8“Beginning”“Beginning”• new, unproven businesses• little or no track record• Zip designed as the "first rung of thecredit ladder"• suits those with short credit histories -does not assess worthiness using FICOscores but competence and characterinstead
10“Too Small”“Too Small”• Some loans too small to be serviced profitably• Sulin to dig stats of what is too small a loan formost lenders• Small lenders is Kivas specialty
Graph: average US price for a dairy cow $2200average US Microloan rangeAve Kiva (international) loan = $431Kiva Zip USA loan range = $1000-$10000
12specifically around the unique needsof US micro-entrepreneurs
13“Strong Social Ties”“Strong Social Ties”• Kiva Zip qualifies borrowers not by Credit Score• ...but by the willingness of establishedcommunity-based organizations to vouch(“endorse”) borrowers• Community Ties and Human Trust are whatcount in the Kiva Zip model• Farming by its very nature is invested in the land,and rooted in the community
• Case Study: XXXX• 5 quick examples of different support organizations around the country who haveendorsed beginning farmers because they believe in their farms, and in the farmer
6 reasons why Kiva Zip can help you lowerbarriers for Beginning BorrowersExpand access to 0% interest loans...To small and new farmers not otherwise qualified forconventional loans...All loans are crowdfunded online from our lendingcommunityWe also lower cost of lending further by using digitalplatforms (PayPal), no overheads = no fees or interest,only pay back the principalWhich also directly connects farmers with an online“Social Network” of emotionally invested lendersThese they can then turn into fans, customers andbrand advocates!
16So yes, it’s a great vehicle.But the real fuel is you.
17So yes, it’s a great vehicle.But the real fuel is you.In the Kiva Zip model of character-based lending, “Trustees” - organizations orindividuals that work closely with small entrepreneurs - are absolutely crucial.Trustees are those entrusted to:-Identify eligible and deserving borrowers for 0% interest loanPublicly endorse them on the Kiva Zip websiteSupport 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.
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: which farmers should you endorse?Character AssessmentCharacter AssessmentKiva Zip leaves it up to trustees to makeKiva Zip leaves it up to trustees to makea judgment call in these areasa judgment call in these areasFinancial CriteriaFinancial CriteriaMust be met unless there are exceptionalMust be met unless there are exceptionalcircumstancescircumstances•Do you deeply trust that they are the kind ofperson who will commit to repaying theirloan?•Do they have a viable business or businessplan?•Do you know what they will use the loan forand how it will impact their business?•Will this loan have a positive social impact?•The borrowers debt-to-income ratio must be lessthan 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 less than$100,000•The borrower must be over 16
19Kiva Zip needs more trusteeswilling to endorse the farmers they believe inwilling to endorse the farmers they believe in• 3 Things you can do right now to start becoming a trustee1. Think of 1 deserving borrower you know right now whocould use a loan <$5000 - your pilot borrower2. Think about why you TRUST in this farmer’scompetence, and their character, and whether he/sheis someone you’d vouch for - Y/N?3. If Yes, send an email to Kiva’s New York rep:Sulin.Lau@fellows.kiva.org19
21By working together,we hope to have 100of these stories thistime next year.
What’s in it for trustees?EmpowerClientsIf you already work with financially excluded clients (unprovenstartups, or low credit score entrepreneurs)...Kiva Zip will give the clients you endorse access to 0% businessloans they would otherwise not qualify forPromotewhat you doIf you already do great work in your community that largely goesunrecognized 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.