In the August 2013 newsletter, we introduced Kiva Zip, an online platform that allows entrepreneurs to crowdfund 0% interest loans of up to $5,000. Kiva Zip is a program of Kiva, an international non-profit organization. Since we first covered Kiva Zip, a focused local initiative, Kiva City Pittsburgh, has been launched and over thirty Pittsburgh area entrepreneurs have utilized the platform to access capital for their businesses. This article provides an update and information on how your neighborhood can take advantage of this program.
What are some local examples of businesses that have borrowed via Kiva Zip and how did they use their loans?
Why would entrepreneurs choose to borrow via Kiva Zip over a bank?
Many small businesses need very little money to overcome a hurdle, and it isn’t profitable for banks to process such small loans. Alternatively, the owner may not be eligible for a bank loan because their business is too new or because the owner has a short or damaged credit history. By crowdfunding loans via the internet, Kiva Zip enables business owners to borrow small amounts of money from individuals all around the world who want to help them achieve their dream. Collectively, these tiny loans, which can be as little as $5 per lender, help the business owner to reach their target amount.
How does Kiva Zip enhance economic development?
Kiva Zip helps residents of neighborhoods like yours to open or expand a business. In addition to providing the business owner with an income, neighborhood businesses may hire others in the area to work for the business or provide needed services, such as maintenance or marketing. Finally, the business may enhance the neighborhood by offering a product or service that residents can now obtain close to home.
How can I help entrepreneurs in my community take advantage of this opportunity?
Community groups can help promote this opportunity by running an article in their online or paper newsletter about Kiva Zip. They can also invite a Kiva Zip representative to speak at a neighborhood meeting or event. Individuals and organizations that are well connected can also serve as trustees – every borrower must have the endorsement of a Kiva Zip trustee in order to post a loan.
For more information on Kiva City Pittsburgh, visit www.kiva.org/Pittsburgh. To request a newsletter article or arrange a meeting or speaking engagement, contact Emily Keebler at firstname.lastname@example.org.