Title
Phoenix Kiva Hub and Better Business Bureau Serving the Pacific Southwest Premiere Partnership Sponsorship Contract
Description
Request the Economic Development and Housing Subcommittee recommend City Council approval to enter into a three-year contract as a Premiere Partnership sponsor of the Phoenix Kiva Hub administered by the Better Business Bureau Serving the Pacific Southwest (BBB) for a three year total amount not to exceed $100,000. Funding is available in the Community and Economic Development Department's budget.
THIS ITEM IS FOR CONSENT ACTION.
Report
Summary
Kiva Inc. launched in 2005 as the world's first personal lending website. Because of Kiva, the need for small businesses and entrepreneurs to have affordable and equitable access to financial products and services that help them chase their dreams became an achievable reality. Kiva allows everyday people to pool lending contributions in as little as $25 increments to provide financial access to entrepreneurs in communities that are underserved and underrepresented within traditional lending spaces. This is done through crowdfunded micro-loans from $1,000 to $15,000 for start-ups and entrepreneurs with a zero percent interest rate and a guaranteed $0 in fees. There are no minimum credit or cash flow document requirements to qualify, which further helps remove a barrier to entry that limits affordable and equitable financial access.
In 2021, with the financial support of the City of Phoenix and GoDaddy.com, the BBB launched the Phoenix Kiva Hub and began crowdfunding microloans focused on women and minority entrepreneurs that would otherwise not qualify for a traditional or low interest loan to start their business. While the Phoenix Kiva Hub services all of Maricopa County, the results within the City of Phoenix have been impactful:
- 19 - Phoenix Loans Funded (12 outside Phoenix)
- $132,500 - Disbursed to Phoenix Entrepreneurs ($66,000 outside Phoenix)
- $6,974 - Average Loan Size ($6,266 outside Phoenix)
The Phoenix Kiva Hub’s focus on women and minority entrepreneurs has been impactful based on the 19 funded loans between February 2020 and April 2023 to Phoenix Entrepreneurs:
- 14 Credit scores below 650 (most bank loans require scores between 680-720)
- 17 Women-Owned Businesses
- 15 Minority-Owned Businesses
- 9 Black-Owned Businesses
- 3 Latino or Hispanic Owned Businesses
- 1 Native American, Asian or Pacific Islander-Owner Business
If approved, the City’s new Premiere Partner Sponsorship will continue to be used to pay for the annual licensing fee associated with hosting the Phoenix Kiva Hub, which includes a ten percent administration fee. The City of Phoenix will be recognized as the title program partner/trustee in all branded materials, digital products and media mentions alongside the BBB and GoDaddy.com (also a Premiere sponsor).
Phoenix Kiva Hub will provide a biannual report to City staff that will include the following items:
- Demographic data of Kiva loan portfolio
- Average credit score of borrowers
- Repayment rate
- Total number of loans
- Borrower related data by zip code
- Success stories
- Marketing: Impact (clicks, views, etc.) and traffic to Kiva landing page
- Events, Webinar, event, and networking opportunity tracking
Contract Term
The term of the three-year contract will begin on or about March 1, 2024 and end Feb. 28, 2027.
Financial Impact
The total sponsorship contract will not exceed $100,000. Funding is available in the Community and Economic Development Department's General Fund budget.
Department
Responsible Department
This item is submitted by Interim Deputy City Manager John Chan and the Community and Economic Development Department.