10% interest loanproduct fundedentirely via onlinecrowdfunding
2Designed specifically forfinancially excluded, sociallyimpactful entrepreneurs whoneed small starter loans up to$5,000
3Building off the success (and scale) ofKiva.org around the world...967,972 entrepreneursfunded since 200567 countriesUS$150 mil p.a. incrowd-funded loansUS$1mil every 2.5 days!
4....built specifically around the uniqueneeds of US micro-entrepreneurs
Kiva Zip: reinventing small biz borrowing• Expand access to 0% interest loans• ...To small businesses not otherwise qualified forconventional loans• ...All loans are crowdfunded online from our lendingcommunity• We also lower cost of lending further by using digitalplatforms (PayPal in the US)• Which also directly connects borrowers with a readycommunity of lenders who they can turn into fansand advocates
How ZIP works: example of Victor, SFLenders can alsocheck out his YelpproﬁleRepaid 10months on timeVictor engages hislenders with the“conversations”featureNow applyingfor a second ZIPloan of$10,000Created 5new part-timejobs
How ZIP works: other borrowers“Kiva Zip is an invaluable resource for entrepreneurs”Emiliana, Jarred Brine“I didn’t think character based lending existed anymore. It’s anamazing use of technology to bring us back to the basics.”Cristian, J Style at Home Inc“Having 45 people invest in Pac Brew Labs is like hiring 45brand ambassadors”,Bryan, Paciﬁc Brew Laboratory
Kiva Zip “Trustees” and why they matterIn the Kiva Zip model of character-based lending, “Trustees” -organizations or individuals that work closely with smallentrepreneurs - are absolutely crucial.Trustees are those entrusted to:- Identify eligible and deserving borrowers for 0% interest loan Publicly endorse them on the Kiva Zip website Support the borrower in their business (advice, mentorship,incubator space, networking)Trustees have no financial risk if a borrower they endorse does notrepay, but their reputation is tied to borrowers’ performance.
What’s in it for trustees?EmpowerClientsIf you already work with financially excluded clients(unproven startups, or low credit score entrepreneurs)...Kiva Zip will give the clients you endorse access to 0% businessloans they would otherwise not qualify forPromotewhat youdoIf you already do great work in your community that largelygoes unrecognized or unpromoted...being a Kiva Zip trustee automatically allows you to promoteyour work (in your own words) to >1 mil socially-conscious Kivalenders everywhere. Also participate in Kiva PR initiatives.IncreaseImpact,HelpFundraiseIf your organization’s potential funders care about tangibleimpact (businesses helped, $$ generated, jobs created)...Kiva Zip helps you help more small businesses take off, faster.Endorsing a deserving borrower online takes 15min. Reducingtime and cost for raising capital means you can impact more.
In general, Trustees should endorse only those entrepreneurs whoThey trust to repay (character-based assessment)Possess the financial ability to repay (a new loan doesn’t increase indebtedness)Borrowers: who should you endorse?Character AssessmentKiva Zip leaves it up to trustees tomake a judgment call in these areasMinimum CriteriaMust be met unless there are exceptionalcircumstances• Do you deeply trust that they are the kindof person who will commit to repaying theirloan?• Do they have a viable business orbusiness plan?• Do you know what they will use the loanfor and how it will impact their business?• Will this loan have a positive socialimpact?• The borrowers debt-to-income ratio must beless than 35%• The borrower cannot have over $3,000 in past-due debt• The loan must be less than 75% of theborrowers income• The borrower cannot currently be in foreclosureor bankruptcy• The borrowers annual income must be lessthan $100,000• The borrower must be over 16
Once a trustee has identified a borrower they want to endorse, there are fiveprincipal steps before the borrower can begin fundraising for an interest-free, crowd-funded loan on the Kiva Zip website:Endorsing a borrower is easyTrusteeapplicationTrusteeendorsementBorrowerapplicationTrusteereview1 2 3 4Trustee fills out a‘trustee application’form, telling Kiva Zip(and lenders) whythey want to be atrustee•One-time•Online•20-30 minsFor each borrowerthey endorse,trustee writes asimple onlineendorsement• Describes theborrower’scharacter tolenders•10 minsThe borrower’s turn!Borrower completesa ‘loan application’•Their background•Their business idea•“Why loan to me?”•2-3 hours•Online formOnce submitted,every trusteegets to reviewthe loanapplication•Can choose toapprove•Or suggestchanges,improvements toborrowerKiva Zip team’sfinal review beforeposting it to thewebsite.•Loan beginsonline fund-raising•3-6 weeks tofund-raisedepending on sizeof loanKiva Zipteam review5
“Wow, Cool! How do we get started?”1. Recommend all new trustees start with only 1-3 “pilot” borrowers2. For each, 1st loan up to $50003. Only expand to more borrowers after 10 months’ total repaymenthistory (e.g. 2 borrowers with 5 monthly repayments each)4. 2nd loan up to $10,0005. 3rd loan up to $20,000That’s it. Let me know if you have any questions?Sulin Lau, Kiva Zip NYCsulin.email@example.com, mobile: 4156906510website : zip.kiva.org
13Appendix: other useful information about Kiva Zip
What do the loans look like? 0% interest Business loans Small size – first loan can be up to$5k; subsequent loans up to $50k Up to 24 months term Grace periods available for someloans Repayments made in regularweekly or monthly installments Disbursals and repaymentsmade electronically via Paypal Posted and ‘crowd-funded’ online
Example organizational trustee profilePhoto (or logo)of theorganizationList ofborrowersendorsedLink towebsite,Facebook page,Twitter feed,etc.Information about thetrustee, how they will do duediligence on borrowers, etc.Informationon number ofborrowersendorsed, andrepaymentdata
Example trustee endorsementThe trusteeendorsement shows upas a tab on theborrower’s loan pageWe ask trustees foursimple questionsabout why they areendorsing theborrower for a loan
Borrower success stories in the press:Success storiesCarol CookeHot Dogma DepotSeth GoldBamboo ApparelTulio CardozoCollaborative BenefitDB ShroederPuzzle Piece TheatreWEDC in New YorkTrustee partnerships in the press:Michigan Corps in Detroit American Dreams