How Kiva is supporting US entrepreneurs (and how you can too)

Small businesses comprise 99.9% of all firms in the United States. Between 2000-2019, small business entrepreneurs created 10.5 million net new jobs, compared to 5.6 million created by large businesses.

Despite being the primary employers in the U.S., small business owners increasingly struggle to access capital. The majority—80%—are unable to obtain bank loans and community banking funds have decreased over 50% in the past decade. Entrepreneurs in unserved communities are even more likely to get rejected for traditional forms of capital.

Kiva US aims to solve this problem. We believe strongly in the power and potential that small businesses can have on underserved communities. With nearly 70% of loans going to female-identifying small businesses and 70% of loans going to BIPOC owned businesses, we recognize the immense impact that they have, both locally and nationally.

Kiva US is the direct lending arm of Kiva that offers domestic small businesses 0% interest loans with no fees up to $15,000. We strive to find new ways of elevating local entrepreneurs by supporting their communities and providing them access to capital.

The Kiva US team is celebrating National Small Business Week, May 2-5, by celebrating our newest partnerships and the launch of new business support services. Over the last year, we have been able to deepen our impact through continued strategic focus on building community.

Our commitment to entrepreneurs

In 2021, Kiva’s work in the U.S. continued to grow, with more than $8.7M in crowdfunded loans to over 1,200 small businesses – the program’s largest year since its inception in 2011. We are excited to share a small yet powerful glimpse of the impact we have made to serve the most financially excluded borrowers. From 2019-2021, Kiva US loan profile shows:

• 68% of loans going to female identifying small business owners
• 50% of loans going to African American small business owners
• 70% of loans going to BIPOC owned businesses
• 76% of businesses are receiving financing for the first time
• 67% of entrepreneurs have owned their business for less than three years (startups often have a very difficult time accessing capital)
• 66% report that their Kiva loan increased their business revenues
• 64% report their Kiva loan increased their business confidence
• 97% of borrowers believe they could not find an alternative to Kiva as a source of capital

As we continue our efforts, 2022 is looking to be another record year for Kiva US; we are projecting to support over $10M in microloans to America’s most financially excluded small businesses. To accomplish this, we are doubling down on our investment in local communities, building new partnerships that offer business support services, and adding new value to entrepreneurs with business credit reporting, larger loans and an improved borrower experience.

With a loan of $5000, Scott was able to grow and expand his carpenters apprentice program.

Our focus on community

Community is part of Kiva’s DNA, and Kiva’s efforts to rethink creditworthiness are bolstered by local, national, and international communities. In addition to our crowdfunding model that allows over 150,000 lenders a year from all over the world to financially support entrepreneurs with as little as $25, Kiva also encourages community-based organizations to participate in our social underwriting process through borrower endorsements.

Kiva US also harnesses the power of community through our Hub program. Hubs are economic development organizations who act as locally based Kiva ambassadors.

Of the 1,200 small businesses and more than $8.7M in 0% loans funded and disbursed last year, more than half were directly supported by our incredible 40+ Kiva Hubs. These are local organizations invested in the success of small business and economic inclusion in their community. Hubs manage the Kiva borrower pipeline in their respective geographic area by staffing a Kiva-trained Capital Access Manager, who supports local entrepreneurs throughout the Kiva process.

These organizations are partners in our mission to expand financial inclusion, and they are fundamental in helping US small businesses access not only the first rung of the capital ladder, but also various types of technical assistance. Hubs not only support more financially excluded borrowers, but they also see higher repayment rates.

Below are the amazing partners who joined our community in 2021:

• Fresno Metro Black Chamber of Commerce (Fresno, CA)
• DC Department of Small and Local Business Development (Washington, D.C.)
• Tacoma-Pierce County Chamber of Commerce (Tacoma, WA)
• Women's Business Development Center (Chicago, IL)
• New Bohemian Innovation Collaborative (Iowa)
• Bayou Microfund (Houston, TX)
• New Economics for Women (Los Angeles, CA)
• African Economic Development Solutions (Twin Cities, MN)
• Carolina Community Impact (Raleigh, NC)
• Prairie Rose Development Corp (Colorado)
• Village Micro Fund (Atlanta, GA)
• REDC (New Hampshire)

And in Q1 2022 alone, we have already added the following five incredible Hubs to our network:

• Rising Tide Capital (New Jersey)
• Metropolitan Business League (Richmond, VA)
• Forge Fund (Little Rock, AR)
• Cornerstone West CDC (Delaware)
• Idaho Women's Business Center (Idaho)

Please visit our Kiva Hubs page to learn more about our work, apply to be a Hub, and to see a full list of our partners.

If you are part of a local organization that works directly with small businesses and would like to support our social underwriting process by referring and vouching for small businesses during their application process (with no financial liability), please consider applying to become a Trustee. Trustees add credibility to a borrower by vouching for their character, business, and social impact.

Our holistic support services

Our partners in their local communities are truly an integral part of our borrowers’ success. But we do not yet have a Hub or a Trustee in every community. As a result, we have increased our efforts to establish new relationships. We project that these partnerships will enable us to reach approximately 50% of all borrowers who are currently not in a Hub market or close enough to any of our local partners and, therefore, do not currently have access to Kiva-facilitated business support resources. These new resources include:

1. Kiva US Business Support

To continue our ongoing commitment to improving our product offering and providing personalized, relevant support to our Kiva borrowers, we are thrilled to announce the launch of Kiva US Business Support, made possible through a generous grant from Wells Fargo Foundation.

This means all borrowers, no matter where they find themselves in the Kiva journey, now have access to technical assistance. They may explore and pursue a variety of financial and business education topics that will empower them to make sound business decisions and to take steps towards their business goals.

With support through our technical assistance partners such as Verizon Small Business Digital Ready and Start Small Think Big, as well as our very own Kiva US Small Business Advocate, Diana Blue, applicants and borrowers can tap into a vast wealth of entrepreneurship courses, coaching, networking events, legal advice, grant opportunities, and mentoring—all for free!

What’s more, borrowers who actively engage with Verizon’s Small Business Digital Ready platform between now and June 30, 2022 could be eligible for a $10,000 grant.

Technical assistance is provided to Kiva US small business owners and entrepreneurs in a wide variety of industries, from coffee and counseling to bicycles and biotech.

During the pandemic, Kiva US borrower Venius Adams had to pivot from selling her custom-created turbans and yoga clothing at events around Los Angeles to creating an online store. By utilizing Kiva’s business support, she is now rebuilding her brand at pop-ups and boutique stores in Southern California.

“As a Kiva Loan recipient, I am absolutely thrilled and have immense gratitude for having access to this platform that has allowed me to expand and grow my business! Diana has been most kind and efficient in supporting and advocating for the Kiva community of business owners.” – Venius Adams

Kiva borrower Venius was able to grow her yoga clothing brand in Los Angeles

2. Leveraging increased loan size for repeat borrowers

We are inviting select borrowers who have already demonstrated their creditworthiness by repaying one Kiva loan to apply for a loan greater than $15,000 (our current maximum).

3. Providing opt-in business credit reporting

Later in 2022, we hope to launch business credit reporting for those entrepreneurs who want to use their Kiva loan to build their business’ credit.

4. Streamlining the loan application process and offering chat support

We know an entrepreneur’s time is incredibly limited, which is why we are always working to shorten our application and make it easy for small businesses to apply online by providing live chat support throughout the application.

We hope to scale these efforts and exemplify our dedication to more effectively cater to our thousands of U.S.-based borrowers; to improve and identify ways to support them that go beyond 0%-interest loans.

How YOU can support Kiva US

1. Lend to a US borrower, or better yet, set up Monthly Good

At any given time, there are around 100 entrepreneurs across the U.S. that are ready for lender support. Find them here and support them with as little as $25, or set your account to lend monthly—you will be regularly fueling American dreams every 30 days. Remember, it’s a loan, not a donation! The entrepreneur you support will repay you.

2. Share our loan offering with the small businesses you love

Anyone and everyone can become a part of the Kiva ecosystem— as a lender, borrower, volunteer or as a partner. We are seeking partners to help us spread the word about the work that we do. The pandemic has affected all small businesses in different ways and Kiva is here to help entrepreneurs meet those challenges with patient, risk-tolerant capital.

3. Help us build operational capacity with a grant

As a non-profit, Kiva US seeks operating grants to invest in technology and our team; the resulting increases in efficiency and innovation allow us to better pursue our mission. In particular, we know the most effective way to reach more entrepreneurs and more community partners is through our existing borrowers and our existing partners. Setting up an inventive framework to reward borrowers and partners for referring others to join our community is a top priority that requires technical improvements and funds to deliver the incentives.

4. Refer an organization to become a Kiva Hub

Communities facing capital access limitations can set up a local Hub to increase Kiva’s presence and impact in that particular geography. If you represent a community-based partner, CDFI, foundation or locally headquartered company and are interested in amplifying your impact with Kiva loans, please reach out to learn more.

5. Create a Managed Lending Fund

As a Kiva Partner, you can lend and recycle capital to directly fund entrepreneurs through the Kiva platform. Partners exponentially grow the rate of fundraising for the borrowers by 1-to-1 (or up to 10-to-1) matching of each lender’s contribution.

If any of the above opportunities are compelling to you, your organization, or perhaps someone you know, please reach out to us! You can email Eli Cherner (EliC@kiva.org) to discuss ways to partner.

Thank you for reading and for joining us in our mission. We look forward to continuing to expand access to capital and to supporting even more small businesses in the years to come.

Onwards!

The Team at Kiva US