Visa and microlending website Kiva.org on Wednesday debuted a new program that will extend microfinance to small businesses in underserved communities across the country, including Columbus.
Kiva City, which was announced by President Bill Clinton during the opening session of the Clinton Global Initiative in Chicago, aims to spur job growth and economic recovery by connecting Kiva’s global network of 592,000 individual lenders with small businesses owners.
The program will engage local civic leaders, community organization and financial institutions to identify small businesses in need, and help Kiva administer and fund microloans. Visa has committed $1 million to the effort.
This week, Kiva launched its first Kiva City: Detroit. Over the next two years, the program will be rolled out in Cleveland, Miami, Pittsburgh, and Columbus, and aims to generate a total of $3.5 million in loans. The average Kiva loan in the United States is $7,000 and can be used for purchasing equipment, paying rent, hiring and retaining employees, and offering promotions.
“Since launching in the U.S. two years ago, we have worked with our partners to replicate our successful global model, empowering each and every American to help our economy by adding as little as $25 to a small business owner’s loan,” says Premal Shah, co-founder of Kiva. “But as our study shows, the needs in the U.S. are widespread and many regions simply don’t have microfinance institutions operating at scale.”
As Shah mentioned, Visa and Kiva commissioned a study that focuses on small business trends in 50 of the largest U.S. metropolitan areas, which were ranked using U.S. Census Bureau data on changes in the number of business starts between 2006 and 2008 (the most recent data available).
Of the 50 largest cities, 20 lost at least 1 percent of companies with one to nine employees, representing about 15,000 businesses. Columbus ranks fourth among those cities, having lost 596 businesses during that two-year period.
To learn more about Kiva City, visit Kiva.org/kivacity.