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Learning to Love Lending in the U.S.

This post was contributed by Keiley Gaston, a Kiva lender and intern at Kiva Field Partner Accion East.

I carefully choose the filters for the Kiva loan I am about to make: Female, check. Underfunded areas, start-ups, green, vulnerable groups. Check, check, check, check. Groups or individuals? I’ll check both. I scroll through the hundreds of matched borrowers Kiva presents to me. I am drawn to those who seem innovative, hardworking, and have children they are trying to send to school. When three friends and I started a microfinance club in our town in 2010, we made a commitment to women, children, and furthering education; we rarely stray from it.
I quickly scroll past a borrower from the United States. We’d discussed this as well and decided that women in developing countries will see the greatest benefits from a loan and their life will be transformed considerably more than someone living in the much wealthier United States. How was it possible that someone in the United States couldn’t access capital? 
When I began interning at Accion East this summer, I was excited about an opportunity to learn more about microfinance. After 4 years managing the Kiva loans in our club, I wanted to see everything that actually goes into making a microloan happen. I believed thoroughly in the power of microloans and was inspired by the 200 women across the world we had already helped. Although Accion East focused on lending in the United States, not internationally, the internship seemed like the perfect opportunity for me. I entered with a somewhat skeptical, but open, mind about domestic microloans. 
By the end of my first day, my skepticism was already disappearing.
I was given an annual report, client stories and recent studies to look over. I found the impact numbers staggering: in 2014 alone, Accion lent $8.3 million and helped create and sustain over 5,000 jobs. But the stories of their borrowers had the most influence on me.

I learned first-hand about passionate small business owners facing many different barriers to accessing capital. These barriers include little to no credit history, informal financial documentation and small capital needs. I read about individuals like Gilsolon, a Brazilian entrepreneur who received his first business loan in the United States from Accion and began building his credit. After a year, he received a larger loan and has grown his cleaning business, hiring 3 additional employees.
Furthermore, large banks cannot loan to businesses without formalized accounting and business plans. Without proper financial education, many small business owners struggle to access this traditional financing. In addition, some industries are considered too risky for many traditional financial institutions. I learned about the difficulty food and beverage business owners face because of their industry.
Despite these challenges, I saw that business owners found ways to improve their situations by taking advantage of every opportunity presented to them in an incredibly gracious and determined manner. Soon enough, I had the opportunity to write client stories for Accion and relay to interested individuals how hardworking and deserving these small business owners are. I even got to be on the other side of Kiva, posting client descriptions myself.

I only grew further impressed when I began to interview borrowers. These entrepreneurs worked endless hours to accomplish their goals and overcome obstacles to financial access. One spent up to 22 hours a day in her shop during the first 2 years in order to make sure all the bakery and catering demands were met on time. She spent countless hours with an Accion loan consultant to work on improving her credit and formalizing business records in order to qualify for a loan. Despite all-consuming work and countless barriers, their eyes would light up when talking about their business. Not only were they hard-working, but they wanted to give back to their communities. One business owner I met was planning to use her future profits to start a scholarship foundation for students interested in science and technology.
My narrow perspective at the beginning of my internship has been transformed considerably. The enormous need for capital and financial education for small business owners in the United States quickly became clear, but I soon found that one of the most important aspects of a microloan in the U.S. is the skillset and confidence boost it gives to entrepreneurs. They have amazing ideas and dedication, but their businesses can have trouble coming to fruition without constructive assistance.
Although clients used their loans for different purposes, it was clear that they most appreciated the support, faith, and the feeling that someone out there finally listened to them and understood the assistance they needed in order to access capital and grow their business. Now, when I make my next Kiva loan, I pledge to support a hardworking entrepreneur in the United States.

About the author

Carlos Pierre

Carlos is a Manager for Kiva's Strategic Initiatives. He is helping push the Kiva's model to go beyond micro-finance institutions to work with universities, agricultural coops, solar power distributors, fair trade companies and other types of social enterprises that can benefit from the use of credit. He covers all the regions except Africa. Born and raised among the blatant inequalities of Mexico City, Carlos graduated from Brown University with a degree focus on development. He has studied in China, Mexico and Japan. For eight years he worked in Tokyo, London and New York as derivatives trader specializing in Emerging Markets at Deutsche Bank and Citi. Carlos also worked as a Kiva Fellow in El Salvador. He is determined to push social change via market mechanisms and wants to help bridge the financing gaps faced by social enterprises.