Kiva.org's plans to bring micro-loans to the U.S. - Mar. 23, 2009 - The Diigo Meta page

• 02 May 09
  

  lelapin _
  • Kiva takes no cut of the loans allocated for entrepreneurs. Instead, it solicits an optional 10% fee of every loan to help pay salaries and keep the lights on. The organization uses microfinance institution partners to vet entrepreneurs before allowing them to solicit funding. By asking a series of questions to assess roots in the community and the legitimacy of a business, Kiva is able to establish a risk profile for each entrepreneur. Before offering money to, say, the proprietor of a Dominican fruit stand, any lender can read the entrepreneur¹s profile, history of defaults, and a bit about the business.
  • Default rates are low --­ 2% total ­-- and users can lend a minimum of $25 to any single person. Spreading loans across a series of entrepreneurs further lessens a lender's exposure to risk, and gives more people an opportunity to put money into the system. Lately, however, lenders are putting up more money than Kiva can distribute. Several times in the last month, the site has displayed a message saying there were no entrepreneurs to lend money to.
  • 2 more annotations...
  • • Now, in addition to trying to keep pace in the developing world, Shah and CEO Matt Flannery plan to bring Kiva to the U.S. in the next few months.
    • They're signing on microfinance partners in the Bay Area and in the Northeast, and are targeting the 30 million or so Americans who don't have bank accounts and the 18 million or so "micro-enterprises" that often rely on high-interest loans or payday advances to buy supplies -- in Shah's words, "folks who don't have a FICA score or a credit history, but run a small enterprise. At least for the last year, we've been thinking, wealth is everywhere, poverty is everywhere. When I was out in West Africa, and I said 'we plan to let you loan to someone in U.S.,' they loved that idea, that money would flow both ways."
• 23 Mar 09
  

  Mike Cane

  SAN FRANCISCO (Fortune) -- When the economic downturn took hold last autumn, the management team at non-profit Kiva.org made a calculated bet to curb investment, anticipating that donors would slow the volume of small loans they make to entrepreneurs in the developing world. That slowdown never came. Now, the non-profit site is racing to keep up with user demand even while planning to bring its unique form of charity to the U.S.

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