The following is an excerpt from a Kiva Zip guest post written by Oakland's Mayor-elect Libby Schaaf. You can read the full text of her post here.

According to an Institute for Local Self-Reliance study released earlier this year, “42 percent of local businesses that needed a loan in the previous two years had been unable to obtain one"....This is where I believe Kiva Zip can play a valuable role. By empowering individual citizens to make loans as small as $5 to local small business owners, where banks are saying no to small business loan applications, we, the people of Oakland, can say yes – because we are more motivated by the economic independence and wellbeing of our city, than minimizing risk, and maximizing financial returns. And not only are Kiva Zip loans more accessible to our city’s entrepreneurs than small business bank loans (which typically require flawless credit scores, significant collateral, and several years of documented cashflows), but they are also interest-free – giving borrowers a valuable financial boost.

In my role as a member of Oakland’s City Council, last year I was proud to work with City Attorney Barbara Parker to co-author legislation making Oakland the first city in the country to become a Kiva Zip trustee. Over the last few months, the City has now vouched for 10 small business owners to access $55,000 of interest-free microloans on Kiva Zip.

My dream is that Oakland’s city government continues to become more transparent, innovative and efficient – all of which are principles embodied in our partnership with Kiva Zip. Where the reasons for conventional small business loan application rejections are often opaque, Kiva Zip lenders and borrowers communicate openly and transparently on the Kiva Zip website.

Where conventional underwriting focuses solely on financial data, Kiva Zip’s innovative social underwriting approach aims to fill information gaps in the small business lending market, by assessing a borrower’s character and trust network. And where other sources of capital can be expensive, Kiva Zip’s technology-based approach aims to pass on cost savings and efficiencies to the small business owners they serve in the form of zero interest rates and no fees. The growing collaboration between the City of Oakland and Kiva Zip is one public-private partnership of which I am truly proud.
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