On Thursday June 8th, we attended the Kiva Pittsburgh Lunch and Learn to find out how this non-profit organization helps small businesses succeed with loans funded by friends, family members, and the Kiva community alike.
History of Kiva
Kiva Pittsburgh is a subsection of Kiva, which is an international non-profit that’s been providing microloans to entrepreneurs around the world since 2005. Nearing one-billion dollars lent to business owners over the history of Kiva, the Kiva network has found its success through the growing global community of lenders.
Every week, Kiva lenders contribute about $3,000,000 to entrepreneurs around the world. The vast majority of that money is “recycled” from loans that other business owners are repaying. In addition, 80% of lenders come from outside the small business’ network, which is positive especially for those who might not have the strongest personal network.
After the recession, Kiva recognized a need for loans in the United States, and it has been a presence since. As income and wealth inequality are on the rise in the United States, many small businesses faltered. But, Kiva believes in small businesses. Kiva believes that “a vibrant small business sector can create jobs and economic vitality in otherwise-marginalized communities, and help to combat this creeping inequality.”
While Kiva believes in this ideal, entrepreneurship is still under threat in the United States since the recession, and this is because of a lack of access to capital – especially for very small and early-stage businesses. This is where Kiva U.S., which includes Kiva Pittsburgh came into play.
Dreams are Universal. Opportunity is Not.
Loan recycling is powerful and proven successful through Kiva. But what exactly does Kiva offer? Kiva assists with small business loans of $500-$10,000 with 0% interest, and no fees. Small businesses can use up to 36 months and monthly repayment installments. Additionally, loans are administered via PayPal, which is free of charge. Kiva is flexible loans, to help people accomplish their dreams.
Kiva has a huge network of lenders, but before small businesses have access to that network, the small businesses must bring the first lenders to their loan through Private Fundraising on the site. This demonstrates the following:
That they have good “credit” among those who know them and their business
Opportunity is not universal. Sometimes small business owners are at a disadvantage from traditional lender scenarios. Because of that, Kiva does not require formal credit scores and credit reports, collateral, tax returns, proof of income, pay stubs, bank statements or business plans. Kiva helps bridge the gap between dreaming and reality.
Kiva Versus Kickstarter
Kiva is also unlike other crowdfunding sites, like Kickstarter. It does not require a video, that you come up with and follow through on rewards for contributors, and that you attract all the contributors. In addition, in a Kickstarter campaign, the lenders do not get paid back.
Both Kiva and Kickstarters are all or nothing and unless all money is raised, the small businesses won’t get paid. However, the Kiva community likes to see people succeed. In fact, in Pittsburgh, 93% of small businesses are funded. It goes to show that the Kiva network is supportive in Pittsburgh.
Kiva is also unique because they work with businesses at their beginning before they may even have something to show for their success. While Kiva takes some financial factors into consideration, they also embrace risk. Kiva focuses more so on your character by evaluating whether or not you’ve supported other Kiva borrowers, what likes/follows/reviews you have on a social media platform, getting endorsed by a Kiva Trustee, your Private Fundraising, and a good photo and written description.
Establishing and Growing your Kiva Profile
For anyone who missed the Kiva Pittsburgh Lunch and Learn, but would be interested in filling and creating a Kiva profile the steps are extremely simple, and they will walk you through it. Business owners do have some eligibility requirements, including:
In addition, Kiva does not allow illegal businesses, businesses involving adult entertainment, gun shops, businesses that primarily make or sell tobacco products, lending institutes, pyramid marketing schemes, contract workers of large corporations- ex: Uber, AirBnB, or direct sellers like Mary Kay/Avon.
If you fit the requirements and would like to build a profile, remember this: Kiva cares about character. Tell your personal story, connect on a level that everyone understands, and draw on common experiences.
If you think that Kiva Pittsburgh is the place for your and you’re ready to submit a loan application, head to borrow.kiva.org or if you’d like to obtain more tips, visit www.kivaushub.org.