Most people think of Kiva as the microlending platform for entrepreneurs in developing countries. However, a new program is bringing the platform stateside with Kiva Zip. Reese Neader has been tapped as Columbus’s first Kiva Fellow and will spend the next 12 months building awareness around the platform in the city.
Kiva strives to improve access to capital for entrepreneurs through crowdfunded, zero interest, zero fee microloans of up $10,000. Entrepreneurs receiving loans commit to a 24-month repayment period, and thus far the platform boasts an impressive nearly 99 percent repayment rate.
“The really important thing to talk about with Kiva is it works according to a social underwriting model,” Neader notes. To use Kiva as a platform, a business has to be endorsed by a trustee organization. Trustee organizations can be a for- or non-profit entity that publicly vouches for the business wanting to raise funds.
Once endorsed, businesses go through a 15-day private fundraising period where the borrower and the trustee organization solicit from their personal networks. Just how much a business needs to raise at this stage depends on the size of the loan. If a loan makes it to the Kiva Zip platform, borrowers can then raise money from lenders across the world.
In the age of crowdfunding, Neader emphasizes the difference between Kiva and platforms like Kickstarter or Indiegogo.
“You’re talking about loans,” he says. The process is much simpler for an entrepreneur as well. There’s no structuring giveaways, shooting videos or paying site fees. The Kiva Zip platform builds a questionnaire that leaves a borrower with a succinct campaign and 100 percent of the funds go directly to the loan. The vast majority of lenders also choose to recycle their money through the platform.
As part of his year-long position, Neader will work towards outfitting Columbus with the three criteria it needs to be a Kiva City. First is an endorsement from city hall, which he is working on acquiring. He also needs to on-board 10 trustee organizations.
Neader’s own entrepreneurial venture, Forge Columbus, serves as the first Kiva trustee in the city. Milo Grogan-based Cultivate CDC is also on the trustee list.
The final requirement for the designation is fundraising for both loan matching programs and development of a Kiva Columbus website.
When he’s not working on these initiatives, “It’s my job to walk entrepreneurs through the application process, be able to help them structure their ask appropriately, and support them with marketing assistance for their campaign,” Neader says. “To date, we have successfully funded four loans in Columbus, 100 percent going to minority-owned businesses.”
While it’s a good start, Neader has ambitious goals for the platform.
“Our goal is to get to hosting one campaign every week in this city,” he says. But of course, the sky is the limit.
While Kiva was originally structured for agricultural loans, and it’s still a major industry on the platform, “Everyone can use this,” Neader says.
For more information, contact Reese Neader at reese.ne[email protected].