Takin’ it to the Web: Online Microbusinesses Thrive in Recession

By Erica Dorn, KF7 and now Kiva Coordinator at ACCION USA

I spend a good chunk of my time at ACCION USA trying to explain to the entrepreneurs what Kiva is, and why they should be as excited as I am to get their profiles on the internet so regular people can lend to them. So, you can imagine my surprise when an ACCION USA borrower, Dan, told me he found out about ACCION USA through Kiva’s website, instead of the other way around!

Dan and his self-designed greeting cards

Dan is certainly no stranger to the internet’s powerful reach—his social media savvy shows, even though he claims to be a novice. His greeting card company, iZon, was started at his dining room table, and has expanded beyond his wildest expectations. Now he is planning to bring his business into the internet age with a new website and marketing campaign.

Internet-based businesses in ACCION USA’s portfolio have been performing extremely well lately, largely because they have low overhead. Freed from the obligation of rent, they have fewer financial burdens to manage in the event that sales take a turn for the worse due to the recession. Joshua, for example, runs his vintage clothing business solely on the internet. Instead of investing capital in rent for a storefront, he sells his handpicked items online.

The economy may or may not be on the path to recovery, but it’s clear that jobs will keep dropping for a while longer. This means that more and more budding entrepreneurs are seeing the recession as an opportunity to go into business for themselves. While ACCION USA provides vital financial services to this population of entrepreneurs, the internet provides a low-cost marketplace for their ideas.

Though online businesses may not be the first thought that comes to mind when thinking of the typical microfinance borrower, I know I’m definitely curious to see if the internet becomes a more common marketplace for microbusinesses over the next few years. Business presence on the web may also become a metric for social impact as ACCION USA works with entrepreneurs to develop cost-saving solutions to doing business.

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