PayPal and Kiva empower entrepreneurs around the world.

Jun 09 2020 | PayPal editorial staff

Kiva, the microlending nonprofit, was founded in 2005 on a simple premise: What if people could invest in small businesses around the globe as easily as they buy products online?
The Kiva platform answered this question with easy tools to connect small businesses around the world with people willing to loan money. In April 2005, Kiva’s first 7 loans for entrepreneurs were funded; 6 months later, all the loans had been repaid.

Today, the Kiva microlending platform has facilitated $1.43 billion in loans in $25 increments to 3.6 million borrowers in more than 98 countries.* These small amounts can make enormous differences to entrepreneurs who need something as basic as a sewing machine or a goat to generate income. Once Kiva’s lenders fund a loan, more than 90% recycle the funds to make another loan.

“From providing women with financial security for their families and communities, to giving farmers financial flexibility for unpredictable growing seasons, Kiva has facilitated unprecedented levels of entrepreneurship,” says Chelsa Bocci, one of Kiva’s very first employees. “The ripple effects are so inspiring – when women access fair credit, they gain decision-making power in their homes and communities. Farmers can invest in equipment to increase yields, or they can access flexible credit that allows them to repay at harvest.”

PayPal helps Kiva stay true to its mission.


From its very first loans, Kiva has used PayPal as its exclusive online payments processor – helping to unlock funding for entrepreneurs who wouldn’t otherwise have access to affordable capital. Kiva’s relationship with PayPal started even before the nonprofit’s launch. Premal Shah, Kiva’s cofounder, was a product manager at PayPal when the concept for Kiva began percolating. Working with Kiva’s other cofounders, Shah helped foster PayPal’s commitment to the fledgling organization: to process every loan made through Kiva without charging any transaction fees.

“People want to know their money is being used efficiently and going to the cause they believe in,” Bocci says. “PayPal’s continued support allows us to send every dollar lent on Kiva to the field, which is a big deal. More people have been able to follow their dreams because of our PayPal partnership.”
 
PayPal launched a Kiva lending campaign in 2016, inviting both customers and employees to first make a loan with their own funds to receive an additional $25 credit to make another. This incentive helped to build familiarity with the lending process and showed new lenders how loans made with their own funds will be repaid, and eventually relent. This not only helped grow the community on Kiva, but drove significant long-term impact through lending.
 
During PayPal’s 2018 and 2019 Kiva lending campaigns, more than 22,000 PayPal customers, merchants and employees made nearly $1M in loans.** For employees involved in the Kiva campaign, it was a clear example of the PayPal mission—democratizing financial services—coming to life in a different way.
 
PayPal has served as Kiva’s payments partner from its early days through a belief that everyone should be able to participate and thrive in global and local economies. With help from PayPal, Kiva can build a more inclusive global economy, reaching women, minority communities, and families in developing countries.

Creating successful businesses worldwide.

As Kiva helps entrepreneurs build their businesses, success stories abound. Tess Murphy, Kiva’s Strategic Partnerships Manager, started off as a fellow with Kiva. She recalls a trip to visit a borrower in Zimbabwe. “I had ridden down a dirt road for seven hours to meet a borrower in Zimbabwe, and I had a list and picture of all the lenders who had lent to this borrower from around the world – from Belgium to Brazil to Canada. After seven hours down this dirt road, I met the borrower in her shop, and I showed her the list of these lenders and her eyes just kind of welled with tears. She couldn’t believe that people around the world had taken a chance on her, believed in her business, and combined their money to lend to her. This really inspired her to tell me about her next business plan. In addition to that, she also told me that through this business loan, she wasn’t only able to improve her business and expand it, she also started adopting children in the village who had been orphaned by HIV.”


 

The content of this article is provided for informational purposes only. You should always obtain independent business, tax, financial, and legal advice before making any business decision.
 

* Based on the nonprofit’s internal data.
** PayPal internal data 2019.

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