Q&A with Lily Vail: Kiva expanding access to funding for entrepreneurs
Lily Vail leads the Kiva lending program in Columbus. The online platform allows small-business owners to access zero interest,
crowdfunded loans that range from a few hundred dollars up to $10,000.
In 2005, Kiva started as a platform to connect borrowers and lenders abroad. In the United States, it operates as a direct lending
platform to business owners for terms up to three years. In Columbus, community leader Reese Neader decided that Columbus needed a low-cost source of capital for young entrepreneurs who were not able to access traditional sources of capital. He assembled a coalition of organizations, institutions and community members to launch Kiva Columbus in July 2016, to increase accessibility of resources for small-business owners. His untimely illness and death shortly after the launch was a blow to the program.
Local funders again came together to bring Lily Vail to Columbus in January 2017, to ensure Neader’s vision would be realized. We
talked with Vail about her vision for Kiva Columbus and how social entrepreneurs can take advantage of Kiva to grow their businesses. A version of this Q&A first appeared in Columbus Business First on July 26, 2018.
What prepared you to lead the Kiva Columbus program?
I received my degree from Long Island University’s Global program, which exposed me to community needs in seven countries in addition to the U.S. Upon graduation I worked in Brazil with community farm and business owners. These experiences made me aware of the importance of community-based development and the enormous value of micro-lending. I joined Kiva U.S. in summer 2016 which showed me how powerful the Kiva model of micro-lending could be in our country. When Columbus leaders asked Kiva for help to sustain the Columbus program after Reese Neader’s death, I was eager to put my knowledge to work
in a community.
What is your goal for Kiva Columbus?
Columbus organizations, institutions and community members are working to increase accessibility of resources for small-business owners who would otherwise be excluded from financing. Columbus still is challenged with a large number of emerging businesses that cannot access loans in their early years. Kiva’s long-term vision is to create a cohesive, inclusive financial ecosystem in which Kiva Columbus is an important entry point. Having a local effort gives Kiva a more effective way to become integrated into a network of relationships that support businesses as they mature into eligibility for more complex forms of financing. Currently we coordinate with the Ohio Small Business Development Center, Increase CDC, ECDI, IFF, and SocialVentures among others.
How do you see Kiva Columbus fitting into the local funding stream?
We see ourselves as one of the first options for business owners to access finance since we will consider lending to anyone who is
over the age of 18, has a legal business registered in the U.S., and is not currently in bankruptcy. Kiva is a great place for a business to build experience in dealing with lenders so it can more ably talk with other lenders. We look to create a strong referral process to hand off a business as it graduates to eligibility for its next lender. For example, this process could first refer a new business to start with a Kiva loan, then seek financing from Social Ventures Fund, then move up to larger loans from ECDI, IFF, or Finance Fund and eventually borrow from local Small Business Administration lenders such as Heartland Bank and Huntington Bank.
What lending activity has Kiva Columbus achieved so far?
Since launch in July 2016, Kiva Columbus has made 90 loans totaling $465,000. Of that, two loans have been repaid and two businesses have repaid and re-borrowed through a second loan. Loans are used for a variety of purposes. For example, Aunt Flow borrowed and quickly repaid in order to establish a credit record. Too Good Eats borrowed to acquire supplies and to qualify for an ECDI loan.
How can a social entrepreneur apply for a Kiva loan?
They can contact me or, if they are already listed in the SocialVentures Marketplace, I recommend they contact SocialVentures. SocialVentures is leveraging Kiva Columbus to contribute to its mission of supporting the social enterprise community as a Kiva trustee. A Kiva trustee is an organization that publicly vouches on behalf of the Kiva applicant’s character and the viability of their business. A Kiva trustee benefits Kiva applicants by strengthening their applications during underwriting and by leveraging the trustee’s social capital to facilitate the fundraising process.