Wednesday, May 22, 2013
Global Microlending Organization Comes to Oakland
City partners with Kiva.org to give “crowdfunded” loans to local small businesses
OAKLAND, CA – On Tuesday, May 21, the Oakland City Council approved a partnership with global microlending organization Kiva.org to support local entrepreneurs and promote economic development in Oakland.
The Council voted Tuesday on a proposal by City Attorney Barbara Parker and City Councilmember Libby Schaaf to make Oakland the first U.S. city to partner with Kiva.org through the nonprofit’s Kiva Zip program, which will provide zero-interest loans to local small businesses. The City will serve as a “trustee” by endorsing three local businesses to receive loans of up to $10,000 each.
“Microlending has worked around the world to create jobs, economic opportunity and empowerment for small entrepreneurs and the communities they serve,” City Attorney Parker said today. “Small and ‘micro’ businesses are a major part of Oakland’s economy, many of them serving immigrants, refuges and low-income residents. A few well-placed loans to up-and-coming local entrepreneurs can build tremendous economic opportunity in Oakland neighborhoods.”
Under the proposal, Oakland initially will identify three businesses to receive zero-interest loans. The City will not be responsible for funding, guaranteeing or repaying the loans. Kiva Zip’s crowdfunding model allows individuals to look through profiles and loan requests of Oakland businesses at zip.kiva.org and loan $25 or more to businesses of their choice. As the initial borrowers pay back the loans, more Oakland businesses could be endorsed to receive crowdfunded loans.
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.
“This innovative model has helped countless small businesses around the world that don’t have access to traditional banking systems,” Councilmember Schaaf said. “Partnering with Kiva.org encourages investment in economic development and good local businesses in Oakland, and it gives the City a way to support local small business despite limited resources.”
Parker thanked Deputy City Attorney Kiran Jain and the City’s Economic and Workforce Development Department for their work on the partnership.
Kiva.org has raised more than $400 million to fund small entrepreneurs in 67 countries. The group’s mission is to create opportunity and alleviate poverty by providing loans to people who cannot access capital through traditional means.
“This initiative gives everyone a chance to help support local jobs and businesses in Oakland,” said Premal Shah, President of Kiva. “Every dollar lent to a small business helps create jobs in local communities, which in turn supports another local business, and another. As small businesses grow and expand, local economies improve, helping to support schools, city services and more vibrant and sustainable communities.”
Oakland businesses that are interested in the program can call (510) 238-7405.