Kiva loans in Louisville turn 2, aims to grow
Since the micro-loan program Kiva Zip arrived in Louisville in 2014, the nonprofit has connected 75 local entrepreneurs with combined loans of $430,000 – which advocates say is a nice launch.
This month, the organization announced results of a survey on the impact of its efforts locally, along with some changes. Kiva allows entrepreneurs to use its tech platform to crowdfund 0 percent interest loans of up to $10,000, which gives early stage startups an alternative to securing hard-to-get bank loans.
In surveying 62 borrowers in Louisville and Southern Indiana, the group found that the average loan creates 1.8 new jobs that pay an average hourly wage of $11.31. A third of respondents saw their personal incomes increase by an average of 32 percent. Borrowers with Kiva moved on to get approved for more than $750,000 in additional capital from foundations, banks and investors.
Nearly half the loans have gone to women and 38 percent went to people of color. A review of lenders showed that money came from local, U.S. and international sources. The group also reported that 92 percent of borrowers are repaying their loans on time without putting collateral or other credit on the line.
Two "fellows" have served during the last two years. But the organization also will offer advisers who commit five to 10 hours a week to help work with startups. Some include people who've started businesses, including Malissa Love, a Metro United Way employee who leveraged a $5,000 loan to launch a beauty and barber supply business.
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There's also a merger in the works. The original organization was started in 2005 to conduct international micro-lending while Kiva Zip was an experiment in peer-to-peer lending in the U.S., said Josie Raymond, a fellow working in Louisville who completed a one-year contract last week.
Kiva Zip is being folded into the international group and will become Kiva U.S., which Raymond said should expose borrowers to more than 1 million lenders around the globe. Lending will be halted from May 28 to June 2 while the sites are combined. "It's our belief loans will be funded a lot faster," she said.
The new U.S. group is also forming lending teams and selling gift cards, which people can purchase and give as a gift to someone who can choose a business to support with the funds.
Overall, the changes should strengthen the program in Louisville and help it expand elsewhere, too, she said. "We think it's really good."
Reporter Grace Schneider can be reached at 502-582-4082 or gschneider@courier-journal.com.