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LAST UPDATED: June 27th, 2019

With their roots in the entrepreneurial culture of San Francisco, Kiva Zip is a subsidiary of Kiva, a successful micro-loan platform which began in 2005. Kiva Zip is a separate but connected project of Kiva that takes a more direct approach to micro-loans. Kiva Zip is currently in its alpha testing stage, and will later be integrated into the rest of Kiva.

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The Good

  • Low Interest Rates
  • Non-Profit Status
  • Process Leading Up to Funding
  • Application

Low Interest Rates

The main benefit that draws attention to Kiva Zip is that they have a 0 percent interest rate. Impossible, right? Not with Kiva Zip. Their platform is built around borrowers receiving small loans and making quick repayments, and the 0 percent interest rate is an innovation changing the way that young businesses are borrowing money. This is unique even from the traditional Kiva model.

Non-Profit Status

Kiva Zip works much differently than other micro-loan providers, and here's what we mean by that: Kiva Zip is a non-profit organization that matches lenders with borrowers based on trust and business potential. All prospective borrowers (individuals and businesses) are required to first make a donation in order to become a part of the Kiva Zip community. Once they have lent some money to another business, they can prepare to receive their own funds.

Process Leading Up to Funding

In order to receive funds from Kiva Zip, prospective borrowers must first ask their friends and family to lend money. This experience gives prospective borrowers credibility as well as allows more people to be involved in the entrepreneurial process. Once the borrower has reached a specific goal, their petitioned loan will then be posted to the rest of the Kiva Zip community and other lenders can contribute to the fund.


The benefits of this model are that essentially anyone can apply. The qualifications for receiving funding through Kiva Zip are that the borrower must be trusted by enough family and friends and provide a solid enough business plan in order to be trusted by other lenders. This has very little to do with credit score (according to their website credit score doesn't even play a role), and has much more to do with the overall potential of a business.


The Bad

  • Lengthy Process
  • Limited Capital
  • Difficult Process

Lengthy Process

The negative aspects of Kiva Zip are really tied to the entire structure of the program. For starters, Kiva Zip is not going to be a quick option. The platform requires that any potential borrower first make a donation to another borrower. After this donation has been made, and the petitioning borrower is given the opportunity to begin asking for their own funding, they are required to fundraise as much as they can from their family and friends. The time that these steps take is precious time, and many borrowers will not be interested in such a lengthy process.

Limited Capital

Likewise, Kiva Zip cannot offer as much funding as other lenders can. Kiva Zip has developed its own payment structure that allows borrowers to receive more funding based on their diligent repayment of past loans. Initial borrowers can only borrow $5,000 with a 6-12 month repayment plan. Once this has been repaid, borrowers can qualify for their second loan of $10,000 with a 12-26 month repayment plan. This tier system goes up to $10,000 which is the maximum amount that any borrower can receive from Kiva Zip lenders. Compared to other lenders, $10,000 may not be a substantial loan for some borrowers.

Difficult Process

The intricacy of the process is one other consideration that may make Kiva Zip an undesirable choice for many borrowers. Each borrower needs trustees in addition to being responsible for reporting on the progress of the business that is borrowing. The requirements to receive a loan from Kiva Zip are entirely untraditional, but they may still cause a roadblock for certain prospective borrowers. Requirements for prospective U.S. borrowers include:

  • No foreclosure, bankruptcy, or under any liens
  • Cannot be engaged in any of the following activities:
    • Multi-level marketing / direct sales
    • Illegal activities (e.g. gambling, scams)
    • Pure financial investing (e.g. stocks)
  • Borrowers must either be endorsed by a Trustee, or participate in the Kiva Zip No Trustee pilot program (see FAQ page for more details)
  • Must have a viable business plan
  • The trustee must know how the borrower will use the loan and understand how it will impact the business
  • Borrower will be required to invite a number of lenders from their own network to fund their loans
  • The loan must be seen to have a positive social impact
  • The borrower must be over 18

In short, Kiva Zip may not be the right option for businesses who need quick, simple, or large loans.


The Bottom Line

The bottom line about Kiva Zip is that they are a unique micro-loan provider. Kiva Zip has one of the most innovative micro-loan platforms that can be found on the internet today. Their approach is simple and holistic: loans are awarded on the basis of trust and potential, allowing very young entrepreneurial companies to take advantage of funding without the complexities of dealing with the big banks. Prospective borrowers will be most attracted to Kiva Zip for their zero percent interest and no fees, but they will also be interested in Kiva Zip for its concentration on socially minded business. Our conclusion is that if a borrower needs a smaller amount of money, has time to fundraise for that money, and is socially minded, then Kiva Zip might be the perfect option. If these characteristics do not fit a prospective borrower's business, it might be smart to look elsewhere.

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