Kiva U.S. has arrived is known for crowdfunding socially responsible business loans (in increments of just $25) between ordinary people halfway around the world from one another. The cornerstone of the non-profit organization is the online platform, which allows anyone with an Internet connection, $25 and a PayPal account to contribute to a small loan for someone in the developing world. The practice highlights the strength of the American dollar when efficiently applied in the developing world; $300 USD for a farmer in sub-Saharan Africa can be the catalyst for an escape from the cycle of poverty and a new life for him and his family. Here’s the kicker, not only could you and 12 friends help fund that farmer’s loan with just $25 each, but you’d very likely get your money back: Kiva boasts a 97.2% repayment rate.

In this sense, microfinance has helped turn the traditional financial system on its head through its use of non-collateralized small loans (from $80-300 USD) while maintaining strong repayment track records. Organizations like Kiva helped usher in this idea that access to credit, something that us Westerners generally take for granted, can be a powerful force for good when channeled appropriately. By having the ability to incorporate long-term business strategies (an impossible feat when loan sharks hold you over a barrel with exorbitant interest rates) the borrowers can invest in themselves and their family’s main source of income.

Comparably, the financial technology industry (FinTech) has been turning the traditional American banking industry on its head. As globalization brings connectivity to the distant corners of the planet, newcomers rely on mobile devices rather than desktop or laptop computers. In America we see glimmers of this in Apple Pay and Venmo, but in many other countries – especially in rural areas – these payment methods are commonplace and accepted nearly everywhere. In this vein, mobile online banking is fast becoming a convenient and sensible option, as well.

When you boil it down, the cause of so much financial distress in the U.S. stems from the FICO score. Your credit score is easy to damage but tough to resuscitate, and it follows you everywhere. Now the existence of credit scores is not without good reason, but there is an over-abundance of financially-illiterate people in this country, educated and uneducated included. Long before U.S. regulations began focusing on consumer protection, many people didn’t know what they were doing with their credit and unfortunately today their FICO scores reflect that. In today’s world, allowing such an antiquated system to have such widespread and significant influence simply doesn’t make sense. (We will dive deeper into this in the next blog post)

Kiva began working primarily in rural, developing nations, providing microloans to villagers who would, for example, buy a cow so they can begin sell dairy products at the local market. Now, after nearly a Billion dollars has been continuously lent and re-lent through Kiva, they are bringing their crowdfunding services to the home turf. In early June, Kiva Zip, the beta version of Kiva U.S., transitioned into’s main site.

What does this mean?

It means that you or anyone else can begin lending locally to small businesses in your area by going to You can also personally “sponsor” a small business owner who you believe has what it takes to grow his or her business effectively and repay that loan! The process is simple and in the end your “trustee” (the recipient of the loan) can receive a small business loan of up to $10,000 at 0% interest. Yes, that’s right. 0% interest.

The components of Kiva’s social underwriting process:

  1. Endorsement through a network of over 600 trustees around the country
  2. Three references from other businesses
  3. Lenders to support and help crowdfund the loan
  4. Issue one $25 loan themselves
  5. Bring in at least 15 friends of family-members to lend $25 to you

Over the last 10-15 years we have had the privilege of observing the evolution of a new and fascinating industry. Rooted in altruism and social capital, and aided by technology and the scale it provided, microfinance has reinforced the extent of human willpower as well as the vital need of financial independence and responsible financial services. With the launch of Kiva U.S., now we all have the opportunity to play an important financial role for business owners or burgeoning entrepreneurs who may also double as our neighbor sor friends. It’s one of those rare, amazing feats where technology and enterprise team up in a profound way. But don’t take my word for it. Go to and check it out for yourself.

Raheem Parpia is a Small Business Advisor for Kiva U.S. for the Greater Seattle Area.

About Raheem Parpia

Kiva Small Business Advisor for the Greater Seattle area. Reach me at