Kiva Debuts New Direct to Social Enterprise Program

Earlier this week, microfinance platform Kiva announced the launch of its new direct to social enterprise program, which is described as a pilot program that aims to raise capital for social enterprises in a new and more efficient way.

KivaKiva revealed in a blog post:

“Social enterprises have the potential to strengthen their communities and reduce poverty by expanding formal employment, scaling innovative social solutions and driving sustainable economic growth. However, they often fall in the ‘missing middle,’ meaning they are too small for traditional banks, but too big for microfinance.”

The portal also revealed that it used two different models to support small social enterprises in the past:
  • The social enterprise itself is set up as a Kiva Field Partner: The social enterprise must have its borrowers, whose profiles they post on Kiva.
  • The social enterprise is a borrower of a Kiva Field Partner: The Field Partner is typically an impact investment fund, social enterprise  accelerator or other organization whose primary clientele is social enterprises.

Kiva also shared:

Money Benjamin Dollars 100“Based on the results of these previous 2 models, Kiva is embarking on its next iteration of crowdfunding capital for social enterprises: the direct to social enterprise program. Through this pilot, Kiva will explore whether it can reach more social enterprises and lower operational costs (for the social enterprise and for Kiva) by facilitating lending directly.”

Kiva will post a single loan for each social enterprise (which means no Field Partner, just Kiva itself). To qualify for the program, a social enterprise must be legally registered entity that has a measurable social impact, sustainable business model and active steam of operating revenue. Sizes of loans range from $10,000 to $50,000 with terms of 18 months or less.

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