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1 Supporting Beginning Farmers with Zero Interest Loans Beginning Farmers Leaning Network (BFLN) March 8
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Supporting Beginning Farmers with Zero
Interest Loans
Beginning Farmers Leaning Network (BFLN) March 8
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980K starter loans, 67 countries
Crowdfunds $1mil in loans every 2.5 days
First, a little about
53% 47%
On Average, ALMOST HALF of the small businesses Kiva funds are in agriculture + food production
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0% interest loan
Funded entirely via online crowd-funding
:What is it?
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Targets financially-excluded small and/or new businesses that have difficulty securing
traditional financing
(usually too new, too small or too risky)
:Who it’s for?
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In short.....
“we design loans for small businesses other lenders cannot fund.”
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3 quick reasons why our loans suit beginner
farmers
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1. “Beginning”
2. “Small”
3. “Strong social ties”
1) “Beginning”
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• new, unproven businesses• little or no track record• Zip designed as the "first rung of the
credit ladder" • suits those with short credit histories -
does not assess worthiness using FICO scores but competence and character instead
• Worked on farms but 1st-time entrepreneur
• Bokashi aids “clean, non-stinky composting” as a compost accelerator and soil supplement.
• Needed $5000 to make a profitable batch of 1200lbs
• “With these purchases I can immediately turn a profit.This loan is the lifeline of Bokashi as I have completely exacerbated my own funds.”
BOKASHI EVOLUTIONOdorless compost accelerator, AZ
• Home based nursery selling 95 varieties of plants online
• Lost $5,000 in plants in 2012 because didn’t have proper greenhouse & shading during difficult weather
• Loan is to prevent plant loss and scale business
• “By operating the business right, I will be able to increase sales and hire one full time and one part time employee; hank you for the opportunity to reach my dreams and goals.”
GAIL, THE POND PLANT GIRLHome pond & artichoke farm. Visalia, CA
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The Federal Reserve estimates
> 80% small businesses use credit cards to fund some of
their working capital
2) “Too Small”
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• Beginner loans (Dairy cow or seeds or a freezer @$2000)
• Often too small to be serviced profitably by traditional lending model
• Small lenders is Kiva's specialty • International loan size ave <$500• USA Zip ave <$5000• By using PayPal and partners (like you) in lieu
of physical branch infrastructure, we can serve new and very small loans at zero cost
• Expanded garden - started keeping bees, growing organic herbs for restaurants in 2012
• Just 11 jars of honey in 2012
• “Need a little boost to help me get my first big season under way”
• $2000 for new hives and quality seeds (without using credit card debt)
LITTLE SPARROW FARM Organic Micro-farm. Ballston Spa, NY
3) “Strong Social Ties”
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• Kiva Zip qualifies borrowers not by Credit Score
• ...but by the willingness of established community-based organizations to vouch (“endorse”) borrowers
• Community Ties and Human Trust are what count in the Kiva Zip model
• Farming by its very nature is invested in the land, and rooted in the community - perfect for Zip
Churchview Farms, PA
Healcrest Urban Farm,
PA
CATAPULT PGH
SEEDSPOT, AZ
Bokashi Evolution,
AZ
Loyal to the Soil, AZ
MAINE ORGANIC FARMERS
Left field farm, ME
CALIFORNIA FARMLINK
Fiesta Farm, CA
SHADYSIDE NURSERY,
PA
BEEboy Honey, PA
Examples of trustees now endorsing beginning farmers across the country
GREENHORNS, NY
Little Sparrow Farm
Blue House Farm
Apitronics (mobile
farming apps)
Mendocino Organics
REBECCA HOCKADAY, NY
Floral Beauty Greenhouses
INSTITUTE FOR VETERANS,
SYRACUSE U
Trustees in NY endorsing small farms
6 reasons why Kiva Zip can help you lower barriers for Beginning Borrowers
1. Expand access to 0% interest loans
2. ...To small and new farmers not otherwise qualified for conventional loans
3. ...All loans are crowdfunded online from our lending community
4. We also lower cost of lending further by using digital platforms (PayPal), no overheads = no fees or interest, only pay back the principal
5. Which also directly connects farmers with an online “Social Network” of emotionally invested lenders
6. These they can then turn into fans, customers and brand advocates!
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So yes, it’s a great vehicle. But the real fuel is you.
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So yes, it’s a great vehicle. But the real fuel is you.
In the Kiva Zip model of character-based lending, “Trustees” - organizations or individuals that work closely with small entrepreneurs - are absolutely crucial.
Trustees are those entrusted to:-
Identify eligible and deserving borrowers for 0% interest loan
Trust = Character + Competence
Publicly endorse them on the Kiva Zip website
Support the borrower in their business (advice, mentorship, incubator space, networking)
Trustees have no financial risk if a borrower they endorse does not repay, but their reputation is tied to borrowers’ performance.
GREENHORNS, NY
Little Sparrow Farm
Blue House Farm
Apitronics (mobile
farming apps)
Mendocino Organics
REBECCA HOCKADAY, NY
Floral Beauty Greenhouses
INSTITUTE FOR VETERANS,
SYRACUSE U
Trustees in NY endorsing small farms
YOU
A SMALL FARMER
YOU KNOW
JOIN US AS A KIVA ZIP TRUSTEE
YOU
2 easy ways you can get involved
RIGHT NOW
REFER TO KIVA GOOD FARMERS
IN NEED
➊ ➋
Kiva Zip needs more trustees. Join us.
3 Things you can do right now to start helping farmers as a trustee
1. Think of 1 deserving borrower you know right now who could use a loan <$5000 - your pilot borrower
2. Think about why you TRUST in this farmer’s competence, and their character, and whether he/she is someone you’d vouch for - Y/N?
4. If Yes, email
SULIN LAU, Kiva Zip New York [email protected]
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If you are or know a borrower who could use a Kiva Zip Loan
Get in touch with me!
Rebecca Hockaday,
Kiva Zip Trustee @ Albany
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One final story.....
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By working together, we hope to have 100 of these stories this time next year.
Thank You!
SULIN LAU
Kiva Zip New York
Rebecca Hockaday
Trustee @ Albany
“I know great organizations”
“I know great local farmers”
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Appendix: back-up & reference slides
What’s in it for trustees?
Empower Clients
If you already work with financially excluded clients (unproven startups, or low credit score entrepreneurs)...
Kiva Zip will give the clients you endorse access to 0% business loans they would otherwise not qualify for
Promote what you
do
If you already do great work in your community that largely goes unrecognized or unpromoted...
being a Kiva Zip trustee automatically allows you to promote your work (in your own words) to >1 mil socially-conscious Kiva lenders everywhere. Also participate in Kiva PR initiatives.
Increase Impact,
Help Fundraise
If your organization’s potential funders care about tangible impact (businesses helped, $$ generated, jobs created)...
Kiva Zip helps you help more small businesses take off, faster. Endorsing a deserving borrower online takes 15min. Reducing time and cost for raising capital means you can impact more.
