When Arthur Verbrugghe was laid off from his non-profit job at the age of 59, the life plan he’d pursued for 35 years – to retire at 65 to be with his grandchildren – was in ruins.
“My life was upended,” he said. His unemployment benefits ran out at the end of 2013 and he had no job prospects.
What Arthur did have were design and sewing skills from his first career in the garment industry during Philadelphia’s heyday as a center of clothing manufacturing. And when he read about the demand for individuals to fill the growing need for small batch “Made in America” garment manufacturing, he decided to open a workshop called Atelier Arthur.
He poured his savings into it, but without a business track record, traditional loans were out of reach. Fortunately, Arthur discovered Kiva Zip, a unique non-profit that allows individuals to provide crowdfunded loans through the Internet to small entrepreneurs anywhere in the world. Arthur applied for a $3,000 interest-free loan.
In his online Kiva Zip profile, Arthur told his story to potential lenders. He wrote that a loan from Kiva would allow him to buy equipment and hire an employee for his Roxborough workshop, where he and a paid apprentice do everything from routine alterations to creating one-of-a-kind gowns.
Arthur’s goal is, of course, to earn a living. But his larger mission is to teach a new generation the lost skills of the needle trade – pattern making, cutting and sewing, marker making – to help create family-supporting jobs.
Much like Arthur’s time-honored trade, Kiva Zip’s platform enables a traditional kind of lending: trust and relationships. This is especially important in low-income communities, where entrepreneurs are often disconnected from traditional forms of capital. Loan qualifications are not based on credit scores, instead they are based on the social capital and trustworthiness that the borrowers have already earned in their communities and through their online profiles. “I felt connected to Arthur because he’s involved in sewing, as I have been my whole life,” said Sarah, one of his lenders.
Since its founding in 2005, Kiva has enabled 1.3 million individuals to make $630 million in online loans – some as small as $5 – to entrepreneurs across the globe. Philadelphia is one of a dozen U.S. cities with a local, Kiva Zip program, thanks to funding from The Barra Foundation. Barra funded Kiva Zip’s first two years of operations in Philadelphia, after which it is financially self-sustaining through voluntary donations from lenders. Barra’s Catalyst Fund supports significant new approaches that have yet to be tested, as well as proven innovations not yet available in Greater Philadelphia – such as Kiva.
It took just five days for the two-year loan to Arthur Atelier to be fully funded by 86 lenders from Philadelphia, New Zealand, Denmark, Canada, London and elsewhere.
Asked what he thought about Kiva Zip, Arthur’s response was simply: “It was incredible.”