Friday Roundup 7/1/11: Kiva Launches First ’Kiva City’ in Detroit
Kiva has been lending to U.S. borrowers since 2009, through microfinance institution (MFI) partners Opportunity Fund and ACCION USA. Then in August, the organization received $1 million in seed funding from Visa. However, the microlending platform soon found out that microfinance does not reach the vast majority of the poor in the US.
According to Kiva’s Portfolio Manager for North America, Maika Hemphill, “There are entire regions of the US that are untouched by microfinance, where people could really benefit from it.” The reason? Business is expensive in the U.S. – it is difficult for MFIs to pay the loan officer salaries necessary for rapid scale-up.
In comes the new Kiva City initiative, which combines the power of civic leaders, community organizations, and financial institutions. Rolling out first in Detroit, Kiva has partnered with Michigan Corps, ACCION USA, and the Knight Foundation to bring financial inclusion to a city that is wholly determined – from the government level to the individual level – on working collaboratively to bring good ideas to fruition, since one entrepreneur’s success nourishes the entire community. (See here and here for past posts on Detroit.) In Detroit, Michigan Corps will find and screen micro-entrepreneurs and feed them to ACCION USA, who will disburse the loans. Michigan Corps also will provide the borrowers with business support and financial literacy, simultaneously lightening ACCION’s administrative burden and reducing its risk.
As a former Kiva Fellow, I was lucky to attend the launch in Detroit’s Eastern Market, a historical hub for micro-entrepreneurship, where Kiva and its partners Michigan Corps and ACCION USA introduced the initiative and the first Detroit borrowers – fully funded within 3 hours of the launch – touted their wares. At the same time, a five-hour drive away in Chicago at the Clinton Global Initiative Conference, former President Bill Clinton announced that Kiva plans to disburse $3.5 million in two years to 500 businesses across US cities, affecting 3,000 people.
In a similar vein, the Economist recently counted 44 million Americans in poverty, a huge, underserved BoP market that could benefit from similar innovations as those in the developing world, such as pre-paid phones and low-cost appliances. It will interesting to see how BoP initiatives expand in the U.S., perhaps laying the groundwork for a more sustainable global capitalism in the long run.
On Wednesday (July 6) Carnegie Corporation of New York, The Opportunity Equation, and Ashoka’s Changemakers will jointly host a multilingual Twitter chat. The organizations hope to bring together entrepreneurs, innovators, and enthusiasts from around the world to discuss how to best engage students, particularly our highest-need students, in rich STEM learning (Science, Technology, Engineering, and Mathematics). Join the chat by searching for the hashtag #SocEntChat on Twitter between 2:00 p.m. and 4:00 p.m. (ET), to share innovative ideas and solutions that address the partnerships, programs, and people that will make the STEM education movement possible.
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