Cooperatives on Kiva Zip
At Kiva Zip, our mission is to provide access to capital to small businesses that have been excluded from the traditional banking system. These small businesses come in many different forms and structures, but they still need our support just the same. This is why we’re excited to be piloting loans to cooperative businesses.
A cooperative is an enterprise that is jointly owned by its employees. In this structure, profits and benefits are equally distributed to members, and business decisions are made democratically. Historically, this business model has acted as a communal solution for economic and social hardships. During the Industrial Revolution, artisans created cooperatives to share working space in the shadows of big textile companies. During the Great Depression, farmers created cooperatives to buy and share farming equipment. Today in America, local businesses face similar hurdles with the rise of large corporations. But through collaboration, cooperatives continue to ensure financial security for micro-entrepreneurs.
While there are inherent risks with funding cooperative businesses, we’re implementing strong due diligence during the application review process. Just like any other borrower, we investigate their business structure, inspect their communal impact, and evaluate their alignment with Kiva Zip values before approving their loans.
Once on the site, cooperative borrowers will appear individually much like any other loan - only with a small note indicating that they are a part of a cooperative. Like any other loan, each loan will be distributed separately and the individual borrower will be responsible for the repayments.
The cooperative business structure aligns with Kiva Zip’s beliefs on equitable distribution of community capital – and we are excited to see what impacts will come.