Oakland partners with Kiva lending organization ---

Victor Caicero is looking forward to opening his second coffee shop in San Francisco. Born to a large and poor family in Cordoba, Mexico, Caicero is now a success story of Kiva, a global non-profit organization with a mission to connect people through lending to alleviate poverty. Leveraging the internet and a worldwide network of microfinance institutions, Kiva lets individuals lend as little as $25 to help create opportunity around the world.

On Tuesday, May 21, Oakland City Council approved a partnership with micro-lending organization Kiva.org to support local entrepreneurs and promote economic development in Oakland. Through the nonprofit’s Kiva Zip program, which will provide zero-interest loans to local small businesses. The City will serve as a “trustee” by endorsing three local businesses to receive loans of up to $10,000 each.

“Thanks to Kiva and many other friends that lend a helping hand when I needed it the most, I was able to open my business,” wrote Caicero, who opened his first café with a Kiva loan and is now accepting loans for his second cafe. “This is a life's dream, I feel so empowered now to continue growing my business and providing a better life for my family.”

Under the proposal, Oakland will identify three businesses to receive zero-interest loans. The City will not be responsible for funding, guaranteeing or repaying the loans. Kiva Zip’s crowd-funding model allows individuals to look through profiles and loan requests of Oakland businesses at zip.kiva.org and loan $25 or more to businesses of their choice. As the initial borrowers pay back the loans, more Oakland businesses could be endorsed to receive crowd-funded loans.

“Micro-lending has worked around the world to create jobs, economic opportunity and empowerment for small entrepreneurs and the communities they serve,” Oakland City Attorney Barbara Parker said. “A few well-placed loans to up-and-coming local entrepreneurs can build tremendous economic opportunity in Oakland neighborhoods.”

The program already has helped some Oakland businesses including the Mandela Foods Cooperative, which received a $5,000 loan to improve marketing and buy reusable and recycled bags.

“We see a lot of potential in Oakland,” says Jonny Price, senior director at Kiva’s office in San Francisco. “I have really been struck by the strong sense of community and common cultural identity in Oakland, and our model is perfectly suited to tap into that kind of community.”

Price explains that when people apply for a loan through Kiva, they need to be endorsed by a trustee, such as organizations or people who vouch for borrowers on the Kiva website.

“By endorsing a borrower, a trustee is saying that they believe in the entrepreneur and they want to say that publicly and help them access this opportunity with Kiva Zip,” says Price. “Small business owners are trustees, and the city of Oakland is the first city to become a trustee.

“We are trying to build trust networks in the community, investing in people and the community,” he adds.

Another Bay Area business owner seeking a loan through Kiva is Olinda Cortez, who was endorsed by Caicero. Originally from El Salvador, Cortez owns a small hair salon in South San Francisco and has a loan request on Kiva for hair cutting chairs and other equipment. 

“This innovative model has helped countless small businesses around the world that don’t have access to traditional banking systems,” Councilmember Libby Schaaf said. “Partnering with Kiva.org encourages investment in economic development and good local businesses in Oakland, and it gives the City a way to support local small business despite limited resources.”

Kiva.org has raised more than $400 million to fund small entrepreneurs in 67 countries. So far, there have been approximately fifty loans in the Bay Area. The group’s mission is to create opportunity and alleviate poverty by providing loans to people who cannot access capital through traditional means.

“This initiative gives everyone a chance to help support local jobs and businesses in Oakland,” said Premal Shah, President of Kiva. “Every dollar lent to a small business helps create jobs in local communities, which in turn supports another local business, and another. As small businesses grow and expand, local economies improve, helping to support schools, city services and more vibrant and sustainable communities.”

Oakland businesses that are interested in the program can call (510) 238-7405 or visit www.zip.kiva.org for more information about Kiva and how to make a small loan to people like Cortez or Caicero.