Wednesday, May 20, 2013
Oakland City Council to Vote on Microlending Initiative
Partnership with Microlending Organization Kiva to Provide Capital to Small Local Businesses
OAKLAND, CA – On Tuesday, May 21, the Oakland City Council will vote on a proposal to partner with an international microlending organization to support local entrepreneurs and promote economic development in Oakland.
The proposal sponsored by City Attorney Barbara Parker and City Councilmember Libby Schaaf will create a partnership with Kiva.org, a nonprofit organization that has raised more than $400 million to fund small entrepreneurs in 67 countries. Kiva’s mission is to create opportunity and alleviate poverty by providing capital to people without access to traditional banking systems.
Under the proposal before the City Council on Tuesday, Oakland will become the first U.S. city to partner with Kiva through the organization’s Kiva Zip program. The City will serve as a “trustee” by endorsing three local microbusinesses to receive zero-percent interest loans of up to $10,000 each.
“This innovative model has helped countless entrepreneurs around the world,” City Attorney Parker said today. “Small and ‘micro’ businesses play a major role in Oakland’s economy, many of them serving immigrants, refugees and low-income residents. A few well-placed loans to burgeoning entrepreneurs can make a tremendous difference in our community.”
Under the proposal, Oakland initially will identify three businesses to receive capital. The City will not be responsible for funding, guaranteeing or repaying the loans. Kiva Zip’s crowd-funding model allows individuals to look through profiles and loan requests of Oakland businesses at zip.kiva.org and loan as little as $25 dollars to businesses of their choice. The program already has helped some Oakland businesses including the Mandela Foods Cooperative, which received a $5,000 loan to improve marketing and buy reusable and recycled bags. As Oakland borrowers pay back the loans, more Oakland businesses could be endorsed to receive crowd-funded loans.
“By providing capital to Oakland microbusinesses, this partnership will help strengthen our economy one local entrepreneur at a time,” Councilmember Schaaf said today.