Kiva, the non-profit platform that crowdfunds 0% microloans for small businesses, will soon fund its 50th local loan. Supporters celebrated that fact in a gathering at theCommunity Foundation of Louisville on Tuesday, Oct. 27.
Brought to Louisville and the surrounding area in 2014, Kiva has exposed local entrepreneurs to a network of more than 62,000 lenders who have provided the capital needed for storefronts, supplies, manpower, and more for 47 loans locally, totaling $257,600.
Seven additional loans totaling more than $38,000 are currently fundraising on Kiva, including The New Blak, a sustainable clothing company in Louisville endorsed by Seed Capital KY, Queens Crown Lunchbox and Catering, a cafe in Louisville endorsed by Navigate Enterprise Center, and Sumthin Sweet, a custom cake and dessert company.
To date, 45% of borrowers are women and 29% are people of color. More than 60% of loans have had to do with food and beverage production, and 20% have gone to farmers throughout Kentucky and Southern Indiana. Each loan has dozens and in some cases hundreds, of lenders, many of them from other states and countries. Those lenders also become customers and brand ambassadors. When they’re paid back, 90% of lenders choose to relend rather than withdrawing their money.
From Louisville’s first loan, to farmer Luke Groce of Groce Family Farm, to its most recent loan to Malissa Love, a Metro United Way employee opening Bee’s Beauty and Barber Supply, the program has enabled entrepreneurs to access capital they otherwise couldn’t. The majority of small business loan applications are rejected by banks, and people of color are disproportionately denied. Other notable borrowers include Idlewild Butterfly Farm, Louisville Cream, Honest Home, Rootbound Farm, US Chia, The Weekly Juicery, Birdgang Brand Clothing, The Table Cafe, and Grind Burger Kitchen.
Kiva doesn’t care about collateral, credit score, or how much cash someone has on hand; instead it emphasizes character, measured by an entrepreneur’s ability to rally 15 initial lenders from his or her personal network. The program is supported by a full-time fellow. Josie Raymond succeeded David Taliaferro as Louisville’s second Kiva Fellow this past summer and recently Katherine Hunt was added this fall as our third Kiva Fellow with an emphasis on agriculture.
Last month, three woman-owned businesses opened their doors thanks to Kiva loans. Ricka and Chenica are hairstylists who quit their salon jobs and opened C&R Beauty Bar; Katie is a self-trained cook who opened her meal prep kitchen, Katered to You, in New Albany; and Madeleine is a personal chef opening Fond, a homemade grocery store.
As Ricka and Chenica explained, “Without a loan from Kiva, we would probably still be months away from our business. However, that loan has meant so much more to us than a dollar amount: empowerment that we can do anything we put our minds to, we’ve become role models for others in our community and in other parts of the world, and a renewed hope in humanity in that complete strangers want to see us succeed as much as we want to succeed.”
Kiva is a platform that crowdfunds 0% interest microloans for local low-income or socially-impactful entrepreneurs. It makes microloans of up to $5,000 (or $10,000 for farmers). In the last two years, more than $9 million has been lent to more than 11,000 small businesses across the country, all at 0% interest. Loans come from a community of generous people lending in increments of at least $25. Several organizations such as Stock Yards Bank, Metro United Way, Owsley Brown II Foundation, JBGF, Access Ventures, and the Community Foundation of Louisville have been instrumental in growing this program.
Matching loan funds have been provided locally by Stock Yards Bank, the Rotary Club of Louisville, which will match loans to immigrant and refugee entrepreneurs, and SEED (Sowing Excellence through Economic Development) which is based out of St. Stephen Church and is contributing to businesses and entrepreneurs based in Louisville’s West End. In addition, two key loan matching organizations in Southern Indiana include the Horseshoe Foundation of Floyd County and the Ogle Foundation.