Open Forum: Microlending comes to the Bay Area

By Eric Weaver

Most people think of microfinance as lending small amounts of money to a goat herder in Uganda or a seamstress in Bangladesh. But microfinance, the practice of making small short-term loans to hardworking people who cannot access traditional bank loans, is no longer an economic strategy just for the developing world. Today, when anyone logs onto the global microlending portal Kiva.org, they will see, alongside profiles of fisherwomen in Cambodia, the story of a window-washer in San Jose. Lenders will be able to invest as little as $25 or as much as $10,000 to help these businesses grow.

Now, through Kiva, anyone anywhere in the world can lend a helping hand to entrepreneurs in the Bay Area, have that helping hand repaid, and support the recovery of Bay Area communities.

Microfinance works because my organization, Opportunity Fund, and other nonprofit community lenders that manage these small loans want success for the small businesses we help, not to make a quick buck on risky loans. We don't just lend money; we offer business and financial coaching. Opportunity Fund clients boast a business survival rate of 85 percent, compared to the national small business survival rate of 44 percent.

True economic recovery must include supporting small business. In California, the smallest businesses -- those with 20 employees or fewer -- are the only businesses generating new jobs. We're doing our part to meet this need by taking prudent risks on hard-working people who deserve a chance. And now, with Kiva as a partner, you can too.

Eric Weaver is the founder and CEO of Opportunity Fund, based in San Jose.