KIVA ZIP: a 10 slide Intro

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0% interest loan product funded

entirely via online crowdfunding

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Designed specifically for financially excluded, socially impactful entrepreneurs who need small starter loans up to

$5,000

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Building off the success (and scale) of Kiva.org around the world...

967,972 entrepreneurs funded since 2005

67 countries

US$150 mil p.a. in crowd-funded loans

US$1mil every 2.5 days!

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....built specifically around the unique needs of US micro-entrepreneurs

Kiva Zip: reinventing small biz borrowing

• Expand access to 0% interest loans • ...To small businesses not otherwise qualified for

conventional loans• ...All loans are crowdfunded online from our lending

community• We also lower cost of lending further by using digital

platforms (PayPal in the US)• Which also directly connects borrowers with a ready

community of lenders who they can turn into fans and advocates

How ZIP works: example of Victor, SF

Lenders can also check out his Yelp

profile

Repaid 10 months on time

Victor engages his lenders with the “conversations”

feature

Now applying for a second ZIP

loan of $10,000

Created 5 new part-time

jobs

How ZIP works: other borrowers

“Kiva Zip is an invaluable resource for entrepreneurs”Emiliana, Jarred Brine

“I didn’t think character based lending existed anymore. It’s an amazing use of technology to bring us back to the basics.”

Cristian, J Style at Home Inc

“Having 45 people invest in Pac Brew Labs is like hiring 45 brand ambassadors”,

Bryan, Pacific Brew Laboratory

Kiva Zip “Trustees” and why they matter

In the Kiva Zip model of character-based lending, “Trustees” - organizations or individuals that work closely with small entrepreneurs - are absolutely crucial.

Trustees are those entrusted to:-

Identify eligible and deserving borrowers for 0% interest loan

Publicly endorse them on the Kiva Zip website

Support the borrower in their business (advice, mentorship, incubator space, networking)

Trustees have no financial risk if a borrower they endorse does not repay, but their reputation is tied to borrowers’ performance.

What’s in it for trustees?

Empower Clients

If you already work with financially excluded clients (unproven startups, or low credit score entrepreneurs)...

Kiva Zip will give the clients you endorse access to 0% business loans they would otherwise not qualify for

Promote what you

do

If you already do great work in your community that largely goes unrecognized or unpromoted...

being a Kiva Zip trustee automatically allows you to promote your work (in your own words) to >1 mil socially-conscious Kiva lenders everywhere. Also participate in Kiva PR initiatives.

Increase Impact,

Help Fundraise

If your organization’s potential funders care about tangible impact (businesses helped, $$ generated, jobs created)...

Kiva Zip helps you help more small businesses take off, faster. Endorsing a deserving borrower online takes 15min. Reducing time and cost for raising capital means you can impact more.

In general, Trustees should endorse only those entrepreneurs who They trust to repay (character-based assessment) Possess the financial ability to repay (a new loan doesn’t increase indebtedness)

Borrowers: who should you endorse?

Character AssessmentKiva Zip leaves it up to trustees to

make a judgment call in these areas

Minimum CriteriaMust be met unless there are exceptional

circumstances

• Do you deeply trust that they are the kind of person who will commit to repaying their loan?

• Do they have a viable business or business plan?

• Do you know what they will use the loan for and how it will impact their business?

• Will this loan have a positive social impact?

• The borrower's debt-to-income ratio must be less than 35%

• The borrower cannot have over $3,000 in past-due debt

• The loan must be less than 75% of the borrower's income

• The borrower cannot currently be in foreclosure or bankruptcy

• The borrower's annual income must be less than $100,000

• The borrower must be over 16

Once a trustee has identified a borrower they want to endorse, there are five principal steps before the borrower can begin fundraising for an interest-free, crowd-funded loan on the Kiva Zip website:

Endorsing a borrower is easy

Trustee application

Trustee endorsement

Borrower application

Trustee review

1 2 3 4

Trustee fills out a ‘trustee application’ form, telling Kiva Zip (and lenders) why they want to be a trustee

•One-time

•Online

•20-30 mins

For each borrower they endorse, trustee writes a simple online endorsement

• Describes the borrower’s character to lenders

•10 mins

The borrower’s turn! Borrower completes a ‘loan application’

•Their background

•Their business idea

•“Why loan to me?”

•2-3 hours

•Online form

Once submitted, every trustee gets to review the loan application

•Can choose to approve

•Or suggest changes, improvements to borrower

Kiva Zip team’s final review before posting it to the website.

•Loan begins online fund-raising

•3-6 weeks to fund-raise depending on size of loan

Kiva Zip team review

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“Wow, Cool! How do we get started?”

1. Recommend all new trustees start with only 1-3 “pilot” borrowers

2. For each, 1st loan up to $5000

3. Only expand to more borrowers after 10 months’ total repayment history (e.g. 2 borrowers with 5 monthly repayments each)

4. 2nd loan up to $10,000

5. 3rd loan up to $20,000

That’s it. Let me know if you have any questions?Sulin Lau, Kiva Zip NYC

[email protected], mobile: 4156906510

website : zip.kiva.org

Or email us at [email protected]

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Appendix: other useful information about Kiva Zip

What do the loans look like?

0% interest

Business loans

Small size – first loan can be up to $5k; subsequent loans up to $50k

Up to 24 months term

Grace periods available for some loans

Repayments made in regular weekly or monthly installments

Disbursals and repayments made electronically via Paypal

Posted and ‘crowd-funded’ online

Example organizational trustee profilePhoto (or logo)

of the organization

List of borrowers endorsed

Link to website,

Facebook page, Twitter feed,

etc.

Information about the trustee, how they will do due diligence on borrowers, etc.

Information on number of

borrowers endorsed, and

repayment data

Example trustee endorsement

The trustee endorsement shows up

as a tab on the borrower’s loan page

We ask trustees four simple questions

about why they are endorsing the

borrower for a loan

Borrower success stories in the press:

Success stories

Carol CookeHot Dogma Depot

Seth GoldBamboo Apparel

Tulio CardozoCollaborative Benefit

DB ShroederPuzzle Piece Theatre

WEDC in New York

Trustee partnerships in the press:

Michigan Corps in Detroit American Dreams