Visa Inc. kicked off a program in Detroit on June 29 desigjned to expand credit availability for small businesses through a partnership with the microlending website Kiva.org.
The credit card network and Kiva.org plan to bring the Kiva City program to other cities in which small businesses have struggled to get access to credit. Businesses would be able to use loans obtained through the program to buy equipment, pay rent, hire employees and perform other crucial activities.
Kiva City’s operators will work with local community leaders to administer and fund loans. The average size of loans made by Kiva’s various lending partners is $7,000.
“Since launching in the U.S. two years ago, we have worked with our partners to replicate our successful global model, empowering each and every American to help our economy by adding as little as $25 to a small business owner’s loan,” Premal Shah, the co-founder of Kiva.org, said in a press release. The partnership with Visa will help the site “expand our reach and, as a result, open new avenues of capital for small business owners across the country.”
Kiva.org has a lending partnership with Accion USA, a member of the global microfinance organization Accion Network. Kiva connects lenders with borrowers and allows individual consumers to fund portions of loans. More than 595,000 people have loaned more than $223 million to 577,000 business owners worldwide since Kiva.org’s founding in 2005.
A goal of the Kiva City program is to provide a boost to economically distressed cities, Visa said in the release. Between 2006 and 2008, 20 of the 50 largest U.S. metropolitan statistical areas lost at least 1% of their small businesses, according to a study commissioned by Kiva.org and Visa.
The 10 regions that experienced the biggest losses include the Cleveland, Milwaukee, Pittsburgh, Detroit and Miami areas, according to the report.
President Bill Clinton announced the launch of the program June 28 at the Clinton Global Initiative America Conference in Chicago.
