October 20, 2010; Source: San Francisco Chronicle | Kiva, the San Francisco-based nonprofit credited with bringing microlending via the internet to developing countries, has now added the Gulf Coast to the places where it is making microloans in the United States. While Kiva is still primarily focused on overseas lending—through its internet-based program that lets individuals make loans for as little as $25 to entrepreneurs—it has been running pilots in New York City and San Francisco since the summer of 2009.
The goal has been to determine willingness of individuals in this country to support local entrepreneurs and small businesses with microloans. As part of that growth strategy, Kiva announced earlier this week it is forming a partnership with ACCION, which the San Francisco Chronicle says is the “nation’s largest microlender,” to make loans in Louisiana. Kiva believes microloans can help people in cities and towns still reeling from the recent oil spill disaster and also rebuilding from Hurricane Katrina’s devastation five years ago. “Kiva wanted to work with field partners in the U.S. who were making an impact,” Premal Shah, president, said. “We felt that working in the Gulf Coast area met that goal.”
Sign up for our free newsletters
Subscribe to NPQ's newsletters to have our top stories delivered directly to your inbox.
By signing up, you agree to our privacy policy and terms of use, and to receive messages from NPQ and our partners.
Although some have argued that Kiva is diluting its original mission by expanding microlending over the web to this country, Shah says his group is letting people “vote with their wallets” about where they want to lend. He adds that since starting the two U.S. lending programs, people have been signing up in the thousands on the Kiva website. In addition to money for loans from individuals, contributions from U.S. corporations have helped Kiva expand its lending and presence at home. For instance, on Tuesday, San Francisco-based Visa awarded Kiva a $1 million grant, which the Chronicle says will allow it to “build awareness of microlending among small businesses in the United States and increase the number of loans they obtain.”
The Chronicle cites one estimate that suggests that small businesses in the U.S. go “unserved by banks at $20 million.” The article also points out that “banks of all sizes typically do not make business loans of less than $50,000, because the profit is not worth the risk.”—Bruce Trachtenberg
