Join The Kiva Movement
Community participation is always a hard thing to build. We often will “like” something on social media (for various reasons), and yet, never click thru on the link to actively participate. The same is true for making loans on Kiva to support small, local businesses we love.
We have seen a ton of growth in the regional Kiva community over the past 18 months in Louisville. We have gone from zero activity and little lender presence, to over 35 businesses being funded with more than $200,000 lent out! Person-to-person lending and local matching organizations are making these loans at 0% interest, and with no fees.
These are amazing statistics. And yet, we have a TON of room to grow in supporting the businesses we all love. A technology platform like Kiva, allows everyone (in our region that’s 1.3 million people) to become a lender…helping a small business flourish with as little as $25.
You might lend to an ice cream shop that becomes your new hangout spot, or you might lend to increase the number of minority business owners in the city. Lenders lend for a variety of reasons. You choose the business owner you want to support, and every dollar you lend goes to that borrower!
“When you can help people realize their business visions and dreams; and get your money back, and have the ability to reinvest that money in another good project that makes the world a better place… I mean really, there’s very few things that are better than that!” – Mayor Greg Fischer
Increasing access to capital for small business bolsters a thriving economy. It’s a benefit to everyone in the region – and it’s a ton of fun too!
“Fully funded! Thank you to everyone! I must say personally that this has been one of the most amazing experiences of my life!” – Danny
“I am BLOWN away and thrilled at the support I’ve received so quickly. Thank you to all who have supported me. Big or small, it has all made a huge difference and I feel very encouraged!” – Kimberly
I have shared many of these loans on social media over the past 18 months. These posts get a ton of “likes”, comments, or reshares, but the conversion into a new loan has not been that great. Though people “like” the fact these businesses exist, they haven’t fully understood the personal value in participating as a lender. Perhaps by sharing some screenshots from my own account and explaining a little more some of the details around Kiva, you too might find it to be a great way to invest money in businesses you care about and in a way that gets repaid.
Wait, you keep saying loan… I thought I was “giving” my money to them or exchanging it for some merchandise like on Kickstarter or Indiegogo?
Kickstarter, Indiegogo, and GoFundMe platforms are great and they each have a part to play in the bigger story of funding things that matter. In fact, if the goal of a new venture is to build brand awareness and raise capital for a first run of manufacturing, then Kickstarter/Indiegogo/etc might be something I would recommend. Or if you are raising cause-oriented capital, GoFundMe may be a better fit. On these other platforms (focusing on those that are for new ventures: Kickstarter/Indiegogo), you are not loaning anything, but purchasing something instead. It may be a T-shirt or a coffee mug or a pre-order on the new device, but there is still an order made and an order to be fulfilled.
Not only is Kiva different, being a loan, it’s a small business loan with no interest and no fees. It is (in some ways) like an advance on future earnings of a business. There has been some research done on the dangers of other platforms that raise money by offering prizes, because they inundate a small business with an unrealistic volume of orders that need to be fulfilled. In fact, many of these campaigns ship late, and some not at all because they didn’t fully price out the cost to manufacture and/or had not coordinated with manufacturing contacts to produce their high volumes.
Sometimes, what a business needs, is simply to take the next step and not the proverbial giant leap.
So in light of this, Kiva becomes a very powerful tool for businesses to grow, and at a manageable rate. It truly is the most business-friendly platform. No orders to fulfill; no interest rate or unwieldy terms to deal with; no equity to sacrifice. It is simply hustling to build the business, and repay the loan.
As it is repaid, you (the lender) can roll it into another loan of your choosing, or you can even withdraw your money and deposit it back in your bank account.
Do I really get to choose the business I want to support?
Kiva.org pre-dates most crowdfunding platforms. It has been around since 2005 and in that time, over one million lenders have lent over $700,000,000 to over 1.5 million borrowers in over 80 countries! Kiva is a non-profit that pays for overhead through donations. This ensures that every dollar lent makes it to the borrower. Kiva was a Beta internally at Kiva to allow for direct lending and to bring this amazing technology to the United States. With this domestic platform, every person that makes a loan to a business, IS DIRECTLY LENDING TO THAT BUSINESS. You get to choose. You get to set the amount. You get to support a business you may already have a relationship with or one that fits your interests you never knew anything about before. You are able to directly support things that matter to you.
$5,000/$10,000? Really?
The national average microloan is $9,372. Most banks, too, find lending at this small level, cost-prohibitive, and therefore turn these types of business loans away. According to Kiva, 7/10 small business loans are denied traditional financing. This first, risk capital, is the difference for some companies in starting/surviving and closing shop.
“Kiva was crucial for the start of my new business – with my $5,000, I paid the security deposit, gave my first month’s rent, and bought all of the kitchen equipment I needed. The peace of mind I felt after I got my loan and was able to secure my shop’s location as soon as I found the perfect space was priceless. Kiva is a brilliant way of getting people involved and personally invested in folks who have big dreams but small wallets. I couldn’t be more grateful for the solid foundation my loan provided for me.” – Madeleine
“Without a loan from Kiva, we would probably still be months away from opening our business. Obviously, in the States it’s very difficult to open a brick and mortar store on a $5000 budget, however, that loan has meant so much more to us than a dollar amount: empowerment that we can do anything we put our minds to, we’ve become role models for others in our community and in other parts of the world, and a renewed hope in humanity in that complete strangers want to see us succeed as much as we want to succeed.” – Chenica and Ricka
In all of this, I realize that this method of lending as a form of participation in the local economy is a very new concept. I thought that by sharing my family’s Kiva activity and talking about the lending experience, more folks might better understand the power, compassion, and fun that is behind lending (and relending) to businesses that matter to us.
Start lending to local Louisville businesses on Kiva today!
