Microlenders targets us entrepreneurs

FOR LOANS

Microfinance is a big focus in the international development world. It's the process of getting small loans and financial services to the poor and underserved. There are a number of Web sites that help individual Internet users fund entrepreneurs from Kenya to Cambodia. Now, one of the biggest, Kiva.org, is allowing users to make microloans to small business owners, like Vika Sinipata, in the United States.

An Idea for a Business is not Enough

In January, the human resources professional fulfilled a longtime dream. She opened her own business, assisting the elderly. She got the idea for it after taking care of her own relatives. What she couldn't get was a line of credit. "I've tried the route through the bank," she says, "and they want two years of experience, and especially for myself, I didn't really have much foundation in the way of experience other than my MBA and my background in sales, and it wasn't enough." So Sinipata used her savings of $5,000 to launch her business “Island You a Hand”. In March, she realized that she needed another $10,000 for a license from the state and more marketing materials. And that's how she became part of an experiment on the microlending Web site Kiva.org.

New Businesses in United States Need Capital

Kiva is a non-profit organization that allows individuals to lend to entrepreneurs around the world in $25 increments. Until today, all of its borrowers were in developing countries. Its president, Premal Shah, explains, "The economy and the credit crisis was a big motivator for Kiva looking at the United States and realizing that, wow, there is quite a need for capital, domestically." He says microloans can help someone in New York who wants to start a salon or someone in California who might want to start a day care center. Microcredit has been available in the United States for two decades, but it gets less attention here than in the rest of the world.

The average loan to an entrepreneur in the United States is $7,000, compared to a few hundred abroad. Gender, location affect who gets loans Shah says relative need may be perceived differently, too. "I really don't know if people are going to say, 'Hey, my $25 goes farther in southern Sudan or Cambodia than in Queens, New York.' It will be really interesting to watch." Shah says Kiva users do show strong preferences, and funding rates vary depending on the borrower's gender and geography. "For example, a Kenyan woman farmer gets funded 10.2 times faster than a male Bulgarian taxi driver." To test the waters, Shah invited two U.S. microfinance institutions - ACCION USA and Opportunity Fund - to include their entrepreneurs' profiles on Kiva's Web site. Vika Sinipata's business proposal was posted by Opportunity Fund. Its CEO, Eric Weaver, says after the U.S. credit markets stopped lending so freely, his company has seen more interest in microloans. "We're seeing more people come to us who previously were bankable, [but] they had their line of credit frozen, or their term loan was not renewed. They weren't able to increase the credit they're getting from the bank."

(Based on: media records)

 

ACTIVE VOCABULARY

affiliate   Articles of Association (Charter, Constitution, regulations) bond   borrower Certificates Of Deposit (CD)   certificate of indebtedness   commercial (mercantile) paper   credit market credit union   debt capital equity (share or stock) capital fiscal year general meeting of the company human resources professional including, but not limited to interest payments line of credit legal assignee marketable (meaning) securities maturity date   shareholder (stockholder) to launch (start) the business to test the waters treasure bill unsecured loan

аффиллиированное лицо (держатель контрольного пакета акций) устав предприятия (компании)     облигация (долговая расписка, выдаваемая заемщиком кредитору. Облигации обычно выпускаются государством, местными органами власти или компаниями в форме ценных бумаг с фиксированной процентной ставкой.) заемщик; берущий взаймы депозитные сертификаты; свободно обращающиеся депозитные сертификаты краткосрочный вексель (необеспеченный); долговой сертификат векселя, документы краткосрочного коммерческого кредита; оборотные кредитно-денежные документы, деловые бумаги кредитный рынок кредитный союз, предоставляющий кредит своим членам; кредитный союз (Великобритания) привлеченный капитал капитал в форме акций; собственный (уставный) капитал финансовый год общее собрание акционеров (участников) общества (компании) специалист по кадрам включая, но не ограничиваясь только этим платежи процентов кредитный лимит (кредитная линия) юридический правопреемник легко реализуемые ценные бумаги   срок погашения (дата, когда эмитент обязуется выкупить свои долговые обязательства по номинальной цене) акционер начать дело (открыть бизнес) разведывать обстановку; «прощупывать почву» казначейский вексель, выпускаемый Банком Англии (Американским министерством финансов) от имени государства, который погашается через три месяца. Он не приносит процентов, а доход по нему образуется за счет разницы между ценой его покупки и стоимостью погашения необеспеченный заем (ссуда)

IV. Translate the following contract text from Russian into English and be ready for its discussion on the basis of active vocabulary, key terms quiz, review and discussion questions.