Yeshiyah of YBI African Apparel, past Kiva Baltimore Borrower
By Kaetlyn Bernal, Kiva Baltimore Manager
What if we looked at creditworthiness differently?
“A nearly perfect credit score is basically mandatory for the most advantageous bank loans, even though there are numerous plausible explanations as to why an otherwise responsible and dedicated business owner would have poor or very little credit history.” Jared Weitz, “Why Minorites Have So Much Trouble Accessing Small Business Loans” — Forbes
Kiva borrowers, community, and Baltimore Corps staff talk during the Kiva Baltimore Happy Hour event.
The culture of finance can perpetuate racist, sexist, and classist norms in lending — designed, embedded, and upheld by our existing society. Our economic system is supposedly designed to build wealth for individuals, allowing us to live out “The American Dream.” We know, however, that this dream was created with only some in mind, and did not extend to Black-owned, Women-owned, and other minority owned businesses..
“Racial bias in financial access is not a thing of the past. Institutional discrimination and segregation have wide-ranging social impact. Discriminatory lending practices, such as redlining, systematically denied credit access in many minority communities. The effects of these practices have continued to negatively impact the ability of these communities to build wealth for generations. Minority and female business owners consistently face both higher rates of denial and higher credit costs when seeking access to credit.” according to the National Community Reinvestment Coalition
Inequities in lending practices, which can be historically traced, at the institutional level have slowed much of our economic growth as a city.
It’s time for the residents of Baltimore to take control of small business development in our community, by using the power of people to build economic sustainability. We first need a better understanding of the current financing system in Baltimore, and how money flows through our local business community.
The team of FullBlast S.T.E.A.M., past Kiva Baltimore Borrowers
“The top depository banks are doing significantly less small business lending in Baltimore today than 10 years ago,” according to Financing Baltimore’s Growth: Strengthening Lending to Small businesses — a report created by the 21st Century Cities Initiative at Johns Hopkins University. “If these banks had maintained the same small business lending ratio to deposits, an additional $400 million would be available today. We would encourage the large banks that populate Baltimore’s landscape to devote more resources to small business lending…In our 2017 report, “Financing Baltimore’s Growth,” we discussed the leverage that could be attained by using the small amounts of public dollars involved in direct lending to instead leverage more private sector loans. This could be particularly valuable to new businesses without a credit history and a higher risk profile.”
You could impact your community by investing as little as $25.
Kaetlyn Bernal, Kiva Baltimore Manager, at their new office in BMore CoLab
Kiva, an international nonprofit based in San Francisco, was established in 2005 as the world’s first crowdfunding platform for small businesses to access funding they could not receive through a traditional lenders. In 2011, after seeing the level of impact Kiva had internationally, Kiva began offering loans for entrepreneurs in the U.S. by combining the power of human and financial capital.
In 2018 Baltimore Corps became the operating partner of Kiva Baltimore, to provide deeper support to entrepreneurs in our city. Through interest-free, crowd-funded loans, we are changing the culture of finance and combating discriminatory norms in lending. We work on an individual basis with every entrepreneur through the entire Kiva loan process, making sure that they are well positioned to successfully access - and repay - the loan. We connect them with free resources through our Trustees, and prepare them to continue moving across the funding spectrum to access larger amounts of capital.
Sometimes larger amounts of capital means going to a bank — but that doesn’t have to be a bad experience! Having a trusted business banker that entrepreneurs can build a relationship with over time can significantly impact their access to funding. As a part of Kiva Baltimore’s work, we take time to build relationships with value-aligned business bankers so we can connect our entrepreneurs with lenders committed to equity.
Baltimore Corps team in Kiva Baltimore’s new office at BMore CoLab. (l-r) Jennifer, Fagan, Kaetlyn and Tamara.
Kiva Baltimore is more than just a loan program — our team works endlessly to ensure that we are approaching the entrepreneurial ecosystem in Baltimore with collaboration at the forefront. Our partners help us offer holistic development opportunities to budding entrepreneurs, and create a network of support specific to their needs. Too often, entrepreneurial support organizations (ESO’s) are forced to compete for limited resources (ahem, funding) and are unable or unwilling to prioritize collaboration — which impacts the services they offer.
Baltimore Corps team and board members along with T. Rowe Price Foundation President and Vice President during the opening of BMore CoLab.
Collaboration is important to us, that is why we are excited to enter into our newest partnership at the BMore CoLab — a space donated by the T. Rowe Price Foundation. Kiva Baltimore will be sharing BMore CoLab with CASH Campaign of Maryland, Mission Launch, and Innovation Works. Each partner is bringing diverse expertise to the table, and together we will streamline referrals and support for entrepreneurs to access various resources, all in one space!
In aligning ourselves with organizations committed to collaboration, we will present more opportunities for local businesses to continue growing despite their location, race, socio-economic status, or gender. These impactful services will continue to build businesses and drive our local economy upward.
Learn more about the Kiva process at Baltimorecorps.org/kiva