A Microloan for a Major Difference

Our country needs an economic recovery crowd funded by the American people and sustained by small businesses. Through crowd funding microloans to small businesses, the power to shape the course and success of economic opportunity and job creation is in each of our hands.

Small businesses are the cornerstone of the nation's economy and a stepping stone to the American Dream. They are the engine of local and national economies, creating two out of every three net new jobs in the country.

Many small business owners and aspiring owners have all the elements of success -- except access to capital to start or expand their businesses and create jobs. According to U.S. Small Business Administration Chief Karen Mills, "Small-dollar loans and loans in underserved communities are still not back at the levels we need them."

Job creation is one of Kiva's central goals. Microloans can serve as a bridge for many small business owners, providing commercial credit history and working capital to start up, expand operations, and hire or retain employees. A crowd of people lending as little as $25 on zip.kiva.org gives each of us a chance to support thriving local economies, communities, and jobs. Loans funded through Kiva have a 98 percent repayment rate, so the money you lend to a small business owner is likely to come back to you. By connecting people through lending, Kiva has empowered small businesses and served as an important catalyst for positive change and job growth.

In November 2011, Kiva launched a new pilot program in the United States called Kiva Zip. Kiva Zip exists to drive innovation in person-to-person lending with the aim of filling the critical lending gap that hampers job creation among small businesses. We provide 0 percent interest loans up to $5,000 for small businesses and entrepreneurs who are financially excluded and underserved. In the past year, we've helped 135 entrepreneurs in 28 states access over $400,000 in capital. And this was only Kiva Zip's first year of operations as a pilot program.

Kiva Zip's growth was made possible through our partnerships with trustees around the country. Trustees are typically organizations that provide support and assistance for entrepreneurs, whom they endorse for a Kiva Zip loan. Once endorsed, a borrower can post their profile on Kiva Zip where their loan is crowd funded, $25 at a time, by lenders like you visiting the site. Across the nation we are partnering with many types of trustees such as Small Business Development Centers, socially focused startup incubators, Economic Development Corporations, and micro finance institutions. We have also worked closely with local community organizations, including those that help the homeless, disabled veterans, and formerly incarcerated individuals.

One of our Kiva Zip borrowers, Old Skool Café in San Francisco, used their loan to help provide jobs and training for former foster care and incarcerated youth. Their restaurant confronts the epidemic of violence by providing at-risk youth with a variety of career opportunities that would normally not be available.

Another Kiva Zip borrower, located out of Phoenix, Paper Clouds Apparel, showcases the creative minds and artistic abilities of individuals with special needs and raises funds to provide financial support for special needs schools and organizations. It sells bamboo T-shirts, prints, and greeting cards featuring artwork designed by individuals with special needs. They used their Kiva Zip loan to help hire individuals with special needs to package all of their clothing.

The borrowers we've supported all have their unique stories and background but have one thing in common: They've been excluded in some way from traditional forms of financing and are looking to make a positive impact in their lives and the lives of their families and communities.

Crowd funding microloans to small business owners has a ripple effect on local economies and communities. Every dollar lent to a small business helps to create jobs for your neighbors, who in turn support another local business and then another. As small businesses grow and expand, local economies improve, helping to support schools, city services, and more vibrant and sustainable communities. The dollars that sparked that cycle come back to you, but the cycle you helped to spark continues long after your loan is repaid.

In 2013 we are poised to help more than 500 businesses in the U.S., like Old Skool Café and Paper Clouds Apparel. Based on the data we have collected, the average number of jobs created by each borrower is three. That's 1,500 new jobs that Kiva Zip will help create in just one year. This is all the most striking considering we are in pilot phase and have not fully scaled.

By contributing to Kiva Zip you are helping to support this innovative new approach to crowd funding and job creation, visit our fundraising page at http://www.crowdrise.com/kivazip-jr.

If you would like to lend to an entrepreneur in your community, visit our website at zip.kiva.org and make a loan today.