In a move that is seen as symptomatic of the growing financial crisis, Kiva.org, the online micro-lender which helps fund small businesses in impoverished countries, began last month lending to low-income entrepreneurs in the US. The US listings will start with about 45 businesses in Boston, New York, Miami, Atlanta and San Francisco. The move is prompted by the reluctance of US banks to lend during the past nine months, said Premal Shah, Kiva’s president. People contribute in $25 increments on the basis of business plans on Kiva’s site. The money is pooled to finance small loans ranging from a few hundred to several thousand dollars. Since 2005, Kiva has raised more than $75 million from 500,000 people and lent the money to about 180,000 entrepreneurs in 44 countries. Whether donors will be more moved by the plight of struggling entrepreneurs nearer home than they are by that of those in poor countries is a matter for speculation. As Shah remarked, ‘it will be interesting to see if someone from South Central Los Angeles will be able to get a loan on our site more quickly than a small business in south Sudan.’
San Francisco Chronicle, 10 June 2009
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