Kiva, the Latino Economic Development Center, and Capital One Bank have announced the launch of Kiva City D.C., a Web portal that will provide small business owners in the greater Washington, D.C., area with access to crowdfunded microloans.
Following Detroit, New Orleans, and Los Angeles, Kiva City D.C. is the fourth Kiva initiative launched in the U.S. in the past year to connect local entrepreneurs to microloans from area residents. Through the Kiva City D.C. Web site, potential lenders can browse the profiles of small business owners and make a loan of $25 or more. In the nation's capital, LEDC will act as a field partner, identifying and screening entrepreneurs interested in applying for microloans online, determining the interest rate on the loan, and keeping the interest for operational costs. The Kiva D.C. initiative is supported by a $100,000 grant from Capital One to finance Kiva's operating costs, as well as a matching loan program in which the bank will match every microloan that D.C. entrepreneurs receive through the Kiva platform, up to a total $150,000. Local entrepreneurs can learn how to apply for a loan through the LEDC Web site.
Kiva co-founder and CEO Matt Flannery told the Washington Post that he hoped the site would make a dent in unemployment in the district. "If you had to boil it down to a single metric, it's really about job creation," said Flannery. According to the Post, Kiva City New Orleans has attracted hundreds of thousands of lenders and about fifty entrepreneurs, creating twenty-nine jobs. "I don't know if the average person in the community feels empowered to create" a business, said Flannery, but for many lenders, lending local is more compelling than lending to entrepreneurs outside their community. "You get an investment that is more patient, that doesn't really want a profit back, and wants to be participatory," he added. "When they get paid back, [most lenders] use the money to lend to somebody else."