San Francisco-based Kiva, best known for its microlending to developing countries, is now lending to small businesses in Los Angeles.
The L.A. lending program, launched Tuesday, marks the third location in the Kiva City program, following projects in Detroit and New Orleans. The Kiva City programs, part of a partnership between Kiva and Visa, are aimed at shoring up the economic health of urban neighborhoods, Kiva president Premal Shah tells the Los Angeles Times.
"We know that small businesses in the U.S. are the backbone of the economy," Shah tells the paper. "Two out of three jobs are created by small businesses every year."
Kiva provides the funds by asking everyday people to use its website and give financial support. The L.A. loan amounts varied from $5,000 to $10,000, the Times reports, and come with 8.5% to 10% interest and varying payback schedules. Once the loans are repaid, the money is returned to the individual funders.
One of the initial L.A. loans went to health-food eatery Café 22, the Times reports, after co-owner Yesenia Monroy had been turned down by three different banks. With her $5,000 Kiva loan she plans to hire a delivery person and pay off her business license fees.
The other L.A. loan recipients included other food-based businesses, as well as an apparel store, a private investigation business, and an artist, the Times notes.