Kiva Zip: a 10 slide intro


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In 2012, one of the world's largest online crowdfunding platforms launched Kiva Zip USA, a 0% interest PayPal-enabled loan product designed specifically for US small business entrepreneurs who would otherwise not qualify for traditional loans.

(As of Feb 2013) Kiva Zip has successfully helped crowdfund starter loans for 143 financially-excluded small businesses, and helped these businesses share their ideas and business ventures the crowdfunding community at large.

And we know, with your help, we can do even more.

- Learn more about helping small businesses, one $25 loan at a time:
- Support a small business in your own town:

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Kiva Zip: a 10 slide intro

  1. 1. 0% interest loan product fundedentirely via online crowdfunding 1
  2. 2. Designed specifically forfinancially excluded, sociallyimpactful entrepreneurs whoneed small starter loans up to $5,000 2
  3. 3. Building off the success (and scale) of around the world... 967,972 entrepreneurs funded since 2005 67 countries US$150 mil p.a. in crowd-funded loans US$1mil every 2.5 days! 3
  4. 4. ....built specifically around the unique needs of US micro-entrepreneurs 4
  5. 5. Kiva Zip: reinventing small biz borrowing• Expand access to 0% interest loans• ...To small businesses not otherwise qualified for conventional loans• ...All loans are crowdfunded online from our lending community• We also lower cost of lending further by using digital platforms (PayPal in the US)• Which also directly connects borrowers with a ready community of lenders who they can turn into fans and advocates
  6. 6. How ZIP works: example of Victor, SF Victor engages his lenders with the “conversations” feature Created 5 new part-time jobs Repaid 10 months on time Now applyingfor a second ZIP Lenders can also loan of check out his Yelp profile $10,000
  7. 7. How ZIP works: other borrowers “Having 45 people invest in Pac Brew Labs is like hiring 45 brand ambassadors”, Bryan, Pacific Brew Laboratory “Kiva Zip is an invaluable resource for entrepreneurs” Emiliana, Jarred Brine“I didn’t think character based lending existed anymore. It’s an amazing use of technology to bring us back to the basics.” Cristian, J Style at Home Inc
  8. 8. Kiva Zip “Trustees” and why they matter In the Kiva Zip model of character-based lending, “Trustees” - organizations or individuals that work closely with small entrepreneurs - 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.
  9. 9. What’s in it for trustees? If you already work with financially excluded clients Empower (unproven startups, or low credit score entrepreneurs)... Clients Kiva Zip will give the clients you endorse access to 0% business loans they would otherwise not qualify for If you already do great work in your community that largely Promote goes unrecognized or unpromoted... what you being a Kiva Zip trustee automatically allows you to promote do your work (in your own words) to >1 mil socially-conscious Kiva lenders everywhere. Also participate in Kiva PR initiatives. If your organization’s potential funders care about tangible Increase impact (businesses helped, $$ generated, jobs created)... Impact, Kiva Zip helps you help more small businesses take off, faster. Help Endorsing a deserving borrower online takes 15min. Reducing Fundraise time and cost for raising capital means you can impact more.
  10. 10. Borrowers: who should you endorse?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) Character Assessment Minimum Criteria Kiva Zip leaves it up to trustees to Must be met unless there are exceptional make a judgment call in these areas circumstances • The borrowers debt-to-income ratio must be• Do you deeply trust that they are the kind less than 35% of person who will commit to repaying their loan? • The borrower cannot have over $3,000 in past- due debt• Do they have a viable business or business plan? • The loan must be less than 75% of the borrowers income• Do you know what they will use the loan • The borrower cannot currently be in foreclosure for and how it will impact their business? or bankruptcy• Will this loan have a positive social • The borrowers annual income must be less impact? than $100,000 • The borrower must be over 16
  11. 11. Endorsing a borrower is easy Once a trustee has identified a borrower they want to endorse, there are five principal steps before the borrower can begin fundraising for an interest- free, crowd-funded loan on the Kiva Zip website:1 2 3 4 5 Trustee Trustee Borrower Trustee Kiva Zip application endorsement application review team review Trustee fills out a For each borrower The borrower’s turn! Once submitted, Kiva Zip team’s ‘trustee application’ they endorse, Borrower completes every trustee final review before form, telling Kiva Zip trustee writes a a ‘loan application’ gets to review posting it to the (and lenders) why simple online the loan website. they want to be a endorsement application trustee •Their background •Loan begins • Describes the •Their business idea •Can choose to online fund-raising •One-time borrower’s •“Why loan to me?” approve character to •3-6 weeks to •Online lenders •2-3 hours •Or suggest fund-raise changes, depending on size •20-30 mins •10 mins •Online form improvements to of loan borrower
  12. 12. “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 repayment history (e.g. 2 borrowers with 5 monthly repayments each)4. 2nd loan up to $10,0005. 3rd loan up to $20,000 That’s it. Let me know if you have any questions? Sulin Lau, Kiva Zip NYC, mobile: 4156906510 website :
  13. 13. Appendix: other useful information about Kiva Zip 13
  14. 14. 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 some loans Repayments made in regular weekly or monthly installments Disbursals and repayments made electronically via Paypal Posted and ‘crowd-funded’ online
  15. 15. Example organizational trustee profile Photo (or logo) of the Link to organization website, Facebook page, Twitter feed, etc. Information on number of borrowers endorsed, and repayment data List of borrowers endorsed Information about the trustee, how they will do due diligence on borrowers, etc.
  16. 16. Example trustee endorsement The trustee endorsement shows up as a tab on the borrower’s loan page We ask trustees four simple questions about why they are endorsing the borrower for a loan
  17. 17. Success storiesBorrower success stories in the press: Seth Gold Carol Cooke DB Shroeder Tulio CardozoBamboo Apparel Hot Dogma Depot Puzzle Piece Theatre Collaborative BenefitTrustee partnerships in the press: WEDC in New York Michigan Corps in Detroit American Dreams