- Jonny, Lender
I’ve been leading the Kiva U.S. team since we launched it, as Kiva Zip, back in 2011. And in a wonderful, meandering way, the story of the Kiva U.S. program has been inextricably intertwined with the story of my friend Victor.
Victor and I met back in November, 2011. We were introduced by his Trustee Mission Economic Development Agency (MEDA), a technical assistance provider based in the Mission, working to support Latino families through community and economic development, and one of the very first Kiva Zip “Trustees”.
Victor is one of the most entrepreneurial people I have ever met – despite (or perhaps because of?) his humble background. In his own words, from his first loan profile:
“I was born in a very poor and numerous family in Cordoba, Mexico, and was forced to start working at the age of 9 to help provide for the family. I had to abandon school to emigrate from my home town to Mexico City, where I thought I would find better employment and more money for my family; but with my low level of education my options were limited.
In my continuous quest of a better life I moved to North Carolina in 2001, working in whatever type of job came in hand. I remember the first time I got paid $120, it seemed like an immense fortune to me. I had never had so much money in my life.
Luckily ten years ago someone introduced me to a Coffee Shop owner through my church; at this place I finally found a good place to be for many years. This job gave me the opportunity of a consistent and reliable income and the opportunity to learn, develop my knowledge of the business, and strengthen my love for coffee, which it will always hold a very special place in my heart since my home town Cordoba is a rich coffee growing area.”
MEDA were helping Victor to pursue his American dream, and open up a coffee shop “Cafeto” in the Outer Mission. Over the years, Victor had been steadily saving up his own money, but, as with many small business owners, he needed a little bit of extra capital to finish construction and decoration, and open his doors.
That’s where Kiva came in.
When every other conventional lender in town said “no” to Victor, 67 individual people stood up and said “yes”. I was one of them. So was my wife Ali. Kiva’s then-CEO Matt Flannery was one of them, and Kiva’s President Premal Shah. My friends Caitlyn, Alec, Blake, and Dan funded the loan, as did my colleagues Cailin, Lisa, Harry and Sam. This is the truest vision of Kiva. That when conventional financial institutions step back, based on black-and-white underwriting criteria, and a desire to minimize risk and maximize profit, a community of supporters steps up to democratically empower an entrepreneur like Victor.
So Victor gets the $5,000 loan, on December 21, 2011 – an early Christmas present. But he gets more than the money. He gets 67 emails saying, “Jonny believes in you”, “Ali believes in you”, “Matt believes in you”, “Premal believes in you”. He gets encouraging comments on his Kiva loan page from lenders like Tim:
And he gets positive Yelp reviews from lenders like Heidi:
I’ve met hundreds of small business owners throughout America over the last few years. And it’s a hard, and often thankless, job. I’ve seen entrepreneurs struggle with the emotional burden of running their own business – with the loneliness of it –, as well as with the financial challenges. And so it’s been wonderful to witness the psychological encouragement that borrowers like Victor get from receiving messages of affirmation and support like these from Tim and Heidi.
And so Victor pays back his loan. Exactly $5,000. With no interest or fees. On November 27, 2012.
As I mentioned, Victor is an incredibly entrepreneurial guy, so by that time he was opening a second coffee shop, this time in the Outer Sunset. This time he borrowed $10,000 on Kiva, from 129 lenders – this time from all around the world. My friends Jessie and Marcus and Kiran were lenders this time. Plus my mum and dad in Oxford, and my sister in Abu Dhabi. My friend Evan in Pittsburgh was a lender and my friend Bob Harris, who literally wrote the book on Kiva.
While he’s funding for that second loan, Victor finds himself center-stage in a story by Visión Hispana. His quote in the article is perfect:
“Thanks to Kiva and many other friends that lend a helping hand when I needed it the most, I was able to open my business,” wrote Caicero, who opened his first café with a Kiva loan and is now accepting loans for his second cafe. “This is a life's dream, I feel so empowered now to continue growing my business and providing a better life for my family.”
One day Victor calls me up and says, “Hey Jonny! This Kiva loan has been extremely helpful for me – I think you guys are great! But I have a friend who also needs a loan – can you help him?” So I go to meet Victor’s friend Ernesto. And then his friend Rocio. And then Rixi, and Olinda and Omar. And just as MEDA acted as a Trustee for Victor, so Victor becomes a Trustee for these other Latino entrepreneurs. So far, Victor has endorsed six other small businesses for loans, injecting $31,000 of 0% interest capital into his community, with a 100% repayment rate.
But then the story gets even better. Because a year or two later, I get an email in my inbox from Opportunity Fund, a leading microfinance institution in California. They’re highlighting a client success story…and it’s Victor! He is now opening a third coffee shop in South San Francisco, called Antigua, and he accessed a loan from Opportunity Fund to make that happen. And this is part of Kiva’s vision too – that through our generous community of lenders, we expand access to capital for small business owners that are outside of the financial mainstream, and then we graduate these entrepreneurs to larger, more conventional sources of capital over time.
Then a couple of months ago, I got drinks with Victor to catch up. He told me that he was awarded the Emerging Business of the Year by the South San Francisco Chamber of Commerce. And I’m not even surprised. But then when I say, “Hey Victor, you’re now paying off your second loan with us. If you want a third one, we could help you out?”, he does surprise me. Because he says, typically humbly, “Well thanks Jonny, but I think it’s OK this time. Right now I am trying to open up a coffee roastery, so I can roast my own beans, and so I am looking for a loan of $1.5 million!”
At the Kiva Oakland launch in March, I see Victor and Mark Quinn, the head of the San Francisco Small Business Administration. So I connect them, and Mark starts giving Victor advice about which SBA lenders might be able to help him out. Social capital. When I think of the jobs that Victor’s now four coffee shops and this roastery are creating in the Hispanic community of San Francisco and South San Francisco, it makes me very happy to have played a very small part in getting the ball of Victor’s American dream rolling.
But none of this is even the best part. The best part is this:
When I met with Victor for drinks, I told him that I was going to be visiting Mexico City in a few weeks’ time, and he asked me if I could do him a favor. He gave me a camera and asked me to give it to his daughter on my trip. So I met up with her in my hotel in Mexico City and gave her the camera. I sent Victor the picture below (and please note the Indosole flip flops, made by my friend and Kiva Zip borrower Kyle), and he texted back, “Gracias Jonny, I haven’t seen her for 7 or 8 years”.
Kiva’s story is about expanding economic opportunities for small businesses that are too new or “too risky” to qualify for conventional loans. It’s about the democratization of access to capital – putting the underwriting decision making in the hands of a community of 67 or 129 people who are more concerned about having a lasting, positive impact in their community than making a quick buck.
It’s about those lenders becoming customers of the coffee shop they lend to, or writing a positive Yelp review. It’s about borrowers paying it forward – by empowering other small business owners in their community as Trustees or making loans to other borrowers on Kiva. It’s about the graduation of our borrowers into the financial mainstream; huge multi-million, acorn-to-oak-tree success stories; our borrowers getting fêted in the media and winning awards; and truly new job creation among the ethnic minority population of my home town.
But perhaps above all, it’s giving a camera to Victor’s daughter in Mexico City. It’s social capital, as well as financial capital. It’s re-imagining a financial system that’s based on human connections, not on financial transactions; on people, not on profit. That’s the financial revolution that we dream of. And the Kiva story. And my story. And the Victor story.
Kiva U.S. Stories is a space to share and enjoy the moving, the funny, the inspiring, stories that come from every corner of the Kiva U.S. community.
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