Kiva Providing a New Source for Small Biz Finance

David — Sat, 22 Jul 2006 02:32:00 +0000

Kiva.Org was started as an experiment by Stanford Business School students Matt Flannery and Jessica Flannery after they traveled to East Africa to review projects for the microlender Village Enterprise Fund. As reported by “Business Week’s” July 31, 2006 issue Kiva has made virtual neighbors out of strangers half a world apart, and facilitated 450 microloans, totaling $200,000, since the site’s inception in March, 2006. The loans have helped small business owners from Honduras to Uganda start-up small businesses, and so far there have been no loan defaults.

According to an “INC Magazine” study of successful entrepreneurs, 55% used personal savings to finance the start-up of their businesses, 6% used charge cards, 7% used bank loans and mortgages. 13% friends and family loans, 6% relied on angel investors, 4% relied on venture capital funding, leaving 12% who obtained funding from all other sources. Many of the most typical sources are simply not available to people living in developing countries, who therefore stand to benefit the most from Kiva. This is a trend that certainly bears watching. -dr

Rudofsky Associates » microloan

Kiva Providing a New Source for Small Biz Finance