When it comes to Kiva’s impact on business, the latest statistics are stunning. The organization aids borrowers in a whopping 80 countries. This week, they crowdfunded about $2.5 million in loans. In total, they’ve helped 1.6 million lenders deliver more than $1 billion to 2.6 million borrowers. And, in this era of heightened diversity awareness, it’s worth mentioning that more than 80% of Kiva’s borrowers are female.
Headquartered in San Francisco, Kiva has long branded itself as the microfinance lender for business owners in impoverished nations. Many of the ventures that receive funding are located in places like Africa, Central America, and South America.
So it’s quite noteworthy that Kiva has expanded their lending services to the United States. Visit Kiva.org today and you’ll see a wide range of lending opportunities for American businesses. The loan seekers are described as “financially excluded and socially impactful borrowers,” which can pretty much describe just about any business owner.
As an example of the current lending requests, you can help Erin and Michael expand their food truck business in Pittsburgh or help a guy named Rawlston open a new restaurant location in Brooklyn.
The Kiva model kicks off when an entrepreneur submits an application for a loan, citing the business need and opportunity. For the next couple weeks, the entrepreneur proves their creditworthiness by inviting their friends and family to lend to the loan. After this phase, the loan request goes public on Kiva.org for up to a month. It is viewable by all 1.6 million lenders around the world.
Once a loan is funded, the borrower has up to three years to pay it back. Historically, Kiva has about a 97% repayment rate.
So what does Kiva’s U.S. operation mean for entrepreneurs? Most importantly, it gives them another arrow to choose from in the lending quiver. This is crucial because the loan application for a traditional bank takes an average of about 30 hours. And if your loan request gets the cold shoulder, as they often do, then you’d have to go through the process all over again.
With Kiva, as well as with lending marketplaces, the application time is cut down to less than 20 minutes. And the chances of securing funding are much higher. For example, a report from the U.S. Department of the Treasury reveals that while loans from traditional banks are only approved about half the time, 70% of loans are approved through a lending or microlending marketplace.
Whether you choose to crowdfund your loan or go with a marketplace model, it’s always good to know your financing options – and it’s worth considering whether Kiva should be one of those options.