By Tom Walsh
Kiva Detroit, launched 14 months ago as the first major community-based online micro-lending initiative in a U.S. city for group funding of small start-up businesses, is spreading its wings.
Today at a luncheon event at the Carr Center in Detroit, plans will be outlined for Kiva Zip, an extension of the Kiva platform that will enable any citizen to nominate a local entrepreneur for support and contribute directly to a crowd-funded, interest-free loan through PayPal.
During its first year, Kiva Detroit has funded a dozen companies out of about 84 nominated for consideration, dispensing about $50,000 in loans, says Elizabeth Garlow, director of strategic initiatives for Michigan Corps, a network of current and former Michigan residents seeking to foster entrepreneurship and education projects in the state.
Underwriting approval and risk management for the first Kiva loans in Detroit were handled by ACCION USA, which partnered with Michigan Corps and Kiva.org, the global nonprofit group founded in 2005 that has distributed more than $300 million in loans worldwide, mostly in developing countries.
What's different about the Kiva Zip extension of the program in Detroit is that it gives any entrepreneur a chance to access up to $5,000 in zero-interest funding, if they can get people in the community to ante up sums as small as $25 to back the business.
Most people contribute for a "social return," Garlow says, as opposed to hopes of a monetary profit, and many will recycle their loans, once repaid, back into the Kiva program. "But there's also the hope that the lenders will go above and beyond that, becoming mentors or assisting in other ways," she says.
Kiva Detroit is also supported by the John S. and James L. Knight Foundation, which is active in cities where the Knight brothers owned newspapers, such as the Detroit Free Press. The foundation is providing $250,000 to match small loans made by individuals.
Delphia Simmons was one of the first Detroit entrepreneurs funded through Kiva last year, to publish the Thrive Detroit street newspaper being sold by homeless people in the city.
Simmons is expected to nominate the first business for a Kiva Zip loan today, a community theater that targets youth in Detroit for training as actors.
Big-time successes like Dan Gilbert of Quicken Loans and Peter Karmanos of Compuware get lots of attention, and rightly so, for their efforts to kick-start new business creation in Detroit.
But it will take hundreds more to create a major entrepreneurial resurgence in a city that badly needs it.
To nominate an entrepreneur for Kiva Detroit, visit www.michigancorps.org/kivabiz or e-mail firstname.lastname@example.org
. To register for Kiva Zip and lend directly to an entrepreneur, visit zip.kiva.org
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