Kiva US 2022 highlights: Advancing Kiva’s mission and improving the US borrower experience

Kiva’s mission is to open financial opportunity for all — especially those in underserved communities. At Kiva US, we provide small business owners with micro-loans at 0% interest and with zero fees. We’re proud to celebrate the work we did toward furthering our mission in 2022 with the support, passion, and shared commitment to financial inclusion from our dedicated partners and lenders. Here are some of the things we achieved.

1. More Kiva US loans went to systemically marginalized groups

In 2022, Kiva US strengthened our outreach to business owners in marginalized communities.

Of our Kiva US borrowers in 2022:

• 71% were woman-owned (vs 65% all-time)
• 49% were Black-owned (vs. 36% all-time)
• 18% were immigrant-owned (vs. 15% all-time)
• 2% were refugee-owned (vs. 1% all-time)

The COVID-19 pandemic sparked an increase in research on minority-owned businesses and the difficulties they have when it comes to business success and accessing finance. A study from the Brookings Institution found that Hispanic and Black-identifying individuals had the lowest credit scores out of the studied ethnicities. Credit scores are critical for obtaining a loan from traditional finance institutions.

The same study found that a larger percentage of Black and Hispanic individuals tend to be underbanked or unbanked in comparison to white individuals. And according to the National Inclusive Metro Recovery Playbook, beyond financial terms such as credit scores, “Structural barriers in the economy result in deep racial inequalities in rates of business ownership.”

In 2022, 79% of Kiva US loans went to BIPOC borrowers. In our pursuit to rethink creditworthiness, Kiva serves as an opportunity for marginalized groups to gain access to capital and fulfill their dream of owning or growing their business. Kiva’s social underwriting process focuses on “character, not credit score” — granting borrowers the ability to prove their creditworthiness in a private fundraising stage, where family, friends, and their local network can be the first contributors to their loan. The private fundraising stage is step one out of two for the funding stage and greatly helps our borrowers in achieving their goals.

Beyond business ownership and success, Kiva’s work with systemically marginalized communities also strengthens local communities. BIPOC-owned businesses are more likely to serve their local markets than average U.S. businesses, and black-owned businesses hire black employees for two out of every three jobs.

2. Our Hub and Trustee partnerships helped us reach more marginalized borrowers

At Kiva, we have two partnership models which strengthen our scope and scale when it comes to identifying and supporting small business owners who could benefit from Kiva loans. Through these partnerships we have been able to increase the number of loans funded to marginalized communities. Kiva Hubs are a partnership model in which a local organization within a given region serves a larger population through creating a Kiva borrower pipeline. Through this pipeline, Hubs connect their clients (e.g., small business owners and entrepreneurs in their communities) to Kiva and our loan product. In 2022, 83% of Hub loans went to BIPOC borrowers, and 56% of Hub loans went to BIPOC women.

Trustees are organizations that, like Hub organizations, are invested in helping small businesses thrive. Trustees, through working with their own clients, can suggest a Kiva loan to a small business owner whom they deem prepared, and may “endorse” that loan application as part of our social underwriting process. Trustees can strengthen both an individual’s application and Kiva crowdfunding campaign through this element of community-backed credibility.

One Trustee-backed borrower, Jan, is a Filipina chef who was named “Best Chef” by South Sound Magazine. Jan received a $15,000 Kiva loan endorsed by Trustee Tacoma-Pierce County Chamber. Her Kiva loan was used to replenish the equipment for her business to help her expand to more markets.

Jan's Kiva loan helped her expand her Filipinx food business to more markets.

Jan discussed the impact of the Kiva loan on her community. “By growing, we can continue to highlight Filipinx cuisine and bring joy and connection through food,” she says. Jan says her Kiva loan impacted the food landscape of her town, “allowing Filipinx food to have a spotlight in Tacoma, WA at the same time providing more diverse dining options.”

“I want to continue to demonstrate how a Filipina woman can thrive in this food business and inspire people to follow their dreams, even when there isn't as much representation,” Jan says. “Furthermore how owning a small business can empower one by celebrating culture, creating a welcoming work environment, and building a community they desire.”

3. Borrowers were able to climb the capital ladder

An independent evaluation of the impact of the Kiva US program conducted in 2022 quantified the struggles our borrowers face before accessing a Kiva loan.

• 73% of our borrowers have never applied for a business loan.
• 36% of our borrowers have no credit score or a credit score less than 600.
• 53% do not have a credit history.
• 76% could not find a better alternative to the Kiva loan.

These statistics show that Kiva is able to help those who wouldn’t otherwise be able to access finance. On top of this, once they have repaid their Kiva loan, they have more of an opportunity to access more funds from other providers — 52% of borrowers secured additional financing following their Kiva loan.

4. We launched business credit reporting to expand opportunity for borrowers

On top of expanding opportunity through granting loans to otherwise financially excluded business owners, Kiva launched a new program to help more borrowers “climb the capital ladder” than before. Business credit reporting grants borrowers the ability to build business credit through their loan. Kiva will be working with Experian and Dun & Bradstreet for reporting and the Credit Bureau Alliance for processing and updating. Borrowers who choose to opt-in and utilize the reporting will be able to reap the benefits of building business credit, giving them more opportunity to access finance from other institutions.

5. Kiva improved inclusivity and representation for LGBTQ+ and non-binary borrowers

At Kiva, diversity, equity, belonging and inclusion are some of our core values, and we are thrilled to share a new way in which we have been able to highlight this in our work. In 2022, Kiva US created a new category on site for LGBTQ-owned businesses. We also added the option for Kiva borrowers to select a non-binary gender when applying for a loan. We are excited that through these changes, lenders will be able to find loans that support LGBTQ and non-binary community members.

6. We created a Technical Assistance Program to help borrowers succeed in their businesses

Our 2022 Technical Assistance program, generously funded and made possible by our partners at Wells Fargo, was developed with the goal of equipping borrowers not working with Hubs/Trustees with financial management best practices. Kiva US connected borrowers with Wave Accounting at the start of their Kiva journey and partnered with Start Small Think Big to provide borrowers with one-on-one business and financial consulting. By equipping borrowers with access to technical assistance, we hope to increase their chances of succeeding in their businesses.

A look at 2023

For 2023 we are excited to continue focusing on marginalized communities by growing our network of Hubs, Trustees, and other strategic partners. Our partners help extend our work and amplify our impact through their dedication to small business development within their communities. The immense scale of Kiva’s impact, after all, is thanks to the collaboration and commitment to increasing financial inclusion shared by a community of partners, lenders, and borrowers.

If you are interested in applying for a Kiva Loan, please visit this link. Or, lend to a Kiva US borrower here.