The student organization Haverford Microfinance & Consulting (Haverford MFC) is exploring a new venture, working with Kiva Zip, an on-line crowd funding platform, as a Trustee. Trustees identify strong potential entrepreneurs with a need for capital, conduct due diligence on their business, help with their on-line profile and maintain a relationship with the entrepreneur to help them with their business and communications with their lenders.
Wednesday, 28 August 2014, Ivy Muir (’15) and I attended a Trustee workshop led by Kiva Zip representative Alyssa Thomas who is in resident in Philadelphia for its launch as a Kiva City. The workshop was held in the Municipal Building next to City Hall and the support of the Mayor’s office and Department of Commerce is evident.
The workshop was very informative with Alyssa Thomas presenting material on the program. Other highlights included an excellent presentation by current trustee Roger Cervantes with Rising Tide Capital (Jersey City) that included stories about some of his clients and an inspiring presentation by an entrepreneur, Carl Lewis of The 48th Street Grill (opening soon).
I won’t go into too much detail, but first loans are limited to $5,000, though Kiva Zip may limit it to $500 for borrowers that have high debt/income ratios. Loans are zero interest which means that they are not subject to extensive regulations that govern investments that are expected to earn a positive return. To date in the U.S. most borrowers have businesses that are existing, but less than 1 year old. They use Kiva Zip to supplement other sources of financing.
More details and comments on the program will follow, but I wanted to point out one interesting innovation. An important criteria for the loan is that the borrower/entrepreneur must elicit funds from at least seven lenders in their own network during a two week private funding period. In this way, the borrower demonstrates his/her own social capital, the trust and faith of friends, families and associates, before going live and asking for funds from the general public. It was pointed out by another experienced Trustee that the use of Kiva Zip is also a very convenient way for the entrepreneur’s social network to support the business without the entrepreneur having to track a bunch of IOU’s, figure out payments, communicate separately with each individual, etc.
An observation – I was encouraged that the room was not dominated by old white guys, either in the presentations or among the participants.
Speaking of participants, Josh Glickenhaus of EnterpreneurWorks (EW). EW has been an important collaborator with Mi3 and Haverford MFC over the last four years. Josh is a former Vista/Americorp fellow now working as a loan administrator. EW is a trustee, but it has not yet endorsed anyone.
Also at the meeting was an alumna who took my first Microfinance course, Kaelyn Anderson (HC ’13). She has been working for the Kensington Commununity Development Corporation as a Vista/AmeriCorp fellow and was just hired on full time. Its great to see Haverford Alumni working in the region and working toward improved access to finance for populations that are too often excluded.