Kiva to Help Out U.S. Entrepreneurs
Kiva to feed cash-starved US small businesses (Click on imgage to read article)
Kiva is an online microfinance service whereby loans are made available from individuals wanting to provide the necessary funds to aspiring enterpreneurs in the developing world. However, what makes this article interesting about Kiva is that for the first time, they have decided to provide loans to small businesses in the US.
As was mentioned in a previous post, one of the major problems small businesses face in securing credit is the reluctance of banks to provide credit to those borrowers with little to no assets to secure. According to Premal Shah, Kiva’s President, “Kiva didn’t intend to raise money for aspiring businesses in the world’s largest economy. But the reluctance of U.S. banks to lend during the past nine months caused the San Francisco-based nonprofit to reconsider”.
This is truly a novel approach by Kiva and one that is sure to stir some controversy since it is widely accepted by the international community that it was the U.S. financial meltdown that has caused the global recession. Even Kiva staffers have their doubts about this approach. According to Shah, some of Kiva’s staffers remain convinced the loans are needed more in poorer countries. Despite their objections, Kiva is not giving U.S. borrowers any special treatment. According to Shah, “Kiva will let needy U.S. small businesses vie for funding alongside a melting pot of cash-starved entrepreneurs that includes everything from a Cambodian fisherwoman to a Moldovan butcher to a Bolivian taxi driver. At any rate, this is a much needed novel solution that will hopefully make a dent into the frozen credti markets.
Kiva is a fantastic organisation and the ROI is fantastic! Not only can you help out someone but you can also make money! Seems like a very novel solution that can keep all parties involved happy.