Hub for crowdfunded microloans launched to support Lincoln small businesses
A local hub of a national nonprofit offering no-interest loans has been established in Lincoln, after an official launch on Friday.
Kiva is a global nonprofit that crowdfunds microloans for small businesses with the goal of expanding financial access to underserved communities. Businesses that use the hub will also get support from partner organizations, said Farshad Maltes, the executive director of Community Development Resources.
"By coming through our hub, not only do they get the benefits of the crowdsourcing, but they get the benefit of our relationship, but also the technical support that we'll provide," Maltes said.
Kiva offers small business loans by having other individuals lend money toward the potential borrower's goal, according to Kiva's website . Borrowers then repay their lenders after their loan is funded. The Lincoln hub is supported by Community Development Resources, a nonprofit lending organization.
To start the program, Maltes said Community Development Resources partnered with ECHO Collective, which offers support for refugee and immigrant women.
"We had done a partnership with ECHO Collective, where we had a cohort of six refugee women who had taken our six-month program and the pilot, (and) what we did was we had any person that completed that program would automatically qualify for a microloan," Maltes said.
Kelly Ross, the founder and executive director of ECHO Collective, said Bia Espinosa, the owner of Susa's Sweets & Balloons, met her $7,500 Kiva loan goal in 12 days through the donations of 104 community members.
Espinosa had previously been one of the participants of Union Bank & Trust's pop-up program .
The loans are anywhere from $1,000 to $15,000 and have a 12- to 36-month repayment period with no interest and no fees. Lenders can make direct loans for as little as $25.
Kiva was founded in 2005 and has had almost 5 million borrowers in over 90 countries, according to its website.
The Lincoln hub was first announced in March during Mayor Leirion Gaylor Baird's "Grow the Great Life Week."
Gaylor Baird first became aware of the program after participating in a Bloomberg Economic Development cohort, and the program is the first of its kind in Nebraska. Crowdfunding is a way for the community to support entrepreneurship, Gaylor Baird said.
"Kiva loans can change lives and what's more is that Kiva empowers us to be a part of this life-changing work," Gaylor Baird said.
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