Bridging the gap created by systemic economic inequality: a 2024 report by impact measurement company 60 Decibels highlights Kiva’s impact in making finance more accessible in the U.S. The results show that Kiva U.S. is facilitating first-time access to capital and making it easier for entrepreneurs to access additional funding, as well as fostering confidence and financial stability for marginalized communities in the U.S.
At Kiva, we know that dreams are universal, but opportunity is not. This truth applies to the U.S. as well, a country which, despite being the world’s largest economy by nominal gross domestic product (GDP), coined the land of opportunity and, notoriously associated with the American Dream, is home to millions considered financially excluded. Historical as well as contemporary discriminatory practices of institutions have created longstanding structural economic inequities, which produce disparities in wealth, resources, and other outcomes. Approximately 26 million adults in the U.S. (nearly 10%) are “credit invisible”, meaning they do not have enough credit history to produce a credit score. Furthermore, 1 in 4 U.S. adults are underbanked, meaning they have limited access to financial services, and 1 in 10 are unbanked, meaning they do not have a bank account at all. When accounting solely for Black households, this number increases to 1 in 2.
We see the enormous and critical need throughout the U.S. for financial equity and inclusion in communities that have been historically and systemically marginalized, and that’s why we do what we do. With our 0%-interest, zero-fee, no-collateral, no-minimum-credit-score, socially underwritten loans, we’re not only rethinking creditworthiness, but we’re doing so in a way that intends to fill the gap created by deep-rooted economic inequality. We know that when entrepreneurs have access to the resources they need to thrive, they can pursue and achieve their business and financial goals.
And perhaps even more significant than this commitment is what we’re doing to ensure the impact of our work. We’re measuring and evaluating outcomes (i.e., the impact of the Kiva loan) and incorporating learnings and feedback from Kiva U.S. borrowers themselves — all with the goal of improving the loan lifecycle and maximizing our impact.
In 2022, the Kiva U.S. program partnered with global impact measurement company, 60 Decibels (60dB) for its first-ever independent impact assessment), and in 2024, we did it again. Close to 400 Kiva borrowers were surveyed, using a sample representative of Kiva U.S. borrowers: 71% Women, 29% Men; and 31% Black, 21% Latino/Hispanic-American, 36% White, 9% Other.
Here, we share a few key insights from the new study that illustrate Kiva’s role in expanding financial inclusion in the U.S.
Facilitating first-time access to business capital
The Kiva U.S. program is constantly testing, innovating and exploring novel ways to improve the loan product and overall borrower experience. Recent examples of such positive changes include the ability for individuals to select from 30+ languages for completing the application as well as opt in to build business credit through Kiva.
Continuous exploration and implementation of such wraparound services is fundamental to the evolution of our program, and the study aimed to measure borrowers’ sentiment around the value — and uniqueness — of a Kiva loan.
More than 2 in 3 borrowers indicate they could not easily find a good alternative to the Kiva loan.
“When we needed a loan to take our first step toward growth, Kiva was the only resource available. We are incredibly grateful for the program! We have grown from 2 part-time business owners to a company that employs 11 people!” - Kiva borrower from the 60dB report
Taking this first step toward growth can be difficult for those who are just starting their business, as potential lenders and investors are looking for a history of financial stability and success, yet startups often lack this track record. That’s where Kiva comes in. 2 in 3 borrowers indicate that they had never borrowed money for their business before receiving their Kiva loan.
When reflecting on what options were available at the time of applying for a loan, nearly 1 in 5 borrowers said they had no other financing options outside the Kiva loan, and approximately half of those who did report having other options said they would have relied on personal savings. Drawing from personal savings, however, represents a paradoxical “financing option”, as it could negatively impact individuals’ financial resilience. Others (44%) reported that they had considered using credit cards as a financing option prior to the Kiva loan.
At Kiva, we aim to provide entrepreneurs with access to the first rung in the capital ladder so that they do not need to compromise their financial health by taking on other, more expensive debt for their business.
“I’m grateful to Kiva for giving us an opportunity when traditional lending wasn’t an option. I also took out a second loan during the pandemic to cover payroll. My business has since tripled.” - Kiva borrower from the 60dB report
Kiva loans foster financial stability and boost confidence
To evaluate whether and how the Kiva loan impacted business success and specific business outcomes, borrowers were asked to respond to a number of questions that touched on topics such as revenue, growth in employee count, ability to manage finances, and more. The responses speak for themselves, underscoring both visible implications like revenue and headcount, as well as intangible ones, like confidence.
More than 4 in 5 borrowers report improved business success since receiving their Kiva loan, with close to half saying business success has very much improved. In a related open-ended question, borrowers reported the following as the top business success outcomes they have seen: business growth and expansion (17%), equipment and inventory purchase (15%), and increase in revenue (12%).
“When I first took out a Kiva loan, I was just starting with pop-up shops. Now, I’m officially opening my first brick-and-mortar storefront.” - Kiva borrower from the 60dB report
Nearly 2 in 3 borrowers have seen increased revenue since receiving the Kiva loan, and more than half of those borrowers indicate their revenue has increased by 75% or more.
3 in 5 borrowers feel that Kiva is enhancing their chances of achieving their primary business goals. Primary business goals reported by borrowers include: increasing revenue and profitability (37%); securing additional financing (14%); expanding customer base (13%); and business expansion (12%).
4 in 5 borrowers reported an improvement in their business confidence as a result of going through the Kiva process. Borrowers frequently mention the unique Kiva crowdfunding process as one that instills both momentum and a sense of community.
Akirah and Mancoba of Ubuntu Permaculture Mission
“We were so delightfully surprised with how seamless the process was, and it was very cool to see how there were people [lending] from all over the world. We were like, ‘Oh wow, this person from this country and this country [lent] – they believe in us!’” – Co-founder of Ubuntu Permaculture Mission and Kiva borrower, Akirah
Nearly 2 in 3 borrowers have improved their ability to manage finances thanks to the Kiva loan. Co-founder of 2 Girls with Curls and Kiva borrower, Leigh-Ann, reflects on how the Kiva loan prompted her and her co-founder to make fundamental changes which would benefit their business for years to come:
“Getting this loan was the start of us realizing: we need to get an accountant, we need to have processes in place. It was the kickoff for us to really feel like we didn’t have the imposter syndrome of running a business, but rather that we were truly running this business. I think it gave us the motivation and the confidence to get ourselves organized and start functioning like a normal and good-functioning business.” - Leigh-Ann, Co-founder of 2 Girls with Curls
Erin & Leigh-Ann, Co-founders of 2 Girls with Curls
Many of these outcomes go hand-in-hand, complementing or building on one another in a virtuous cycle. Increased confidence, for example, can lead to better chances of achieving business goals, and the achievement of those goals can increase confidence. Similarly, if an entrepreneur has gotten better at managing their finances thanks to the Kiva process, perhaps they will have more resources to dedicate to pursuing business goals, which in turn generates more confidence.
To measure the additionality of the Kiva loan (i.e., positive impact that would not have occurred without it), borrowers were asked to reflect on what would have happened if their business had not received the Kiva loan. More than 1 in 4 believe their business would have closed temporarily or permanently without the support of a Kiva loan.
The Kiva loan represents the type of capital these borrowers need, when they need it. Reflecting on what would have happened to their business had they not received the Kiva loan, nearly 1 in 2 borrowers said they would have faced personal hardships.
“The loan was necessary to get started. If I hadn’t gotten this loan, I would have had to secure seed money under less favorable terms, try to start my business without a safety net if I wasn’t immediately making enough to cover my overhead and living expenses, or stay in my old job that was causing overuse injuries while trying to cultivate clients on the side.” - Kiva borrower cited in the 60dB study
Kiva loans facilitate access to additional financing
The Kiva loan might be just what an entrepreneur needs to get their business off the ground or to fuel growth and productivity, and after that investment and return, they’re ready to access more capital elsewhere. The 60 Decibels study highlighted that Kiva improves borrowers’ abilities to secure additional financing from other funders after receiving their Kiva loan: 2 in 5 borrowers reported having applied for more financing, and 4 in 5 of those borrowers ended up securing this additional capital.
Among those who secured additional financing, 1 in 2 agree that Kiva played a role in helping them to obtain it, citing factors such as the ability to build their business credit history, increased knowledge in applying for business financing, having initial funding to prove business viability, and enhancing visibility and connections with other lenders.
“I believe it helped to establish a payment history. Since we were a new business, it was difficult to secure a loan when we first started. Having these payments recorded every month helped our lenders gain confidence in us.” - Kiva borrower cited in the 60dB study
2 in 3 borrowers indicate their business will require additional capital in the next 12 months, a stat which not only underlines the fact that these microloans might not always be sufficient for a business’s needs, but also aligns with the reality of small business owners in the U.S.: half of all small businesses hold a cash buffer of less than one month.
Some borrowers reported that the Kiva loan for which they qualified was too small, prompting them to apply for additional funds elsewhere to bridge the gap. Still, many are motivated to fully repay their Kiva loan as soon as possible so that they may be eligible for a larger loan – repeat Kiva borrowers automatically pre-qualify for a loan that is twice the size of their previous one (maximum loan size: $15,000). 3 in 4 borrowers expressed interest in applying for another Kiva loan, which reflects the client experience outcomes of the study: Kiva has a Net Promoter Score (NPS) of 82, significantly higher than the CDFI benchmark of 71.
An NPS measures whether a person would recommend their experience to others, and is used to understand the level and drivers of customer satisfaction and loyalty. Kiva borrowers emphasized the interest-free nature of the loan as well as the ease of application and community support. They also voiced suggestions for program improvements, with a key focus on the repayment process and more flexibility with terms and timing, as well as demand for additional marketing and accounting wraparound services, ideally in a one-on-one setting.
The Kiva team is already working on making the repayment process more flexible to cater to borrowers’ unique needs, as well as strategizing on how to connect more borrowers with national technical assistance partners as well as impact-driven Hub partners in our network.
Maria, a Kiva borrower took a loan through Kiva Hub Growth Partners Arizona
Purpose-driven partnerships and looking ahead
At Kiva U.S., we remain committed to supporting underserved and underestimated entrepreneurs in ways that go beyond the loan and increase their overall financial health. As we continue working to fill the gap created by systemic economic inequality and provide entrepreneurs with access to the financial resources they need to thrive, we will incorporate this study’s insights and other learnings into our strategy.
This work would not be possible without partnerships with mission-aligned organizations. We would like to express our deep appreciation for our Kiva Hub partners – local organizations nationwide who support small businesses and foster economic development and financial inclusion in their communities. The disaggregation of borrower insights (Hub borrowers v. Non-Hub borrowers) in the study highlights just how impactful and vital to our mission our approximately 40 Hub partners are to the success of Kiva U.S. Borrowers who take their loan through a Kiva Hub are more likely to say that their business revenue very much increased, that their ability to manage their finances very much improved, and that they were able to retain or hire additional employees as a result of their loan.
We are also deeply grateful for partnerships such as this one with 60dB which enable us to hear directly from those whose opinions and aspirations are central, while also helping us identify where and how we can scale our impact. After all, with only 13 years into the U.S. program and $73M in microloan disbursements, we’re just getting started.
We would like to extend our gratitude once more to the 60dB team for their expertise, collaboration and insights on impact data that matter. Read the full 60dB report here.
