Kiva Microloans: Not Just for Developing Countries Anymore
Kiva might have started as a microloan tool for entrepreneurs in developing countries, but the nonprofit has recently turned its attention to American cities, partnering with groups in Detroit and New Orleans as part of its Kiva City initiative. Last week, Kiva City officially launched in Los Angeles, announcing 13 initial L.A. loans in a press conference at Café 22, a recipient of one of those loans.
Kiva is coming to Los Angeles with the help of the Valley Economic Development Center, which is providing $700,000 in loan funding. As Mayor Antonio Villaraigosa emphasized at the press conference, the city’s small business-oriented economy is still reeling from the recession, and with Los Angeles County’s unemployment rate hovering around 12 percent, Kiva could do some much-needed work to help create jobs in the city. That’s certainly what happened with Café 22. The health-food restaurant’s co-owners, a husband-and-wife team, are using their $5,000 microloan to hire a delivery person and pay business license fees.
Now, for all the hype over microlending, it’s hard to ignore the flaws that need to be ironed out—it hasn’t been very effective at pulling people in developing countries out of poverty, microlenders seem to favor certain demographic groups over others, and some microlending companies have run into trouble with national governments.
The $700,000 Kiva has secured so far in Los Angeles definitely won’t be turning the city’s economy right around, but when you see tangible results–like a family-owned restaurant getting the funding it needs–it’s also hard not to feel just a little bit hopeful.
Photo via Kiva