TITLE
Recommendation to authorize the City of Long Beach to become a Kiva Trustee and facilitate the access of zero percent interest, no-fee microloans for local small businesses. (Citywide)
DISCUSSION
On November 7, 2017, the City Council approved a recommendation directing the Economic Development Department (ED) to work with the Los Angeles Local Initiatives Support Corporation (LA LISC) and the Long Beach Community Foundation (LBCF) to establish Long Beach as a “Kiva City.” Kiva is an international nonprofit organization that manages an online crowdfunding platform that enables entrepreneurs and small businesses to access zero percent interest, no-fee microloans ranging between $500 to $10,000. Kiva aims to assist local entrepreneurs to lower the cost of capital, expand access to capital, and connect with a global community of lenders. Unlike a traditional commercial loan underwriting process, Kiva loans are approved in part through “social underwriting” where character and trustworthiness are determined by friends and family lending a portion of the loan request, or by an approved Trustee vouching for the borrower. Other factors, such as business revenue, loan description and amount requested, and online presence are also considered during the loan approval process. Kiva makes the final decision on whether a loan is approved.
Through the partnership with LA LISC, the Kiva Program provides dollar for dollar matching funds for borrowers in the City of Long Beach (City) that are endorsed by a local Kiva Trustee. Trustees are people or organizations that publicly vouch for entrepreneurs through social underwriting for a Kiva loan. Under the terms of the Kiva program, Trustees have no financial or legal liability for loans they endorse. Additionally, individual lenders have no guarantee of payment.
Kiva Trustees are typically either nonprofits, business incubators, business improvement districts, a chamber of commerce, university programs, government agenc...
Click here for full text