What is "Social Underwriting"? | Kiva U.S.
Kiva U.S. is expanding access to capital for systemically underserved communities across the country. Since launching the program in 2011, we’ve facilitated more than $81 million in crowdfunded loans from over 372,000 lenders to more than 11,000 small business owners nationwide.
And we still feel like we’re just getting started.
We’re not just disbursing loans – we’re rethinking creditworthiness in a country where traditional lending relies heavily on credit reports and scores to assess risk. Roughly one in five U.S. adults is either credit invisible, meaning they have no credit history with the major credit bureaus and therefore no credit score, or has an unscoreable credit history due to limited or outdated (“stale”) credit activity.
For historically marginalized and economically disadvantaged groups, higher rates of credit invisibility and unscoreable credit histories reflect the effects of systemic inequality, income gaps, and limited access to financial services, including fewer opportunities to open credit cards or obtain affordable loans.
Rethinking creditworthiness begins with recognizing that the financial system was built for some people, but not everyone. Traditional banks and other financial institutions rely on data-driven systems that prioritize credit scores, cash flow, and collateral when evaluating risk. These norms and systemic biases shape who is considered “investable,” leading conventional lenders to focus primarily on these financial metrics.
At Kiva, we’re rethinking creditworthiness through our social underwriting approach, which prioritizes character and community over traditional metrics. We believe in providing fair and equitable access to capital and equipping small business owners and entrepreneurs with the financial resources they need to thrive. This approach ensures that everyone has the opportunity to pursue their dreams and improve their livelihoods, regardless of credit history, cash flow, or collateral.
We fill a gap in the financial market by saying “yes” when other lenders say “no,” unlocking capital and opportunity for those who are often underserved or underestimated.
Backing from community partners
Social underwriting relies, in part, on endorsements from trusted community partners. The Kiva U.S. program is built on a strong foundation of these partners – primarily Hubs and Trustees – local organizations that support entrepreneurs and help expand access to capital in their communities. By referring small business owners to Kiva, guiding them through the application, crowdfunding, and repayment processes, and providing wraparound services such as mentorship, coaching, and capacity building, these organizations play a key role in advancing financial inclusion.
Trustees participate in Kiva’s social underwriting through endorsements – short statements explaining why they are backing a borrower’s Kiva loan. These endorsements add credibility by highlighting a business owner’s character, business readiness, and potential for social impact. An endorsement reflects a Trustee’s confidence in an entrepreneur’s ability to succeed in their industry, repay the loan, and use the capital to grow their business in ways that benefit both their community and the broader local economy. For many Trustees, endorsing a borrower reflects a commitment to community trust and long-term impact, grounded in the organization’s own mission and values.
Although there is no penalty for not having an endorsement, applicants are encouraged to connect with local ecosystem partners, including startup accelerators, local governments, CDFIs, technical assistance providers, and other organizations focused on economic development and entrepreneurship. These partners often provide foundational business support and resources that help entrepreneurs navigate the Kiva loan process.
Character-based crowdlending via Kiva.orgKiva’s crowdfunded loan model builds on the same principles that underpin social underwriting: trust, community, and character. Often described as patient, fair, risk-tolerant, and catalytic capital, Kiva U.S. loans are accessible and community-backed, grounded in relationships rather than solely in financial history.
This approach draws inspiration from the work of Muhammad Yunus, a pioneer of modern microfinance, and Grameen Bank’s early use of group-based guarantees. While conventional lenders rely primarily on financial indicators to assess risk, Grameen Bank demonstrated that trust networks within communities can serve as a powerful indicator of creditworthiness. That same principle underlies Kiva’s crowdfunding model today, extending social underwriting to a global network of lenders.
The Kiva U.S. crowdfunding process includes two stages: Private Fundraising and Public Fundraising. During the 15-day Private Fundraising Period (PFP), borrowers are asked to rally support from 5–50 lenders within their personal networks, with the exact lender goal determined by the loan amount. Once this goal is met, the loan advances to Public Fundraising, a month-long period during which lenders from around the world can view the loan on Kiva.org and contribute.
The PFP process gives borrowers an opportunity to demonstrate both their entrepreneurial drive and their ability to promote their business by showing that they have a “trust network” willing to support them. During this period, friends, family members, colleagues, neighbors, clients, and others invest their trust – and their dollars – in the entrepreneur, reinforcing reliability to repay the loan. This community-backed credibility is powerful and motivating, as each new contribution, whether from someone close to home or a lender across the world, helps business owners build momentum and move closer to their funding and business goals.
Mancoba, a Kiva U.S. borrower and co-founder of Ubuntu Permaculture, a Newark-based nonprofit addressing food insecurity, reflects on what it means to see people around the world believe in their vision: “Seeing people worldwide believing in this vision of permaculture, of planting trees, reducing climate change and creating a local economy - what we’re doing - and willingly funding that, is so beautiful.”
Entrepreneurs frequently report increased confidence through the process, and for many, PFP strengthens their sense of purpose as they move forward.
As Carmelle, Kiva U.S. borrower and founder of NYC-based wellness and lifestyle company, C Fit Coaching LLC, explains: “The information required during the application process forced me to hone in on my message and bring to the forefront why I am in business and why I’m passionate about what I do. The process alone helped boost my confidence; it helped me humble myself—just a bit—as I asked former supporters, clients, friends and family and even acquaintances to help fund my endeavor. The generosity of the Kiva community is unmatched. I’m actually floored and eternally grateful. This experience made me feel even more proud to do the work that I do, to keep going, and to make a loud impact.”
The Private Fundraising Period helps borrowers reach their funding goals while also serving as a key risk management mechanism that influences repayment outcomes. Research shows a positive, causal relationship between PFP lender requirements and repayment rates, with loans supported by a larger number of invited lenders repaying at higher rates. This effect reflects the accountability established early in the process, when borrowers first turn to people they know for support. When early backing comes from trusted relationships, repayment often carries a deeper sense of personal responsibility.
As Brandy, a Kiva U.S. borrower and founder of the early childhood education center Gioiosa Montessori, shares: “Traditional banks don’t see those relationships (with colleagues, acquaintances, and friends from prior jobs, school, etc.) as valid collateral for loans, but in many ways I believe risking relationships with people for financial endeavors is one of the best ways for people to feel accountable for repaying funding.”
At Kiva U.S., character-based lending is at the heart of our work to advance financial inclusion. We’ve seen how social underwriting helps expand access to capital for entrepreneurs and small business owners who have historically been underserved and underestimated, while also fostering community and confidence. Thanks to the many partners who have supported our work since the program’s inception – and to the thousands of lenders who have backed U.S. businesses – social underwriting continues to expand what’s possible for individuals and communities alike.
