For Kiva Funding, Entrepreneurs Must First Convince Friends or Family

(p. B6) Lending platform Kiva.org is scrapping its traditional approach to microfinance in the U.S. and instead is turning to something it calls social underwriting.
Before businesses can gain access to a no-interest crowdfunded loan of up to $10,000, Kiva is asking them to get 10 to 20 friends, family members or others to put up at least $25 each.
Kiva, a non-profit organization better known for providing financing in some of the world’s poorest countries, has found that this new approach improves repayment rates and believes it will provide a much-needed boost to its U.S. operation, where growth has been challenging.
. . .
Kiva said about 30% of entrepreneurs who start the private fundraising process can’t get enough people to vouch for them, while 92% of those who overcome that hurdle raise the money they seek. If the program in the U.S. succeeds, Kiva said it may export the private-fundraising model worldwide.

For the full story, see:
Ruth Simon. “Microfinancing Model With a Personal Twist.” The Wall Street Journal (Thurs., Dec. 17, 2015): B6.
(Note: ellipsis added.)
(Note: the online version of the story has the date Dec. 16, 2015, and has the title “Kiva Sets New Rules for U.S. Borrowers to Get Crowdfunded Loans.”)

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