Solo & Kiva – Partnering to Strengthen the Capital Ladder for Financially Excluded Americans
For the lowest-income individuals, it’s disproportionately expensive to borrow money. With predatory interest rates and unattainable criteria, getting a loan in America is a defeating — if not dangerous — process for many.
Twenty-five percent of Americans are unbanked or underbanked. 78% of American workers live paycheck to paycheck. Implicit and explicit biases mean that women and people of color are three times more likely to see their credit applications rejected. Left with no other options, they fall prey to payday lenders, where a small loan can accrue over 400% APR.
Tackling the same problem through two different solutions, SoLo Funds and Kiva offer affordable loan products – one of personal lending, one of business lending. Through their respective communities of lenders, both SoLo Funds and Kiva have supported thousands of Americans — and now are forming a partnership. The aim is to build out the safe and reliable financing options available for low-income and financially excluded individuals and entrepreneurs.
SoLo Funds was created for Americans living paycheck to paycheck as a lending tool to support emergency or everyday personal needs like utility bills, medical bills, or rent. They offer personal loans ranging from $50 to $1,000 that are delivered within hours through a simple and non-approval sign-up process. Kiva is like SoLo Funds in that it’s designed for a financially excluded borrower. However, instead of individuals, Kiva lends to entrepreneurs and business owners. The loans start at $1,000 and can range up to $15,000.
As COVID-19 has disproportionately affected already marginalized Americans, Kiva has been approached with the question why it doesn’t offer personal lending options. Similarly, SoLo Funds has received requests for business lending. Honoring the other’s unique expertise, the organizations have teamed up, rather than recreating each others’ wheel.
SoLo Funds, the U.S. leader in personal, peer marketplace lending, will offer Kiva’s US product to its user-base, many of whom are entrepreneurs themselves and may be looking for business lending options.
Kiva, the global leader in crowd-fueled microfinance, will share SoLo’s loan product with its borrower community, providing them with a personal, peer marketplace lending option.
Both Kiva and SoLo Funds Solo strive to offer an affordable product with no hidden fees. SoLo Funds, a for-profit, has a fixed fee structure. Kiva, a 501c3, offers loans at 0% with no fees. As small businesses and families reel from the effects of the global pandemic, and there’s a heightened awareness of the economic disadvantages that Black communities and business owners of color face, it’s clear that there is an unprecedented need for fair and accessible credit products. It’s up to innovative financial platforms like SoLo Funds and Kiva to team up to share the financial solutions for today’s needs.
About Kiva U.S.
Started in 2011, Kiva’s U.S. program has supported over 6,200+ US borrowers with over $36M in loan capital. In the U.S. Kiva’s loans are always 0% interest and between $1,000 – $15,000. Designed to create entrance to opportunity for the most excluded entrepreneurs, Kiva serves people who need access to the first rung on the capital ladder. Since its inception, Kiva U.S.’s portfolio has proudly included 63% women entrepreneurs, 68% entrepreneurs of color and 46% borrowers with credit scores of <650, of which 60% had been rejected for other forms of financing before coming to Kiva.
About SoLo Funds
SoLo is the community bank redefined where users borrow on their own terms and lend to reap the benefits. SoLo provides the science. Launched in 2018 as a unique & proprietary lending marketplace, today SoLo is the leading alternative financial solution providing the fastest loan option to borrowers and option for lenders to obtain significant value. Backed by partners like Visa, SoLo has enabled over 200,000 transactions powered by thousands of lenders & borrowers.