KIVA

in US agricultural businesses

SUCCESS THUS FAR

• Farmers fund well• Best repayments rates of any

industry within Kiva Zip• Kentucky has one of the top

repayment rates of any state on Kiva Zip

Kiva

• Started in 2005 as an international microfinance non-profit.

• Moved to domestic loans two years ago after persistent asks from our lender community, who mostly reside in the United States.

• Peer-to-peer lending

Kiva Zip

Small businesses create

jobs in the United States

2 out of 3

small businesses hired just

one additional employee

1 in 3

We could be at full employment ifEvery day

small business loan applications

are rejected by banks

8,000

Access to capital is consistently a

constraint to growth reported

by U.S. small businesses

Top 3

How do borrowers get money traditionally?

Reinserting relationships into our financial system

People are underbanked, financial literacy may be low or complexity in finances can be intimidating

Damaged credit

Collateral. How do you get started when you have nothing?

Cashflow is king but pre-revenue start ups have a chicken and egg problem: How can you get started (and demonstrate a quality cash flow) without that initial injection of money?

Reasons why businesses cannot access capital

What’s the vision?

A hundred years ago, banking was all about human relationships.

Now it is all about FICO scores, credit reports and balance sheets.

Kiva Zip retains the power of modern technology and data…

…But reinserts human relationships into today’s transactional financial systems.

How do borrowers get money traditionally?

KIVA’S FINANCING

• Social Underwriting– Self-reported credit– No collateral

• Flexible Repayment Terms• Social engagement with lenders• No transportation requirements

Social Underwriting – Our Big Innovation

Trustees• Social underwriting

entirely based on trustee endorsement

• Great start, limited growth

Private Fundraising Period• Second component

of social underwriting• Significant decrease

in due diligence of loans

• Unlocking viral lender growth

Make a Loan to Get a Loan• Experimenting with

new ways to increase the social underwriting components of the program

Wisdom of the crowd• We rely on Kiva Zip

lenders for due diligence

• Expirations “weed out” “bad loans”

Top three ways to fund quickly

1. Be a farmer2. Great photo3. Use your network

What’s the vision? Social capital

SupportersConnection

sCustomers

Feleciai had over 500 lenders on her

loan

Many of them sent her messages of

support

She has increased her sales by being on Kiva

Zip

Kiva Community in Kentucky

AGRICULTURE AND FARMING

By Industry

Loans by industry

Food production Agriculture

Services Retail

Restaurant / Caterers Clothing / Jewelry

Other

We <3 Food, Farm, and Artisan businesses.

Loan Amounts

$5,000 loan maximum on any industry outside of farming

$10,000 loan maximum for farmers, first time lenders

DIFFICULTY IN FINANCING AGRICULTURE

• Transaction costs are high – Population less dense– Transportation increases

• Repayment is dependent on external factors–Weather, drought– Seasonality

• Collateral

Loan Uses

Pay for legal fees

Purchase vehicles

Hire staff and help

Improve their technology

Upgrade their websites

Market and advertise

Purchase inventory

Invest in equipment

Expand product lines

Kentucky Loanshttps://zip.kiva.org/loans

https://zip.kiva.org/loans/15762

Who is qualified?

High quality is defined in three key areas:

1) FundabilityThe attractiveness of a borrower to lenders. The speed at which they fundraise. Food producers and farmers fundraise faster than any other industry.

2) Repayment RateTheir ability to repay their loans.

3) Social Impact

Process to borrow

1. Apply online2. No formal paper work required, all

self-reported numbers3. Endorsement by Trustee4. PFP (Private Fundraising Period) – 15

Days5. Public fundraising on the site – 45

Days

Questions?