Select Page

Note from Editors:

In an interview by the author, Justin Renfro talked about Kiva Zip’s lending philosophy for micro-businesses. This philosophy involves a reputation-based approach in approving loans. According to Justin Renfro, Kiva Zip seeks the borrower’s reputation and networks in the community prior to approval.


by  Ty Kiisel

Accessing can be difficult for every small owner, but particularly so for the smallest small businesses, or those just getting started who don’t have two or three years under their belt. A track record, strong history, and sound business fundamentals are the way most small business lenders evaluate the creditworthiness of a small business today as they try to make data-driven credit decisions.

While this can be a challenge for many new business owners leading young companies, there are now more opportunities than ever before to help young startups find the capital they need to fuel growth—and some of these options (or at least the lenders offering them) are taking lessons from the community bankers of 100 years ago. I recently spoke with Justin Renfro of Kiva Zip about what that non-profit is doing to help micro-businesses in the United States along with what they are doing differently that has made me a real fan.

Kiva Zip has been offering micro-entrepreneurs in the United States 0% interest loans of up to $5,000 (up to $10,000 on a second loan) for almost four years. They’ve been helping budding entrepreneurs all over the world since 2005—and have learned a thing or two about micro-lending that is now helping businesses all over the U.S.

Small Business Borrowing: Does Reputation Really Matter

Micro-lending is now helping businesses all over the U.S. (Credit to

A Little Bit of Capital, A Big Result

The challenges faced by small business owners here aren’t that different from those in other parts of the world. “It’s very similar,” says Renfro. “In fact, we’ve been supporting entrepreneurs all over the world since 2005—in places like Africa and South East Asia. Some of the same capital access needs that impact entrepreneurs in other parts of the world exist here too. I believe our experience and successes there make it possible for us to help many of the micro-entrepreneurs in the United States.”

Right now the average small business loan in the SBA’s 7(a) loan program is closer to $400,000 than $4,000 or $5,000. What the 1,300 or so entrepreneurs helped by Kiva Zip have experienced over the last few years is how sometimes a small loan can create a huge impact in the right hands.

“A borrower who might be looking for $3,000 or $5,000 would probably be pushed into a credit card or turned away entirely from their local bank,” Renfro said. “A loan that small just isn’t what the bank wants to deal with.”

He then shared the story of an entrepreneur in Arkansas who was making cheese out of the kitchen of his church. He didn’t produce much, only a few gallons every week, but his cheese was very popular so he wanted to take what had been a hobby and see if he could turn it into a successful business. He just didn’t have the financial resources to pull it off.



Read the full article:

Curated from Small Business Borrowing: Does Reputation Really Matter? – Forbes

Note: Featured Image credit

Subscribe Now to Stay Updated

* indicates required