a lot of passion. The resilience of small business owners and aspiring entrepreneurs never ceases to amaze me, particularly those whom IFEL supports. On a daily basis, they continue to push forward and succeed against considerable odds.
For over ten years from our base in Newark, NJ, we have provided one-on-one mentoring to women, minority and inner city businesses with revenues less than $250,000. Often referred to as mom and pop businesses, we celebrate these entrepreneurs as the agents of change in communities where change is most needed. If we can help these businesses grow, we make a difference for the people they employ, the customers that they serve and the communities that benefit from their company.
What they are often lacking is business training or deep pockets to buy the expertise that they need. They may have some personal savings, but capital is scarce and traditional lenders are not an option. This is where IFEL finds our calling -- working with those who are left behind by the mainstream entrepreneurial support system. We are now taking our model on the road and establishing affiliate partners who can replicate the model to support entrepreneurs from low income and under-resourced communities across the country. Already, we have six affiliates in five states: Connecticut, Pennsylvania, Missouri, Virginia and Florida.
IFEL is focused not on the entrepreneurs who start businesses with loans from their parents or SBA, corporate buyout packages or by raising money on Wall Street. Our focus is not on the high tech, high growth businesses that grab the attention of wealthy angel investors. Our clients are regular people who aspire to live a better life, people for whom the American Dream is a concept worthy of pursuit.
In 2011, we joined forces with Workshop In Business Opportunities (WIBO), an amazing organization that has trained over 15,000 over 46 years in the areas of New York City where the angel investment dollars do not flow -- communities like Harlem, South Bronx, Washington Heights, and Bedford Stuyvesant. Just one year into the relationship we have created an end-to-end training, mentoring and a support continuum for the entrepreneurs that we have long served.
Funding was the piece of the puzzle that was missing from our continuum.
No matter how much training and mentoring we have done, there have been few options to address lack of access to capital, which is inextricably linked to poor personal credit which often stems from trying to run a business without capital -- a vicious cycle.
Most small business and entrepreneurial experts agree that small business success is strongly correlated to access to capital for startup and growth. No, money can't fix a business without a fundamentally sound business model, however money can help to buy expertise and can keep you in business long enough to figure things out and adjust.
Undercapitalized businesses have no room for error and little capacity for weathering any storms.
At a time when even nontraditional capital resources are not an option for many our clients, in walks Kiva Zip taking the international Kiva microfinance experience and bringing it home to the U.S.
Kiva Zip is a pilot program of Kiva.org that seeks to crowd fund loans to small business owners and aspiring owners through a new Trustee model. Trustees can be individuals or organizations, like IFEL. The Trustees endorse entrepreneurs, who in turn post their own profile on Kiva Zip so that they can begin crowd funding their small business loan among friends, family, community members, customers and a global Internet community of small dollar lenders. We are so excited about the possibilities!
To give Kiva Zip a test run, we endorsed the winner of our first WIBO Pitch Competition, Precious Williams, owner of Curvy Girlz Lingerie. Curvy Girlz offers well-fitting, beautiful lingerie to the 14 million plus-size women in the U.S. overlooked by other popular retailers. Precious not only has a great market opportunity with a solid business model to support it, she has the drive, determination and fortitude necessary to go the distance. She is willing to listen to advice, take decisive action and work tirelessly toward her goals. Not even one month into being up on the Kiva Zip platform and she is 100% funded! She and we are so excited about her future. The accessibility of funding through Kiva Zip will enable her to move forward at a steady pace, taking advantage of opportunities as they come her way.
Within the next few months, we intend to work with several other clients to get them up on Kiva Zip, use the funding in a way that will take the business to another level AND create a plan to pay the lenders back on time.
For so long, the entrepreneurs with whom we work have been struggling with the issue of access to capital. While Kiva Zip may only provide very small loans, it is at least a start. And for so many of our clients, that is what they need...a start. This is the type of helping hand that without creating additional tax or government intervention, gives people an opportunity to improve their lives and their communities. It also gives everyone a chance to be involved in their success as lenders.
With the support system that we provide combined with access to capital through Kiva Zip, I have no doubt that we can help a lot of hungry entrepreneurs learn to fish, sell the fish, buy boats, hire other fisherman and build communities in which everyone can eat.
This is a guest blog post by Bonney Hartley and Nadine Argueza of the Native American Health Center in Oakland, CA. They have partnered with Kiva Zip to help Native American entrepreneurs who they work with.
Native American entrepreneurs have demonstrated tremendous growth in recent years. The US Census shows that Native business revenue totaled $34.4 billion in 2007, a 28% increase from 2002. In spite of this growth, success is limited to areas with established business development centers and programs, and often does not reach federally unrecognized tribal communities. The Native American Lending Study reports that 74.3% of non-federally affiliated tribes have no access to microloans. There are also barriers for Natives in urban areas--where more than 60% now reside--in accessing federally-funded services that are only available to designated reservation and rancheria communities.
Lack of access to seed funding is just one of the challenges faced by Native entrepreneurs. Like many small business owners and aspiring owners, there are few places to receive critical business training, technical support and financial literacy skills. In order to contribute to meeting these community needs in the urban San Francisco Bay Area, the Native American Health Center (NAHC), took on the role of a Trustee on Kiva Zip.
NAHC is the only health care provider targeting the Native American community in the five-county San Francisco Bay Area. There are close to 80,000 American Indians and Alaska Natives living in the San Francisco Bay Area, one of the largest concentrations of Native Americans in any urban area in the United States. Though not a financial services organization, Native American Health Center has started using the Kiva Zip platform as an opportunity to lessen barriers and foster economic health in the Bay Area.
Crystal Wahpepah, a proud member of the Kickapoo tribe raised in Oakland, is NAHC's first endorsed borrower on Kiva Zip for her Wahpepah's Kitchen Native American food business. Crystal has a long history with NAHC.
"I literally grew up here," says Crystal. "It was a home away from home. I got my first teeth pulled there, attended the youth program, and later got prenatal care here."
More recently, NAHC is honored to play an integral role in meeting her wellness needs for the next stage of her life: translating her rich cultural food heritage into her culinary dreams.
NAHC staff connected her with the Bread Project, a local food industry skills training program, followed by a connection to La Cocina, a food business enterprise incubator supporting disadvantaged women. NAHC has also provided support vital to Crystal's success, from requesting her services for some of the first catering events for Wahpepah's Kitchen to providing coaching and technical assistance as she drafted the seeds of her business plan.
Though she has received tremendous praise and interest in her foods through the catering jobs and at La Cocina, a real financial barrier remained in having start-up funds to grow her business. She needed her own van for transportation rather than relying on buses or getting rides to fulfill catering jobs. She was struggling without her own catering supplies and the funding for required safety permits.
With NAHC's endorsement, Crystal's profile on Kiva Zip made that happen. Her $5,000 loan request was met by 41 lenders in about five weeks, making it one of the fastest-fulfilled to date on Kiva Zip. Now, she has purchased the van and is looking to hire at least three other community members as part-time employees. This job creation is exactly the intended ripple effect. Platforms like Kiva Zip have helped fuel the financial needs of community aspirations by opening the business up to a broader market of interested lenders.
Native entrepreneurs like Crystal have a built-in asset in the opportunity to draw from community strengths such as pride, self-sufficiency, resiliency, and close social networks.
"My greatest strength is knowing that in the community there's a lot of help and support," says Crystal.
In line with NAHC's holistic healing approach, Crystal's path stands testament to the inseparability of economic health from physical, emotional, and spiritual well-being. ...(continued)
This is a guest blog by Mi Casa Resource Center, a trustee in Denver who has endorsed three borrowers on Kiva Zip.
Mi Casa Resource Center is collaborating with Kiva Zip to provide loan assistance to low-income business owners unable to access loans from traditional lenders.
Mi Casa is a Kiva Zip trustee, an organization approved to work with entrepreneurs and small business owners to prepare them to apply to open a loan on the Kiva Zip site. Once the entrepreneur's loan and story are posted on zip.kiva.org, anyone with an Internet connection and $25 or more can help crowd fund the small business loan, providing critical capital to help start or expand a business.
Kiva Zip has helped 3 graduates of Mi Casa's Éxito para Negocios (Business Success) class get the finances needed to grow their small businesses.
Elmer was raised by a single mother in Guatemala. He began working at a very young age and was consequently unable to attend school. In 1993, Elmer moved to the United States in search of better opportunities and has since gained extensive experience in remodeling and handyman work.
Elmer attended Spanish-language entrepreneurial training classes at Mi Casa and is now the owner of Duarte Construction, which offers home remodeling and repair services.
"With Mi Casa's help, I have learned how to market my business and network to find clients," says Elmer. "In this economy, it can be hard to compete with larger construction companies, but I see progress and I know it's worth it to keep going."
Elmer was also approved to receive funding through Kiva Zip and he plans to use the loan to expand his business by buying a truck for transporting tools to different work sites.
"He is a very responsible person who has demonstrated commitment to becoming the best in his industry," Mi Casa says of Elmer. "Elmer is very passionate about his business and his customers."
Elena decided to pursue her dream to become a hair stylist after the death of her father in 2002. To achieve this dream, she finished high school and graduated from cosmetology school despite being a single mother and struggling with learning disabilities.
She then worked in a salon for 5 years, but lost her job without warning when her employer suddenly closed the salon.
Elena wanted to operate her own business with high standards and quality service so she enrolled in entrepreneurial training at Mi Casa and graduated with a strong business plan. Elena also received funding through Kiva Zip to start-up her business and will open iCandy Hair studio in February, where she will offer haircuts, hair coloring and eyelash extensions.
"Mi Casa gave me the plan I needed," Elena says. "I struggled with a lot of different issues, including my learning disability and the passing of my father, but I pushed myself and I'm so happy I did it."
Elena's passion, plan and persistence was recognized on Kiva Zip by 24 lenders from 11 different states in the U.S. Together these lenders funded a loan of $4,000 to help her start her business.
Gloria moved to the U.S. from Veracruz, Mexico in order to start her own business. Possessing a strong background in the food service industry, Gloria decided to open a food truck business in Denver. Before buying her truck, she gained exposure and generated revenue for her business by catering at special events.
Gloria also completed an entrepreneurial training class at Mi Casa to ensure the success of her business. In this class, she gained a solid foundation of best business practices and developed a full-length business plan.
Gloria received funding through Kiva Zip to jump start her food truck business and is now the proud owner of Taqueria & Reposteria Gloria's, specializing in home-cooked Mexican food.
"She is so committed to her business that nothing will stop her," Mi Casa says of Gloria. "I truly believe Gloria will be successful, as she has proven time and time again her commitment to great customer service, helping other business owners and to her ideals and dreams."
Gloria continues to receive business counseling from the Women's Business Center to make sure her business says on track.
This week we started a JobRaising Challenge sponsored by the Huffington Post and Skoll Foundation. Kiva Zip will be competing against 70 other non-profits around the country in a fundraising/blogging competition. We’ve found that this is a unique opportunity to highlight our borrowers and trustees across the United States. Over the next six weeks we will be sharing a number of guest blog posts that will be featured on our blog and the JobRaising Challenge website.
To contribute to our campaign, please visit our fundraising page. Stay tuned for a series of Trustee Highlights and Borrower Stories that we will be sharing soon!
Below you will find our first blog post that was posted earlier this week. You can find the article on the Huffington Post website here and we would love it if you could share it with your family and friends.
Our country needs an economic recovery crowd funded by the American people and sustained by small businesses. Through crowd funding microloans to small businesses, the power to shape the course and success of economic opportunity and job creation is in each of our hands.
Small businesses are the cornerstone of the nation's economy and a stepping stone to the American Dream. They are the engine of local and national economies, creating two out of every three net new jobs in the country.
Many small business owners and aspiring owners have all the elements of success -- except access to capital to start or expand their businesses and create jobs. According to U.S. Small Business Administration Chief Karen Mills, "Small-dollar loans and loans in underserved communities are still not back at the levels we need them."
Job creation is one of Kiva's central goals. Microloans can serve as a bridge for many small business owners, providing commercial credit history and working capital to start up, expand operations, and hire or retain employees. A crowd of people lending as little as $25 on kiva.org gives each of us a chance to support thriving local economies, communities, and jobs. Loans funded through Kiva have a 98 percent repayment rate, so the money you lend to a small business owner is likely to come back to you. By connecting people through lending, Kiva has empowered small businesses and served as an important catalyst for positive change and job growth.
In November 2011, Kiva launched a new pilot program in the United States called Kiva Zip. Kiva Zip exists to drive innovation in person-to-person lending with the aim of filling the critical lending gap that hampers job creation among small businesses. We provide 0 percent interest loans up to $5,000 for small businesses and entrepreneurs who are financially excluded and underserved. In the past year, we've helped 135 entrepreneurs in 28 states access over $400,000 in capital. And this was only Kiva Zip's first year of operations as a pilot program.
Kiva Zip's growth was made possible through our partnerships with trustees around the country. Trustees are typically organizations that provide support and assistance for entrepreneurs, whom they endorse for a Kiva Zip loan. Once endorsed, a borrower can post their profile on Kiva Zip where their loan is crowd funded, $25 at a time, by lenders like you visiting the site. Across the nation we are partnering with many types of trustees such as Small Business Development Centers, socially focused startup incubators, Economic Development Corporations, and micro finance institutions. We have also worked closely with local community organizations, including those that help the homeless, disabled veterans, and formerly incarcerated individuals.
One of our Kiva Zip borrowers, Old Skool Café in San Francisco, used their loan to help provide jobs and training for former foster care and incarcerated youth. Their restaurant confronts the epidemic of violence by providing at-risk youth with a variety of career opportunities that would normally not be available.
Another Kiva Zip borrower, located out of Phoenix, Paper Clouds Apparel, showcases the creative minds and artistic abilities of individuals with special needs and raises funds to provide financial support for special needs schools and organizations. It sells bamboo T-shirts, prints, and greeting cards featuring artwork designed by individuals with special needs. They used their Kiva Zip loan to help hire individuals with special needs to package all of their clothing.
The borrowers we've supported all have their unique stories and background but have one thing in common: They've been excluded in some way from traditional forms of financing and are looking to make a positive impact in their lives and the lives of their families and communities.
Crowd funding microloans to small business owners has a ripple effect on local economies and communities. Every dollar lent to a small business helps to create jobs for your neighbors, who in turn support another local business and then another. As small businesses grow and expand, local economies improve, helping to support schools, city services, and more vibrant and sustainable communities. The dollars that sparked that cycle come back to you, but the cycle you helped to spark continues long after your loan is repaid.
In 2013 we are poised to help more than 500 businesses in the U.S., like Old Skool Café and Paper Clouds Apparel. Based on the data we have collected, the average number of jobs created by each borrower is three. That's 1,500 new jobs that Kiva Zip will help create in just one year. This is all the most striking considering we are in pilot phase and have not fully scaled.
By contributing to Kiva Zip you are helping to support this innovative new approach to crowd funding and job creation, visit our fundraising page.
If you would like to lend to an entrepreneur in your community, visit our website at zip.kiva.org and make a loan today.
Kiva Zip exists to extend economic opportunity to entrepreneurs in all walks of life and build community and connectivity through our platform. In order to accomplish these goals, we’ve relied on building strong partnerships with organizations that have a similar mission and set of values. So far we have partnered with over 50 trustees in 20 states, serving over 85 entrepreneurs across the US.
Last month we partnered with one trustee that we are particularly excited about. The Last Mile is an organization in San Francisco that helps inmates at San Quentin Prison develop the necessary skills to succeed upon their release. Twice a week, these inmates learn skills from tech entrepreneurs throughout the Bay Area and get mentored in verbal and written communication, business formation and operation, presentation skills, computer efficiency, and social media.
Over the course of their six-month program, these entrepreneurs are able to develop a business plan from inside the prison walls and prepare for success upon their release. Earlier this year, the first cohort of inmates had their first Demo Day where they pitched their business concepts.
Through this partnership, it’s our goal to help support every entrepreneur who graduates from The Last Mile program upon their release from prison. As they work to launch their own businesses, Kiva Zip will be a resource they can leverage to get started.
After meeting and speaking with entrepreneurs in The Last Mile program, the one benefit that resonated with these inmates most was the "Conversations” feature on Kiva Zip. The community that is manifested on our platform creates a unique channel for people to connect, help, and support one another. The inmates in San Quentin thought this was so beneficial because they don’t have a strong network of support outside prison walls. Having a community of people rally behind them with words of encouragement and support brought a sense of hope, motivation, and appreciation.
A few weeks ago The Last Mile endorsed the first graduate of their program, Tulio Cardozo. He is launching a non-profit called Collaborative Benefit, which aims to help inmates in prison successfully find employment. The platform is meant to be the LinkedIn for prisoners, a stepping-stone to permanent freedom upon their release.
After speaking with Tulio, he spoke to the awesome experience he had with Kiva Zip, and the impact that a loan was going to have on his business. The connectivity that he’s experienced has energized him to make his business a success:
"Logging on as an entrepreneur and seeing the validation of your business completely re-energizes every bit of effort to make sure that you are not only moving forward an awesome idea that you believe in, but moving forward an idea that others believe in. On those late nights, I’m sitting there thinking that this has got to get done because we want to make sure that everyone who’s invested into it sees that we are really appreciative of their support."
This is a core value of the Kiva Zip project. It validates our hopes that the Zip platform can be a vehicle for entrepreneurs to connect with a community of people that provide encouragement and support. Having access to 0% interest credit is a huge benefit, but the organic community is just as important and something that is making a huge difference in the lives of the entrepreneurs who join our family. ...(continued)
Ever since I started with Kiva Zip in the US my sixth sense seems to have awakened…I see entrepreneurs…everywhere!
I think my understanding of what an entrepreneur was had until now been quite limited. An entrepreneur was Mark Zuckerberg from Facebook. Or the guy from Google, or someone opening a restaurant. But how about the person selling soda from a pull cart in Downtown DC? Or the person that put a card in my mailbox saying “cleaner for hire”? No. I didn’t include them in the same definition – until now that is! So as I head to the food cart guy in my neighborhood, I walk past a professional looking farmers market stand, a less established lemonade stand, a guy selling the homeless magazine, a make shift sunglasses stall off the main street and a flower vendor. And it’s clear: we need to adjust our thinking about entrepreneurship. All of us, not just the banks who lend money.
We're really excited to announce a party in San Francisco celebrating our one-year anniversary! On November 7th we will be teaming up with Old Skool Café for an evening of food, drinks, and entertainment. We will be highlighting some of our first Kiva Zip borrowers here in the Bay Area, celebrating our progress over the past year, and creating an environment where lenders, borrowers, and trustees can meet and network with one another.
If you are in the area, we would love to see you there. Below you will find the details of the event:
When: November 7th from 7:00pm to 10:00pm PST
Where: Old Skool Café (1429 Mendell St in the Mission)
Admission: $50 (includes all food, wine, and beer)
Old Skool Café was one of Kiva Zip’s first borrowers, endorsed by our CEO Matt Flannery. They are currently the #1 rated restaurant in San Francisco on Yelp. We will also have another Kiva Zip borrower, Pacific Brewing Laboratory, providing two delicious brews on tap. Wine will be provided by Vision Cellars and food will be prepared by Old Skool Café youth and some surprise guest chefs! There will also be presentations from Matt Flannery and Kiva Zip borrowers, and entertainment from the talented Jackie Gage.
We hope you can join us for a wonderful evening of drinks, dinner, and discovery! ...(continued)
Back on February 14, I wrote a post on this blog called Going Local. It featured a map that showed the different bars and restaurants around San Francisco, where you could buy one of our Kiva Zip borrower’s beer. On reflection, it was a relatively unromantic way to spend St. Valentine’s Day.
It’s now eight months later, and this blog post is to highlight another couple of maps, which we’re even more excited about. They show all of the borrowers and trustees that have been posted to the Zip website since we launched it.
Almost exactly a year after we launched this Kiva Zip pilot, we took the password protection off our website this week. It’s been really exciting to see traffic spike over the last seven days (by around 2.5x), and it’s also been pleasantly stress-free – thanks to the outstanding preparation of our only full-time engineer…Paul Ericksen.
It’s also been great to see fundraising speeds significantly increase, which was one of the principal reasons we made the decision to remove the password protection. While the average Kiva Zip loan has funded in only two weeks to-date, larger US loans have taken four weeks on average, and some loans have taken two months to fully fund. As we continue to recruit new trustees and increase the supply of loans on the website, we wanted to make it easier for new users to make loans on Kiva Zip.
One year ago, we weren’t even sure if it would be possible for us to make one loan directly to a Kenyan entrepreneur via their mobile phone. We have now made 250. Plus another 70 or so in the United States via Paypal. We have made these 320 loans with a repayment rate of around 90% (as of late September 2012), and we have received almost unanimously positive feedback from the many borrowers we have surveyed. We have facilitated over 1,000 direct messages between borrowers, lenders and trustees, including 109 SMS messages from Kenyan borrowers’ mobile phones to their lenders. We have recruited over 65 trustees, and the lender feedback so far has also been encouraging. And most importantly of all, we have expanded access for entrepreneurs who, without Kiva Zip, would have been completely excluded from conventional financial institutions.
Of course, there is still a long way to go. The repayment rates cited above are highly tentative, and we will continue to monitor them very carefully over the next year. We continue to experience the technical teething problems that every start-up faces – and these will continue to affect borrowers, lenders and trustees, even as we strive to improve our service across the Kiva Zip ecosystem. Most of all, we still need to see if we can scale the Kiva Zip model without significantly increasing our operational expenses, jeopardizing the healthy repayment rate, and risking fraud. And explore how we can enable our borrowers to receive the technical assistance and wrap-around services that they frequently require, and that Kiva’s MFI partners often provide?
But our first tentative steps, and our early but promising results, bolster our confidence in opening up the Zip website. We’re going to keep innovating, learning, falling, getting back up and moving forward in even smarter ways. And if we can continue to grow the number of entrepreneurs that we are supporting, whilst maintaining strong repayment rates, enjoying positive borrower and lender feedback, and keeping our costs under control, the next step will be to start integrating Kiva Zip into Kiva.org. But that’s a challenge for 2013.
Thanks to all of the lenders, borrowers and trustees who have supported this project over the last twelve months. We would not have been able to get to this point without you. We look forward to your continued and increased involvement over the next year – and beyond. And as ever, if you have any ideas, feedback or concerns, we would love to hear them: contactZip@kiva.org....(continued)
It is a strange feeling to leave a job you absolutely love. I have had the honor of working on the “Zip Line”- from witnessing the launch of Zip with an unproven idea but a lot of hope, to now seeing pages of borrowers on the site with results that have proven our hope a reality, I have loved every minute of working on Zip.
This week, we are pleased to announce the launch of a new feature on Kiva Zip: Borrower and Trustee badges. As you can see from the Lend tab, every borrower and trustee now has the ability to earn Gold, Silver and Bronze ‘badges’, based on their actions on the Kiva Zip website. Badges can be earned for ‘Repayments’ (e.g. making loan repayments on time) and ‘Connectedness’ (e.g. inviting friends to join Kiva Zip as lenders, commenting on the Conversations tab of a loan, etc.).
We’re really excited about the potential of badges, along a number of dimensions: For lenders, they can give a clear and simple indication of which borrowers are more likely to repay their loans, or engage with their lenders; For borrowers that commit to engaging with the lenders to their loan, fundraising speed may well increase, as lenders respond to their Gold Connectedness Badge with their $25 loan shares; For trustees, in the future we might give more prominence on the website to trustees with gold and silver badges (see the photo below), etc.
Many aspects of the badges system will change significantly over the coming months – the types of actions that earn badges; the algorithm used to calibrate which borrowers and trustees should earn (or lose) which badges; the implications of earning (or losing) badges for borrowers and trustees; and for the purposes of symmetry, we hope to see lender badges on the site in the future…
…But Kiva’s mission is “to connect people through lending to alleviate poverty”, and we think that the badges system could be a great way to recognize and reward borrowers and trustees who commit to connection, and faithfully repay their loans on-time....(continued)
“Is now a good time to chat?” I ask, as I hear papers shuffling in the background. A brief pause and then a voice, “Hang on, let me snap out of artist mode.” A moment later, a calm and authoritative voice says, “Hello, it’s a pleasure to speak with you”.
Richard is the founder, designer, manufacturer, accountant, marketer and web designer for Imptees Designs. Like many of our Kiva Zip borrowers, he is a one-man company.
Richard tells me that he has always been creative, constantly drawing and creating characters. At his last job, he had free time to just let his “mind run wild” -- that’s when he thought of the idea for a T-shirt line.
“I’ve had ideas before” he tells me. “My mother was an entrepreneur, so it runs in my blood. But it wasn’t until I thought of Imptees Designs that I felt I could really do this -- that this was going to work!”
Each of the five Kiva Zip borrowers that I interviewed described some version of this moment -- the realization that there is a way to turn their talents, skills and interests into something valuable. This “a-ha!” moment is easy to identify -- their voices dance with passion and moxie. In that moment, it’s impossible not to be inspired. But as each borrower told me their story past the point of inception to growth and development, their voices changed again.
Realization comes down to resources -- financial and advisory.
“Money is hard to get,” Bryan, an engineer-turned-brewer, frankly states. “Banks want collateral and even angel investors want to see an established business. I am a guy with a dream. Dreams aren’t currency and they’re not collateral.” A biomedical engineer by trade, Bryan turned his brewing hobby into Pacific Brewing Laboratory. It wasn’t a difficult decision to make. “I had passion, knowledge and demand, but I
struggled to find funding.” And he is not alone.
Lance, founder of media services platform for community outreach and content development Planet Fillmore Communications, put it this way: “I have the skills and vision, but the cost of equipment kept everything out of reach.” Emiliana of pickle-maker Jarred SF Brine reflected on this moment saying, “The cost of starting a business felt like it was always going to be a prohibiting obstacle.”
For most new business owners, that excitement at the beginning is often met with the aching pain of feeling financially frozen and confused about what to do next.
“I loved brining, and I was having success at a farmer’s market, but I didn’t know how to develop a business plan to enter broader markets,” Emiliana says. She felt stuck until she heard about her trustee La Cocina, which helped her develop her idea and introduced her to funding through Kiva Zip.
When I asked Lance to describe his initial reaction to Kiva Zip, he emotionally reflected that being “someone who has taken care of and helped people all my life, it is deeply moving to ask for help and have the community respond.”
Kiva Zip seeks to be a place for entrepreneurs to reach out for help, share their dreams and connect with people who can offer a solution. Emiliana described how hesitant she was to take on any debt. But once she acknowledged she needed outside money in order to grow, she also realized that traditional credit options were not available.
“Kiva Zip is an invaluable resource for entrepreneurs,” she says.
It is not uncommon to feel like technology has made things more difficult, confusing and disconnected. But the Kiva Zip model is a major example of how technology can be used to do the exact opposite.
“I didn’t think character based lending existed anymore. It’s an amazing use of technology to bring us back to the basics,” Cristian, founder of custom cabinetry maker J Style at Home, told me about his initial reaction to the Kiva Zip model.
Putting yourself out there publicly can be intimidating. Lance recalled being nervous that Zip “was a temperature gauge for interest in my business. But as I watched the gauge move, it was incredible. It felt like people wanted me to succeed in a real and immediate way”.
The borrowers all seemed to be initially attracted to Kiva Zip’s interest free capital, but soon realized that sharing their stories and connecting with their lenders offered an additional bonus: free advertising and marketing.
Emiliana couldn’t believe how fast her loan was funded by complete strangers. “It’s reaffirming and morale boosting,” she said.
Richard described his lenders as “his team” and Cristian remarked, “I am excited to share every success with them and I’m inspired and driven by their support.” But, it was Bryan who expressed it best: “Having 45 people invest in Pac Brew Labs is like hiring 45 brand ambassadors.”
For some borrowers, being on Kiva Zip comes with some concerns. Several expressed guilt -- “There are people worse off than me. Why do I deserve a loan?” Self consciousness --“What if one of my clients saw my profile?” And worry -- “I want to present myself in a professional manner and have a pristine product, but I need money in order to do that.”
Being an entrepreneur is an exercise in taking calculated risk. You do as much as you possibly can and then you get to a point where you realize you have to reach out. When I ask Emiliana about the entire process, she quickly replies, “It’s hard to picture this going any better.”
When I asked what they would like to change about the existing Beta model of Zip, the most common suggestion was understandably to increase the flexibility of the terms. Cristian reflected that “More money would mean I could do more and grow faster,” and Bryan informed me that “the one-year term limited the amount” he was comfortable borrowing.
Nevertheless, each borrower was grateful for the funds and overwhelmingly happy with the process. Emiliana told me that “a loan from a traditional bank would have meant that one bad day, one misstep would have been the end.” But the Zip loan offered her a little breathing room and a chance to look at new opportunities.
Bryan of Pac Brew Labs summed it up: “Kiva Zip encourages you to put yourself out there in a way that nourishes the things that are most important to any new business owner: connections, relationships, resources and growth.” ...(continued)
On Thursday, May 17, we are participating in an awesome event called "Push Up Charity", organized by Udemy.com.
We (the Zip team) will not be doing the push ups... but rather, our friends at GitHub (a neighborhood start-up focused on social coding) have decided to do push ups to raise $ on our behalf! GitHub will be one of 5 start ups competing to get funds for their non-profit of choice, by doing push ups on the Minna Gallery stage.
The winning team will be able to give 40% of the total raised funds to its charity of choice, and the remaining 60% will be split across the other 4 non-profits. Zip plans to use the proceeds received as capital to fund some loans.
You may be asking... So... what should I do? Well, great question! You can:
1. Come join the party! Tickets are $10, and proceeds go back to the non-profits (buy them in advance, here: pushupcharity.org)
2. Invite your friends (via email, or on Facebook)
3. Can't come, but want to support Zip? You can do so here!
4. Make sure the employees at GitHub are working out diligently until May 17 :)
To summarize... the Details:
Pushup Charity: Startups Do Pushups for Charity
May 17, Thursday @6pm
111 Minna Gallery (111 Minna St, SF)
To find out more, visit: http://pushupcharity.org/ ...(continued)
More than a few people have asked us why we decided to work with for-profit social enterprises (FPSEs) like Re: char during the Zip pilot. It’s a good question. After all, by definition, a for-profit social enterprise is an organization that seeks to affect environmental and/or social change directly through its business. The implication of course being that any borrower on Zip vetted by such a trustee organization must invariably use part/all of their loan to purchase goods or services from that company.
This raises a number of concerns. For starters, at scale wouldn’t a trustee like Re: char be incentivized to push their goods on borrowers irrespective of the product’s quality? Furthermore, does Kiva have the capacity to assess whether or not the goods/services that a FPSE trustee provides are socially impactful? Lastly, given that many FPSE may not provide wraparound services/training comparable to their non-profit counterparts, how effectively do they promote poverty alleviation?
These fears are valid; and as is typically the case with any new initiative, we are a long way off from having all the answers. However, we think we have a framework in place that will help us get there.
1) Partnering with organizations we believe in - Re: char empowers subsistence farmers in the developing world to increase their crop yields and supplement their income while trapping atmospheric carbons and enriching depleting soils. That’s definitely something we can get behind.
2) Starting small – We currently have 7 borrowers on Zip from Re: char. On average the loan sizes for each of these individuals is roughly $70 USD. That’s less than $500 (or for those of you techies out there, that’s less than the most basic version of the ‘new ipad’)! In other words, the upside for Re: char is quite small.
3) Assessing impact – We want to make sure our trustee partners are creating positive social impact, regardless of who they are. To that end, we will be conducting mid-loan surveys with each of our lead borrowers to gain a better of understanding of what the loan was used for, and whether or not the borrowers’ lives were tangibly benefited from the money that they received. Thus, if we discover that a particular product/service provided by a FPSE is not useful, we will either work with the trustee to improve their offering or pause the relationship.
4) Learning from others – By implementing market-driven technology solutions FPSEs the world over are not only helping to alleviate poverty but to democratize information as well. Re: char for example manufactures kilns that allow farmers to convert plant waste and other biomass into biochar, a natural soil supplement; whereas MTZ, Kiva.org’s newest non-traditional partner, employs low-income individuals to provide poor communities with an easy, quick, and safe way to send money within Zambia. The examples and the opportunities to learn are endless.
Thus, while it is true that we have yet to figure out a sustainable way of working with FPSEs, rest assured: by continuing to partner with small, agile organizations like Re:char, run by a teams of inspired individuals who are determined to make a social impact, both through honest self-reflection and constant iteration, we will find a viable solution. Even as we move into uncharted territory. ...(continued)
Kiva has always been about much more than transferring $25 from one person to another. It has been about connection. Through a new feature called Conversations, we are taking connection to the next level.
Kiva Zip was designed so borrowers could tell a comprehensive story. We wanted borrowers to voice not only their aspirations as entrepreneurs, but also who they were as individuals - with interesting childhoods, rich experiences, and hardships, at times. In these stories, lenders could find common ground with borrowers and feel an enhanced sense of connection. But all rich connections go both ways. It seemed only natural to next create a space in which lenders could have a voice, and through which borrowers could feel more deeply engaged with lenders. Thus, Conversations was born....(continued)
It’s been a challenge on this project to balance our desire to test and learn quickly – by making a number of different types of loans to different types of borrowers, with our desire to keep Kiva Zip a small, pilot project. We are delighted to announce that we recently received a check for $100,000 from an extremely generous donor, to be used as loan capital, and help us to strike that balance.
We will be principally using this capital to match lender contributions on US loans, which are much larger than Kenyan loans, and typically take a lot longer to fund. For every $25 you lend on these loans, $25 will be added to that loan – so you will have $50 of impact for the price of $25! So get lending!
We will also be able to use this capital to fully fund borrowers who have been up on the site for a while – which will greatly increase our flexibility, and ensure that Kiva Zip borrowers have a smooth experience.
As a Kiva Zip team, we wanted to publically thank this donor, who wished to remain anonymous, for this incredible generosity. Lender capital has been a significant challenge for us over the last few months, and your generosity will allow us to focus our time and resources on the innovations that are the raison d’être of this project....(continued)
This map is really cool. It shows you all the locations around San Francisco where you can buy Pacific Brewing Laboratory’s Squid Ink IPA. To the sophisticated palate, “this twist on a traditional West Coast IPA adds new complexity, aroma and color to a great beer style”. To my palate, it just tastes great (although be careful, it’s 7% ABV). Either way, it’s well worth checking out at City Beer, La Trappe, or one of the other bars and restaurants around town that now serve it.
If you take a look at our Lend page, you will find Pacific Brewing Laboratory up there – they were the first ever Kiva Zip loan funded in the US, and also the first business to be endorsed by an individual trustee. Something else that’s really cool is that Bryan’s “laboratory” (think garage crossed with chemistry classroom) is literally two blocks from the new Kiva office in the SOMA district of San Francisco. This proximity allowed us to host a low-key Kiva Zip launch party there a few weeks ago, where my love of Squid Ink IPA blossomed. ...(continued)
I had a really interesting conversation the other day with Julia Kurnia and John Fay, who are both on the leadership team of Zidisha (www.Zidisha.org). Over the last few years, Julia and the team at Zidisha have been pioneers in the direct person-to-person lending space, and their early success has been one of the sources of inspiration for this Kiva Zip pilot.
Julia founded Zidisha in 2009, and since then, Zidisha has made over 200 loans to borrowers in Senegal, Kenya, Indonesia and Burkina Faso. The repayment rate is formally as high as 97.7%, although a higher proportion of loans are paying back late, especially in Senegal.
In order to obtain a loan on Zidisha, borrowers need to have some form of verifiable credit history – although this does not need to be with a bank or an MFI (for example, it can be with a rotating credit scheme). Once this history has been confirmed by Zidisha’s credit verification partner, borrowers are eligible to apply online for a loan up to 50% as big as their largest previous loan. They then have the potential to get increasingly larger loans from Zidisha in the future. Borrowers pay a one-time “registration fee”, an interest rate to lenders (on average this has been under 3% historically), and a 5% fee to cover Zidisha’s operating expenses. ...(continued)
I grew up on a quiet dead-end street in Seattle, Washington, a sleepy secluded city that is known, if at all, for three things: Microsoft, Starbucks, and rain. It should come as no surprise then, that my childhood like my neighborhood was sheltered. So much so, that even when my family ventured outside the country to visit relatives in faraway India, a part of me always felt faintly distanced from the rawness of the world around me.
Over the years, this feeling which began as a pin prick grew unbridled into a migraine that could not be suppressed. I became restless, and from my adolescent years into my early twenties, a feeling of discontent swept over me.
It wasn’t until I joined Kiva in 2010 that I began to nourish my inner urge to become a more active participant in – not just an observer of - the community around me, both close to home and abroad. By surrounding myself with individuals who had such a passion and zest for engaging with cultures and peoples all around the world, I felt like I was one step closer to finding myself.
As it turns out, my journey in self-discovery came to a head in early August when I was given the opportunity to become one of the business leads on a yet undefined pilot project called Kiva Zip. The goal of which was to explore ways to make Kiva’s existing platform more direct – to allow lenders to send money directly to borrowers through the internet and mobile phones. ...(continued)
It is with great pride and pleasure that I write this blog post, on the day that we launch Kiva Zip.
As I survey the entrepreneurs who will be impacted by the support of Kiva Zip lenders, I am truly inspired by the vibrancy and diversity of their personal stories, and grateful for our opportunity and ability to help them receive the loans that will allow them to achieve the goals they have for their businesses. From the Bay Area-based men and women who I have had the privilege to meet over the last couple of months, to the smiling faces that my colleague and friend Akash has met in Kenya – I am tremendously excited and honored to serve them all.
Here at Kiva, we are determined to keep innovating with industry-improving ideas and approaches. The Kiva Zip project is one example of this determination. Throughout the Kiva Zip website, we are piloting new concepts, approaches and technologies, with the ultimate aim of benefiting the borrowers whom Kiva strives to serve.
By partnering with new types of organizations like technical assistance providers, churches and schools, our intent is to genuinely expand access to capital for entrepreneurs who otherwise lack it. Unfortunately, in both the US and Kenya, there are geographic areas, industries, social strata, and ultimately people that are currently not served by the socially and financially responsible micro-finance institutions that Kiva is committed to partnering with. Over 25% of the US population is currently unbanked or under-banked, and that number is as high as 60% in Kenya. One of the key aims of Kiva Zip is to help to provide financial services to these people. ...(continued)
Welcome to Zip -- a project to explore more direct ways of connecting lenders and borrowers through Kiva. Today, we are launching direct person-to-person lending pilots in two geographies: California and Kenya.
Kiva was founded to connect people, through lending, to alleviate poverty. Six years later, we are just beginning.
We are witnessing a great exodus. The less fortunate people of this planet are entering into a global, digital village. Our generation will be the first where every person on this planet will have the ability to connect with every other person. The Web, mobile phones, mobile money, and social networks will be the dusty roads that connect every villager to every villager. As many have noted, this could be a good thing or a bad thing. It is up to us to make it a good thing.
For years now, we've debated various ways of connecting lenders and borrowers more directly. ...(continued)