(p. B6) Lending platform Kiva.org is scrapping its traditional approach to microfinance in the U.S. and instead is turning to something it calls social underwriting.
Before businesses can gain access to a no-interest crowdfunded loan of up to $10,000, Kiva is asking them to get 10 to 20 friends, family members or others to put up at least $25 each.
Kiva, a non-profit organization better known for providing financing in some of the world’s poorest countries, has found that this new approach improves repayment rates and believes it will provide a much-needed boost to its U.S. operation, where growth has been challenging.
. . .
Kiva said about 30% of entrepreneurs who start the private fundraising process can’t get enough people to vouch for them, while 92% of those who overcome that hurdle raise the money they seek. If the program in the U.S. succeeds, Kiva said it may export the private-fundraising model worldwide.
For the full story, see:
Ruth Simon. “Microfinancing Model With a Personal Twist.” The Wall Street Journal (Thurs., Dec. 17, 2015): B6.
(Note: ellipsis added.)
(Note: the online version of the story has the date Dec. 16, 2015, and has the title “Kiva Sets New Rules for U.S. Borrowers to Get Crowdfunded Loans.”)