Kiva.org, the world's first personal microlending website, and Visa Inc. (NYSE:V), a global leader in payments, today announced Kiva City, a new program that will extend small business access to microloans in U.S. cities with the greatest need.
The Kiva City program is the latest component of Visa's partnership with Kiva to help U.S. small businesses by expanding their awareness and understanding of microfinance opportunities. The Kiva City program, kicking off in Detroit, was launched as part of a commitment announced today by President Bill Clinton on stage at the Clinton Global Initiative America conference in Chicago.
Kiva City aims to spur job growth and economic recovery by connecting Kiva's global network of 592,000 individual lenders with the owners of small businesses throughout the country. With very few microfinance institutions operating at scale in the U.S., Kiva City helps address this challenge by tapping the power of local communities to come together and bring Kiva to their city, particularly those whose small business communities have been most impacted by the recent economic downturn. According to a new study by the Economist Intelligence Unit, commissioned by Kiva and Visa, 20 of the nation's 50 largest metropolitan statistical areas have lost at least one percent of their small businesses from 2006 to 2008. This represents approximately 15,000 businesses.
The Kiva City program launches today in Detroit, which ranked fifth in the study's list of the top U.S. small business trouble spots. The microloans, made possible through Kiva's lending partnership with microlender ACCION USA, a member of the ACCION Network in the U.S., will offer Detroit area small businesses an additional option for accessing capital that can be used to fund operations, ranging from purchasing equipment and paying rent, to hiring and retaining employees, to offering promotions.
"Since launching in the U.S. two years ago, we have worked with our partners to replicate our successful global model, empowering each and every American to help our economy by adding as little as $25 to a small business owner's loan," said Premal Shah, co-founder of Kiva.org. "But as our study shows, the needs in the U.S. are widesn the U.S. are widespread and many regions simply don't have microfinance institutions operating at scale. Now, spurred by Visa's commitment to small business, we are able to expand our reach and, as a result, open new avenues of capital for small business owners across the country."
How the Program Works
With Kiva City, civic leaders and community members alike have the opportunity to effect meaningful change. The new program extends Kiva's Internet-based lending model to underserved communities throughout the country—even where microfinance institutions have yet to establish local branches. Working in concert with Kiva and microlending partners, communities join forces and commit the resources to conduct on-the-ground outreach to small business owners to support the three components of microlending: sourcing the businesses to apply for microloans, administering the loans and funding the loans. The average size of Kiva's field partner loans in the U.S. is $7,000.
"ACCION USA is the vital link between Kiva lenders, communities and the small business owners in Detroit who need our help," said Gina Harman, President and CEO of ACCION Network in the U.S. "With the visibility, community group connections and committed loan funds provided by Kiva, we believe Kiva City and its launch in Detroit will serve as a model for bringing solutions to more cities across America."
Detroit became the first Kiva City in partnership with Michigan Corps, a social network of local and global Michiganders committed to positive change in their home state. "Through our partnership with Kiva and ACCION USA, we've been able to bring the tools of microfinance to our neighborhood businesses so that they can invest in their growth. Through local networking events, church gatherings, and neighborhood BBQs, we have built an engaged community of small business owners and lenders alike. Detroit is proud to be the pioneer of the Kiva City model." said Anuja Jaitly, co-founder and executive director of Michigan Corps.
U.S. Small Business Trouble Spots
The Kiva and Visa Study of Small Business Trouble Spots looked at small business trends in the 50 largest metropolitan areas to identify the degree of small business stress there. Some of the more heavily affected regions, like Detroit, also experienced decreases in their employment levels by more than five percent.
The ten regions that experienced the greatest losses of small businesses were:
* Cleveland-Elyria-Mentor, Ohio
* Miami-Fort Lauderdale-Pompano Beach, Florida
* Pittsburgh, Pennsylvania
* Columbus, Ohio
* Detroit-Warren-Livonia, Michigan
* Orlando-Kissimmee, Florida
* Minneapolis-St. Paul-Bloomington, Minnesota/Wisconsin
* Kansas City, Missouri/Kansas
* Providence-New Bedford-Fall River, Rhode Island/Massachusetts
* Milwaukee-Waukesha-West Allis, Wisconsin
"Our work, which includes providing products, services and resources to the small business community, confirms that while the economic challenges that small businesses have faced recently are very real, small business owners are resilient and optimistic," said William M. Sheedy, Group President, Americas, Visa. "We are pleased to continue to work in partnership with organizations like Kiva to help serve small business owners and spur job creation."