When Tracy Carter was a member of corporate America, she daydreamed in her office about opening up her own hair salon.
She knew she was serious about her aspirations, but didn’t have the finances to jump start them.
Rather than going to a bank for a loan, Carter found help from 95 donors on Kiva.org, a crowdfunding initiative that enables anyone in the world to lend money to small businesses.
Now, $5,000 later, Carter owns Shear Talent in Bethel Park.
“For me, it was such an emotional journey to think that there were 95 people all over the world that believed in enough of my idea to invest in me,” Carter said.
With Kiva City Pittsburgh, a new initiative launched by the nonprofit organization Thursday, people anywhere can help small businesses in Pittsburgh get off the ground.
Kiva gives aspiring entrepreneurs the opportunity to obtain loans with 0 percent interest. Lenders have the option to loan $25 or more.
Kiva President and co-founder Premal Shah said over the last 12 months the repayment rate has risen to 95 percent.
“This is a really important system, a trust-based system, that we want to help establish right here in Pittsburgh,” Shah said. “And we think that over time it will help surface entrepreneurs who are really great bets, and the people making these bets are every day people like you and me.”
Kiva City Pittsburgh is a coalition of several nonprofits, businesses and foundations.
More than 1 million lenders worldwide have contributed $500 million in microloans to more than 1 million people in 70 countries.
In Pennsylvania, 29 entrepreneurs have had their loans crowdfunded by 1,700 people from 47 states and 41 countries.
Shah said he believes Kiva will change the small business landscape in Pittsburgh.
“We hope that we make not only small businesses more successful, but communities right here in Pittsburgh tighter nit, more commerce that’s happening locally and that Pittsburgh becomes a model for other cities here in the U.S. and frankly around the world,” Shah said.
The benefits of Kiva extend far beyond the original loans, according to Shah. The lenders stay interested in the small businesses they support, and can be “potential brand advocates.”
“There’s something around confidence that happens, and how knowing that someone believes in you,” Shah said.