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0% interest loan product funded
entirely via online crowdfunding
2
Designed specifically for financially excluded, socially impactful entrepreneurs who need small starter loans up to
$5,000
3
Building off the success (and scale) of Kiva.org around the world...
967,972 entrepreneurs funded since 2005
67 countries
US$150 mil p.a. in crowd-funded loans
US$1mil every 2.5 days!
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....built specifically around the unique needs of US micro-entrepreneurs
Kiva Zip: reinventing small biz borrowing
• Expand access to 0% interest loans • ...To small businesses not otherwise qualified for
conventional loans• ...All loans are crowdfunded online from our lending
community• We also lower cost of lending further by using digital
platforms (PayPal in the US)• Which also directly connects borrowers with a ready
community of lenders who they can turn into fans and advocates
How ZIP works: example of Victor, SF
Lenders can also check out his Yelp
profile
Repaid 10 months on time
Victor engages his lenders with the “conversations”
feature
Now applying for a second ZIP
loan of $10,000
Created 5 new part-time
jobs
How ZIP works: other borrowers
“Kiva Zip is an invaluable resource for entrepreneurs”Emiliana, Jarred Brine
“I didn’t think character based lending existed anymore. It’s an amazing use of technology to bring us back to the basics.”
Cristian, J Style at Home Inc
“Having 45 people invest in Pac Brew Labs is like hiring 45 brand ambassadors”,
Bryan, Pacific Brew Laboratory
Kiva Zip “Trustees” and why they matter
In the Kiva Zip model of character-based lending, “Trustees” - organizations or individuals that work closely with small entrepreneurs - are absolutely crucial.
Trustees are those entrusted to:-
Identify eligible and deserving borrowers for 0% interest loan
Publicly endorse them on the Kiva Zip website
Support the borrower in their business (advice, mentorship, incubator space, networking)
Trustees have no financial risk if a borrower they endorse does not repay, but their reputation is tied to borrowers’ performance.
What’s in it for trustees?
Empower Clients
If you already work with financially excluded clients (unproven startups, or low credit score entrepreneurs)...
Kiva Zip will give the clients you endorse access to 0% business loans they would otherwise not qualify for
Promote what you
do
If you already do great work in your community that largely goes unrecognized or unpromoted...
being a Kiva Zip trustee automatically allows you to promote your work (in your own words) to >1 mil socially-conscious Kiva lenders everywhere. Also participate in Kiva PR initiatives.
Increase Impact,
Help Fundraise
If your organization’s potential funders care about tangible impact (businesses helped, $$ generated, jobs created)...
Kiva Zip helps you help more small businesses take off, faster. Endorsing a deserving borrower online takes 15min. Reducing time and cost for raising capital means you can impact more.
In general, Trustees should endorse only those entrepreneurs who They trust to repay (character-based assessment) Possess the financial ability to repay (a new loan doesn’t increase indebtedness)
Borrowers: who should you endorse?
Character AssessmentKiva Zip leaves it up to trustees to
make a judgment call in these areas
Minimum CriteriaMust be met unless there are exceptional
circumstances
• Do you deeply trust that they are the kind of person who will commit to repaying their loan?
• Do they have a viable business or business plan?
• Do you know what they will use the loan for and how it will impact their business?
• Will this loan have a positive social impact?
• The borrower's debt-to-income ratio must be less than 35%
• The borrower cannot have over $3,000 in past-due debt
• The loan must be less than 75% of the borrower's income
• The borrower cannot currently be in foreclosure or bankruptcy
• The borrower's annual income must be less than $100,000
• The borrower must be over 16
Once a trustee has identified a borrower they want to endorse, there are five principal steps before the borrower can begin fundraising for an interest-free, crowd-funded loan on the Kiva Zip website:
Endorsing a borrower is easy
Trustee application
Trustee endorsement
Borrower application
Trustee review
1 2 3 4
Trustee fills out a ‘trustee application’ form, telling Kiva Zip (and lenders) why they want to be a trustee
•One-time
•Online
•20-30 mins
For each borrower they endorse, trustee writes a simple online endorsement
• Describes the borrower’s character to lenders
•10 mins
The borrower’s turn! Borrower completes a ‘loan application’
•Their background
•Their business idea
•“Why loan to me?”
•2-3 hours
•Online form
Once submitted, every trustee gets to review the loan application
•Can choose to approve
•Or suggest changes, improvements to borrower
Kiva Zip team’s final review before posting it to the website.
•Loan begins online fund-raising
•3-6 weeks to fund-raise depending on size of loan
Kiva Zip team review
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“Wow, Cool! How do we get started?”
1. Recommend all new trustees start with only 1-3 “pilot” borrowers
2. For each, 1st loan up to $5000
3. Only expand to more borrowers after 10 months’ total repayment history (e.g. 2 borrowers with 5 monthly repayments each)
4. 2nd loan up to $10,000
5. 3rd loan up to $20,000
That’s it. Let me know if you have any questions?Sulin Lau, Kiva Zip NYC
[email protected], mobile: 4156906510
website : zip.kiva.org
Or email us at [email protected]
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Appendix: other useful information about Kiva Zip
What do the loans look like?
0% interest
Business loans
Small size – first loan can be up to $5k; subsequent loans up to $50k
Up to 24 months term
Grace periods available for some loans
Repayments made in regular weekly or monthly installments
Disbursals and repayments made electronically via Paypal
Posted and ‘crowd-funded’ online
Example organizational trustee profilePhoto (or logo)
of the organization
List of borrowers endorsed
Link to website,
Facebook page, Twitter feed,
etc.
Information about the trustee, how they will do due diligence on borrowers, etc.
Information on number of
borrowers endorsed, and
repayment data
Example trustee endorsement
The trustee endorsement shows up
as a tab on the borrower’s loan page
We ask trustees four simple questions
about why they are endorsing the
borrower for a loan
Borrower success stories in the press:
Success stories
Carol CookeHot Dogma Depot
Seth GoldBamboo Apparel
Tulio CardozoCollaborative Benefit
DB ShroederPuzzle Piece Theatre
WEDC in New York
Trustee partnerships in the press:
Michigan Corps in Detroit American Dreams