A small business is a small business is a small business...
Kiva lenders make loans to individuals seeking to improve their business. They support expanding access to capital for these entrepreneurs. Most people know Kiva for its work across the globe – but did you know that includes the US? Kiva works with US-based microfinance institutions to address the lack of access to capital small businesses face around the world.
In the US, we hear a lot about the importance of small businesses. The vast majority of these small businesses employ fewer than ten employees and are considered “very small businesses” or “microenterprises.” According to the Aspen Institute’s most recent census, only about 1% of the 25 million US microenterprises receive credit or business assistance. These businesses face hurdles like limited credit history, informal financial documentation, and small capital needs.
As a Kiva Fellow, I am working with Accion East, an organization that is helping break down these hurdles and get these microenterprises the loans they need to stabilize and grow their businesses. Accion East is a 501(c)(3) nonprofit micro-lender with over 20 years of lending experience across the US. It is part of Accion, an international micro-lender with roots in Venezuela in the 1960s. I am working in the NYC office, the largest branch of Accion East.
And what does microfinance look like from my seat? As part of my day-to-day work, I write Kiva borrower profiles , so I get to read about the hopes and struggles of small business owners. These clients take great pride in their customer service and their ability to get the job done. And, they overwhelmingly state that finding manageable funding sources is their biggest difficulty. Accion East strives to meet the needs of these clients through personalized outreach and education. Loan consultants go the extra mile to pour over hand-written ledgers and shoe boxes filled with receipts. Corporate partnerships provide important mentoring and networking opportunities. And, with Latinos making up over half of their clients, Accion East provides resources in Spanish, Portuguese, and English.
This approach is working. Based on the Aspen Institute’s 2013 MicroTracker survey, Accion East has shown the following one-year client outcomes:
• Each business creates and sustains 4.3 jobs
• 97% of businesses remain open
• Businesses grow revenues by 16%
• Business owners increase their take-home pay by 25%
• 85% of business owners report that their business stabilizes or improves their household
Small businesses are often referred to as the “backbone of the American economy.” And, as bones need calcium to be strong, small businesses need access to capital to thrive. It’s great to see Kiva working with Accion East to address this need! Check out some of Accion East’s borrowers here.