Crowdfunding Microloan Web Site Spotlights Philadelphia's Small Businesses
By Steve Tawa
PHILADELPHIA (CBS) -- A new initiative in Philadelphia brings small business owners and aspiring entrepreneurs much-needed capital, to help them stay afloat, expand, and grow.
The partnership between web site Kiva.org and the city's Department of Commerce brings "crowdfunded microloans," most of which are about $5,000 and are offered at zero-percent interest, with no fees, according to Premal Shah, president of Kiva.
"We're a web site that connects people through lending to create more opportunity in local communities like Philadelphia," he said today.
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Carl Lewis, chef and owner of 48th Street Grille, near Spruce Street in West Philly, says he was grateful for the loan he received.
"This neighborhood is going to be a viable neighborhood where people are going to want to come and open up business and shop," he noted today.
So far, 14 businesses have been funded in Philadelphia by a total of 1,700 people around the world.
Shah says there will be a multiplier effect.
"As they repay the loans, it's going to get money off the sidelines from the public banks, because this is like a public credit score," he explains.
Shah says most local banks are reluctant to make loans under $100,000, and that's why crowdfunded microloans fill a critical lending gap.
He says in philanthropy, givers often don't know where their money is going or the impact of their donation. He says through Kiva, which has a 90-percent repayment rate, lenders see where the money goes and know they are part of a platform for social good.
Shah, who was part of a group that worked out PayPal, was also involved in the early stages of YouTube, Yelp, and LinkedIn.
