Kiva Chooses Detroit as First City for Crowdfunded Microfinance Program

(Page 2 of 2)

the recent economic downturn. But Kiva’s president Premal Shah says domestic microlending still has a long way to go.

“We try to pick up where banks leave off,” Shah said. “It’s estimated that 20 million small businesses in the U.S. are unbanked or underbanked. We chose Detroit as our first Kiva City because it’s been particularly hard hit by the economy in the last 5 to 10 years. We’re trying to enable the entrepreneurial ecosystem. Even Kiva wouldn’t be around if we hadn’t gotten investment capital.”

Kiva uses the “crowdfunding” model, where people across the Internet click on Kiva’s website and scroll though loan opportunites. They pick one, donate $25 or more, and 100 percent of the loan is sent to one of Kiva’s partner lending organizations, such as Accion USA, which holds the loan. Citizen lenders eventually receive repayment through their Kiva account. They can then withdraw the money or use it to finance another microloan.

“The Internet community has certainly been willing to bank on projects in Detroit,” Shah said. “In fact, I was looking at the list of Detroit lenders the other day and saw Craig Newmark’s name on the list.” Yes, that Craig Newmark—better known as the founder of Craigslist.

Shah said he became involved with Kiva after working for PayPal. He was intrigued that complete strangers were connecting on the Internet to buy and sell wares to one another, usually quite successfully.

“I thought, if commerce can be done like this, why not lending?” Shah said. “Microlending is a business approach to poverty alleviation and opportunity creation.”

Poverty alleviation is exactly what Delphia Simmons has in mind with her Thrive Detroit newspaper project. After training her sales crew on her expected vendor code of conduct, she plans to sell each paper for $1, with 75 cents going to the individual vendor. At first, the plan is to concentrate on the downtown, Midtown and New Center areas of Detroit. Simmons wants to give all homeless people the opportunity to participate, which is why she’s wiling to give anyone who asks 10 free papers—with the understanding that she’ll never see some of the recipients again.

“But some,” Simmons said, “will really take hold of this idea of micro enterprise.”

Simmons had planned to launch Thrive Detroit this month, but there has been a slight delay due to the challenge of finding volunteers to provide content for the newspaper. (Email her at [email protected] if you have a story idea you want to write about.) However, she’s not too hung up on the launch date—she has a bigger-picture goal of making Thrive Detroit the first of several microenterprises that will provide opportunities for the homeless population in Detroit.

“I had such a positive experience working with Kiva and Accion,” Simmons said. “The loan application wasn’t intimidating, the business template was easy to fill out … I plan to send some of our more successful vendors to Kiva for help with their own side businesses.”

Single PageCurrently on Page: 1 2 previous page

Trending on Xconomy

By posting a comment, you agree to our terms and conditions.

Comments are closed.