Microfinance in the USA

By Meg Gray, KF11 United States

It was a controversial move when Kiva approved it’s first partners serving clients in the US almost a year ago, but after just a few weeks working as a Kiva Fellow with Opportunity Fund, a Kiva Field Partner serving clients in the San Francisco Bay Area, I am convinced that it was the right decision. Not only did adding US partners attract a new group of lenders to Kiva.org and fail to negatively impact international lending (as some predicted), but I am also incredibly impressed by the work US partners like Opportunity Fund are doing. More than 85% of small businesses that have the support of Opportunity Fund are still open 2 years after receiving the loan and Opportunity Fund clients experience a median 27% increase in business revenues. In addition to their successful small business loan program, Opportunity Fund has an IDA (matched savings) program and they provide one-on-one business advising to their clients. Furthermore, they are dedicated to working with clients that are often underserved by traditional banks in the US: 60% of their clients are women, 31% are Hispanic/Latino, and 25% are African-American.

For example, this morning I met Magdalena, an Opportunity Fund client whose loan will be fundraising on Kiva.org soon. Magdalena moved from Mexico to the Bay Area about 14 years ago and started an in-home daycare business 3 years ago. With her last loan from Opportunity Fund, she was able to buy educational materials and other equipment to improve the care she provides to children in her home. And with her current loan she is hoping to expand her business even further into a full-fledged preschool. While she has tried several times to get loans from traditional banks, these experiences have left her feeling unsettled and the loan terms where too rigid to meet her needs. She is much happier working with Opportunity Fund and she is excited about what she will be able to achieve as an Opportunity Fund client.

Opportunity Fund also recognizes the importance of teaching others about microfinance. So I can’t help but ask, where are you going to be May 20-21? If you are in the Bay Area and interested in learning more about microfinance, I suggest you block out your calendar and head to the Microfinance USA conference in San Francisco. The event, which is being presented by Kiva.org, Opportunity Fund, Acción USA, and the Silicon Valley Microfinance Network, is sure to be a wonderful learning experience for people with all types of experience and interest in the microfinance sector- from first time Kiva lenders to MFI Executive Directors.

Meg Gray is currently starting her third placement as a Kiva Fellow. Prior to working with Opportunity Fund, Meg worked with CEPRODEL in Nicaragua and Fundación Mujer in Costa Rica.

Want to do more? Make a loan on Kiva or learn more about microfinance in the United States by joining the “Friends of Opportunity Fund” Lending Team or checking out the Opportunity Fund website. And don’t forget the Microfinance USA conference is just days away, so register now.