By Jill Power | The Duquesne Duke
A microfinance program that allows users from all over the world to donate to entrepreneurs launched in Pittsburgh on March 27.
Kiva City Pittsburgh, a crowd funding initiative, will bring money to small businesses in the area by allowing lenders to contribute directly to them.
While the borrower is entirely responsible for repayment, lenders do not collect interest on their loan. In addition, 99 percent of loans are repaid by the borrowers.
Loans can be as small as $5, but can be as large as the lender would like.
Those who wish to borrow via Kiva Zip must be endorsed by a trustee within the organization. Pittsburgh’s trustees include Pittsburgh Public Market, Operation Better Block, and Urban Innovation 21. An applicant’s rate of repayment impacts the reputation of the trustees.
Emily Keebler, who is currently working in Pittsburgh with Kiva Zip, said the process of establishing a presence in Pittsburgh began thanks to a study done by Kiva regarding the impact of the recession on metropolitan-area micro-businesses. A micro-business is a business with nine or less employees.
“Pittsburgh saw the third highest loss of jobs during the recession,” Keebler said.
Kiva Zip decided to launch in Pittsburgh, as well as seven other American cities, due to its position on the list of most jobs lost.
“The top cities from the report stood out as potential targets,” Keebler said.
In addition, Kiva City Pittsburgh hopes to serve industries that are just coming to the area, such as technology, according to Keebler.
Keebler said Kiva City Pittsburgh has plans to serve towns outside of Pittsburgh as well.
“We’re focusing right now on the city of Pittsburgh and municipalities around Pittsburgh, and hopefully once we establish more trustees here, we can branch out,” Keebler said.
Urban Innovation 21, an organization that is based in the Hill District, has become the trustee with the most endorsements since the site’s launch with seven.
Dora Walmsley and Deirdre Kane, who own 52nd Street Market, utilized Kiva to start their business. The two were struggling to turn their vacant corner store in Lawrenceville into the now operating market due to lack of funds.
“Deirdre and I were lacking in assets to apply for a conventional loan,” Walmsley said. “Additionally, we wanted to keep our debt obligations as low as possible since one of the main goals of the Market is maintaining affordability.”
After the Lawrenceville Corporation, another Kiva City Pittsburgh trustee, endorsed 52nd Street Market, Walmsley and Kane raised the funds they needed in five days through their Kiva Zip page. Fifty-three people from three different countries contributed to the pair’s project.
Walmsley said her business would not have been possible without Kiva Zip, and is grateful that she now has the opportunity to operate her business. She intends to continue aiding other small businesses in Pittsburgh.
“Kiva continues to support our work by empowering and funding other small businesses starting here in Pittsburgh, some of which 52nd Street Market is sourcing, or intends to source, product from,” Walmsley said.
