Kiva Zip Borrower Overview


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  • Kiva Zip Borrower Overview

    1. 1. 1 1 US Trustee Introduction Spring, 2013 January, 2014 U.S. Borrower Introduction
    2. 2. 2 Kiva is a non-profit, based in San Francisco, that enables individual lenders to crowd-fund person-to-person loans to individual borrowers around the world. Kiva made its first loan in Uganda in 2005, and has since made over one million loans in 75 countries. Welcome to Kiva
    3. 3. 3 1,000,000+ Lenders 1,000,000+ Entrepreneurs $500,000,000+ Loans 99% Repayment Rate Kiva’s impact to-date
    4. 4. 4 In 2011, Kiva launched Kiva Zip which aims to expand financial access to financially excluded and socially impactful entrepreneurs in the United States. We have three principle objectives: Improving Access to Capital We support entrepreneurs who would not qualify for conventional loans We leverage new technologies to lower financial costs for borrowers We facilitate local and global connections that have a positive social impact Kiva Zip
    5. 5. 5 Small businesses create jobs in the United States 2 out of 3 small businesses hired just one additional employee 1 in 3 Full employment achieved ifEvery day small business loan applications are rejected by banks 8,000 Access to capital constraint to growth reported by U.S. small businesses Top 3 What’s the problem? Job creators are constrained
    6. 6. 6 Kiva Zip aims to change the way lending is approached in the United States. We believe in a different lens by which entrepreneurs are deemed “credit worthy”. We believe that an entrepreneur’s character and network of support and relationships are just as viable as traditional financial metrics. A new paradigm – Social underwriting Traditional Banks Kiva Zip Traditional banks are rejecting borrowers because of their credit score, years in business, cash flows, or collateral Kiva Zip doesn’t evaluate traditional financial metrics. We evaluate borrowers based on their character, reputation, trust networks, and relationships
    7. 7. 7  0% interest  Business loans  Small size – first loans up to $5k; subsequent loans up to $25k  Up to 24 months term  Grace periods available for some loans  Regular weekly or monthly repayment installments  Payments administered electronically via Paypal  Posted & ‘crowdfunded’ online What Kiva Zip loans look like
    8. 8. 8 Pay for legal fees Hire staff and help Purchase vehicles Upgrade their websites Improve their technology Market and advertise Purchase inventory Invest in equipment Expand product lines Our borrowers are using Kiva Zip to…
    9. 9. 9 Kiva has a network of over 1 million lenders. When a borrower fundraises, they have exposure to thousands of potential customers, brand ambassadors, and business advisors. Watching hundreds of lenders around the world read your story, look up your business, and invest is very encouraging and builds confidence. We believe this is essential to business success. The power of crowdfunding
    10. 10. 10 “Jerry, let us know where we can buy some of your Tuna jerky!” - Daniel “Farming is no easy task and what you two are doing with your team is inspiring to all of us who are beneficiaries of your labor.” - Nick “G'day from Australia! You sound like you are on your path and doing good things. I hope your business is going really well! What is the web address to buy online please? Do you post to Oz?” - Monique “Thank you for believing in me and my dream. TopShelf now has 4 employees, without your help it would have been tough to reach this goal.” - Christina “Did you know that your support helps me to hire 5 more people for this project? We are hiring! Please, spread the news! Thank you so much! Seriously!” - Anna “You have helped make an almost impossible dream come true.....My heart is warmed and very happy....Be blessed and prosperous always” - June …and borrowers can engage directly with their lenders Lenders can communicate directly with the borrowers they invest in… Communication on Kiva Zip
    11. 11. 11 We require that all borrowers on Kiva Zip:  Be over the age of 18  Have a PayPal account or have the ability to set one up  Are not currently be in bankruptcy or foreclosure. If you meet these criteria you qualify for a Kiva Zip loan. We believe in evaluating an entrepreneur’s network to evaluate “credit worthiness”. We make decisions less based on conventional financial metrics, and more based on a borrower’s demonstrated social network. There are two primary components to getting a Kiva Zip loan: 1) Having a Trustee You must be endorsed by a Trustee in order to qualify for the Kiva Zip program. A Trustee is meant to add credibility to you as you fundraise on our website, by vouching for your character and your business. 2) Inviting lenders We require most borrowers to invite lenders to the Kiva Zip platform before you’re able to take advantage of our crowd of lenders. We view this is an important measure of your trust network and hope that these lenders keep you accountable for repaying the loan. Qualifications of the Kiva Zip program
    12. 12. 12 You must be endorsed by a Trustee in order to qualify for a Kiva Zip loan. Trustees can be any individual or organization who can vouch for you on a personal and professional level. We’ve partnered with… To see the Trustees we have partnered with, please visit: Trustees have no financial or legal liability by endorsing you for the Kiva Zip program. Trustees can’t be family members, employees, or anyone that would financially benefit from endorsing you for the Kiva Zip program.  Small Business Development Centers  Economic development corporations  Stores you sell your goods in  Neighborhood associations  Startup incubators  SCORE advisors  Accountants  Professors  Suppliers  Mentors  Other small businesses  Shared workspaces  Religious groups  Student groups  Non profits 1) Having a trustee
    13. 13. 13 Most borrowers on Kiva Zip have to invite lenders from their own network to fund their loan, before they are able to take advantage of Kiva Zip’s crowd of lenders. We view this is an important measure of the borrower’s trust network, and hope these lenders keep the borrower accountable for repaying the loan.  For loans under $2,500 we require borrowers (or their trustees) to invite 7 lenders from within their network  For loans between $2,500 and $5,000 we require borrowers (or their trustees) to invite 15 lenders from within their network The Kiva Zip team has this structure for three primary reasons: 1) Borrowers who invite their own networks on Kiva Zip have a significantly higher repayment rate. 2) We’ve found that loans fundraise much quicker when the immediate network of the borrower is engaged in the fundraising period. This naturally expands to the broader network of that borrower and generates engagement at the local level. 3) The health of the Kiva Zip program is dependent on new lenders that join Kiva Zip and support our borrowers. Inviting lenders fuels the growth of the Kiva Zip program, allowing us to support more entrepreneurs. 2) Inviting lenders
    14. 14. 14 Please join us! To apply for the Kiva Zip program please visit us at: To speak with a Kiva Zip representative please email us at: