Kiva Zip is an experimental site, launched by Kiva, that enables you to make direct loans to entrepreneurs in Kenya and the United States. You can make a loan today for as little as $25. Over time, as your loan is repaid, you get your money back, and you can then withdraw it, or re-lend it to another entrepreneur.
Kiva Zip is an innovation of Kiva that will test new approaches in direct person-to-person. Kiva Zip shares the same mission as Kiva.org - to connect people through lending to alleviate poverty. Kiva Zip is testing new ways of realizing this mission with the goal of microlending expanding our reach to underserved populations by using new technologies that also drive down costs to the borrower. Through the use of technology, Kiva.org was the first-ever microlending website to allow any individual, with a computer and a credit card, to lend money to a low-income entrepreneur halfway around the world.
Kiva Zip is attempting to take the use of technology to the next level, such as mobile and electronic payments that enable the direct transfer of funds between lenders and borrowers. In the Kiva.org model, these payments are managed through Kiva’s microfinance partners. Kiva Zip still partners with organizations and individuals that work closely with borrowers (these are called “trustees” in the Kiva Zip model), but in Kiva Zip trustees never handle the loan funds.
Low cost loans to borrowers is one of the main benefit of Kiva Zip being able to use new technologies to enable the direct transfer of funds. For the Kiva Zip alpha phase, Borrowers will be paying 0% interest rates. This differs from the Kiva.org model where borrowers do pay interest to the microfinance institutions in exchange for their administration of the loans, and a number of other important services that the MFI provides to borrowers (technical assistance, financial advice and training, etc.).
Another important difference is that Kiva Zip loans are expected to be even riskier than loans in the main Kiva model. Kiva.org has been operating for over 6 years now, and many of the kinks have been worked out over time. Because the Kiva Zip model is new, it is likely that there will be many learnings and changes as the alpha is launched over the next few months. For this reason, the repayment rate on Kiva Zip is expected to be significantly lower than the nearly 99% seen on Kiva.org today (as of December 2011). As due diligence methodologies are tested and fine-tuned, we are confident that repayment rates will continue to improve.
About Falling Sky Farm:
Cody's interest in farming and food culture grew organically. While in college, he spent summers working at a restaurant where he developed an interest in local food. After college, he spent two years teaching high school physics in Providence, Rhode Island. He enjoyed teaching, but missed rural Arkansas and was itching to get more connected to food. So in 2004 he moved to Searcy County, Arkansas to manage a local bakery, and was quickly reminded of the economic challenges facing rural Arkansans. Searcy County is a place of extreme natural beauty and persistent poverty. With over 20 percent of population falling below the poverty line, good jobs are hard to find.
So in 2007 he and his wife, Andrea Todt, started Falling Sky Farm, a pasture-based livestock farm with a mission of establishing a profitable demonstration farm to promote a local food system that produces delicious food and reinvigorates the local economy. In 2013 they are still working to create good jobs for their community that pay a living wage - not at the expense of the rest of the food chain but with a sustainable approach that ensures healthy land, customers, farmers, and animals.
At Falling Sky Farm they raise chickens, ducks, turkeys, pigs, cattle, and lots of beautiful green grass. Their animals are rotated regularly through lush pastures. Their cattle are 100% grass fed, and our poultry and pigs are supplemented with a custom-mixed, GMO-free grain ration. Neither their animals nor the pastures that sustains them ever consumes antibiotics, growth hormones, or synthetic pesticides or herbicides. All of the farm's products are marketed within 150 miles of the farm. Falling Sky Farm has also tapped into the shift in consumer tastes, shopping patterns, and technological advancements, creating an online farmers market that conveniently and cost-effectively connects 25 growers to more than 200 customers. This market, Conway Locally Grown, now provides customers in central Arkansas with homegrown vegetables, fruit, and other products.
This Kiva Zip loan would help Falling Sky Farm purchase a refrigerated delivery trailer and expand their farm business. They have grown substantially over the past couple of years and one of their greatest challenges at this point is getting products to market. Their main market area, central Arkansas, is a long drive from the farm and they try to keep costs down by limiting trips to once a week. A larger capacity for transporting their product has become necessary, and having a vehicle that is refrigerated that can keep the product at a proper temperature is essential. This loan would provide the much-needed funds for acquiring such a vehicle and expanding our business.