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What Kiva Zip learned about serving small businesses after a year in Philadelphia

December 2, 2015 Category: FeaturedResults

A year ago, Kiva Zip Philadelphia launched with plans to fund 100 organizations. It missed its mark. Manager Alyssa Thomas will tell you the program is better off because of it.

Kiva Zip works like this: Local entrepreneurs seeking small loans match up with community organizations that can vouch for the entrepreneurs’ character and the business’ benefit to the community. Kiva Zip then sets up a crowdfunding profile for the entrepreneurs, and people all over the world can lend them money at zero-percent interest. All loans are matched by loan matching providers, such as local banks and foundations. Entrepreneurs are then expected to pay back the loan to each individual borrower in increments.

This Friday, Kiva Zip will celebrate a year in Philadelphia with an anniversary party and pop-up holiday shop. Here are some numbers about Kiva Zip Philadelphia’s first year:

  • 70 loans were funded for a total of $313,125
  • 93.1 percent was the repayment rate of those loans
  • 59 percent of lendees were ethnic minorities
  • 47.3 percent of lendees were women
  • $41,586 was the median household income of lendees
  • 74 percent of businesses funded were less than three years old
  • 31 percent of businesses funded were food-related, either as producers or restaurants; 19 percent were related to arts, crafts, jewelry or clothing
  • 45 organizations have served as community partners

 

We caught up with Thomas for a #PhillyChanger Chat in May. She told us then that the program aimed to support 100 entrepreneurs in its first year.

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That didn’t happen, but to be fair, the number Kiva Zip has supported is “way more than what any other lender in the city is doing, and I’m the only employee” of Kiva Zip Philadelphia, Thomas said.

Thomas admits that the initial goal was “aggressive.” Some of what accounts for the discrepancy in numbers, though, is that Kiva Zip Philadelphia shifted focus in the second half of the year. In the first half, the program had focused on reaching arts, crafts and food entrepreneurs. In the second, it made more of an effort to reach low- to moderate-income and minority neighborhoods. It’s become more important to the program to put money in the hands of people less likely to get it otherwise. 

As a result, the program recently served its first Cambodian and Syrian borrowers. Those people can be a lot harder to reach than, say, Fishtown-based borrowers that have the support of a wide-reaching community partner like New Kensington CDC.

In order to reach those entrepreneurs, Kiva Zip Philadelphia ramped up partnerships with organizations in underserved neighborhoods, like Esperanza in North Philly and Southwest CDC. Kiva Zip also hosted free workshops in those communities, helping entrepreneurs fill out their loan applications.

“We definitely want to make sure we’re impactful,” Thomas said. “We want to reach them even if it takes a little bit longer than we would like.”

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