President Clinton Lends Support To Kiva NYC Lanuch By Premal Shah

President Clinton Lends Support To Kiva NYC Lanuch By Premal Shah

Kiva NYC headed by Premal Shah opened its New York City account with the active support by President Bill Clinton on December 9th to help level the playing field for lower-income small business owners. The launch was celebrated at a special small business marketplace event in New York City featuring Kiva President and co-founder Premal Shah, Kiva borrowers, and former President Bill Clinton.

The nonprofit, commonly known by its domain name Kiva.org launched its new multi-year initiative that will bring 0% interest crowdfunded loans to hundreds of New York City small business owners who are socially impactful and financially excluded from mainstream lending options.

“The world needs two things more than anything else. It needs positive identity, the belief that our common humanity matters more than our differences. And it needs a system of inclusive universal empowerment so that we can live and prosper together, raise our children together, and have an entirely different future than what dominates most of the headlines today,” Clinton said. “That’s why Kiva in the United States is so important,” Clinton, founder of the Clinton Foundation, said at the event. “He kept a little notebook, and if he knew they were working hard and doing the best they could, he lent them food which they paid back,” Clinton was quoted as saying.

President Clinton Lends Support To Kiva NYC Lanuch By Premal ShahKiva NYC is part of Kiva’s effort to expand risk-tolerant and patient capital from city to city across the U.S. that was announced as a Clinton Global Initiative Commitment to Action in 2011. Since then, 12 other Kiva City programs have launched and Kiva loans are crowdfunding in 47 states, and in Guam and Puerto Rico. Recently marking its 10th anniversary, Kiva has provided crowdfunded loans to support more than 1.7 million entrepreneurs globally.

After the successful roll-out of the community-based platform Kiva Zip, in select cities, Kiva is broadening its reach through a new social underwriting loan model, reinserting the idea of “character into credit” and giving business owners who may not qualify for traditional loan access for needed capital.

“New York’s small businesses are the heart of this city. They bring color and vibrancy to the neighborhoods, create quality jobs, and enrich the cultural fabric of this city,” said Premal Shah. “They have the passion and the plan, but often they lack just a small amount of capital to start or expand,” he added.

Kiva’s new “social underwriting” model differs from conventional small business lenders: a borrower’s credit-worthiness is based on one’s ability to recruit friends and family to fund a small portion of their loan, demonstrating trust among the people who know them best.

Kiva does not require a minimum FICO score, collateral, or a minimum operations period for the business – which is unique compared to most non-profit U.S. microlenders. More than 90 percent of loan requests on Kiva are fully funded.

Kiva NYC represents a dramatic expansion of Kiva’s work in the New York City area. Kiva has already connected thousands of small dollar lenders to nearly 250 local entrepreneurs from every borough, including businesses owned by immigrants, neighborhood shops working to stay in their community, and businesses founded to support local food ecosystems and local emerging artists. “Through this initiative, we can all be a part of their (small business owners’ success,” Shah said.

In New York, there are over 200 small businesses that have received loans from 12,000 people in New York, and of those businesses 55 percent are run by women, 65 percent ethnic minorities, and half have been in operation for less than in one year.

Visitors to kiva.org/NYC can choose the entrepreneur they want to help crowdfund with a loan of $25 or more. Every dollar lent to a small business owner in NYC will be matched up to $1.1 million thanks to generous donors, including the MetLife Foundation, Deutsche Bank Americas Foundation and others. Individual loan requests average $5,000 and are offered at 0% interest and no fees. As the entrepreneur repays, lenders can relend to another person on Kiva.org/NYC or withdraw their money and put it back in their pocket.

Clinton said that Kiva is about empowerment and “positive identity politics,” reaching across sociopolitical divisions to give others a chance to pursue their ambitions. Clinton compared the character-based lending model started by Shah to what he saw while growing up in Arkansas, where, he said, his grandfather ran a small store and some locals did not have money upfront to feed their families—despite working long hours.

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