Crowdfunded Loans Helping Small Business Grow

at Bloomberg dot com slash podcast. We have been hearing a lot about helping out businesses, small businesses, about helping out marginalized businesses, women and minorities over the past couple of days from the big gigantic bank CEOs on Capitol Hill. UM. But they typically come out with surprisingly small numbers. Really, UM, I guess Goldman Sachs is a really is a real exception. They've been doing this ten thousand small business program for

our decade now. But Chris Saklakis joins us right now. He's the CEO of a global nonprofit called Kiva, which is really a micro financing business that aims at UM marginalized business owners UM to raise and disperse crowdfunded loans. UM. Chris, welcome to the program. Thanks for joining us. What a time to be in this business. How did you get into this because I know you came from the famous

online wine platform Vivino. Yeah. So I've been at Kiva precisely one month in two days, so I'm very to it. But yeah, exactly so. Uh what I what I decided when I left Vino was that I really liked technology and online marketplaces, but I wanted I wanted to put my expertise to better use, and I wanted to I wanted to fulfill two things. One was to be a positive role model for my sons, who are both teenagers, and to work in the organization that actually has a

positive impact on people's lives. And so when Civa came along, it was a perfect combination of those two things. We use. We Kiva used technology through an online marketplace kiva dot org, where lenders can come in UH and find information on borrowers in the United States and around the world and decide on how much they want to give as a loan, And they can give as little as twenty five dollars UH to fund a loan for someone in Cambodia who's trying to buy seed for a farm, or someone in

the United States who's trying to establish a restaurant. So Chris, You know, this pandemic obviously has been hugely disruptive, disruptive to the entire planet, to the economics of the entire planet, and particularly on small businesses, minority businesses, things like that.

So as you think about your company, your effort at Kiva, how do you expect your business to change maybe going forward as you probably interact with a lot of these small businesses that have been impacted, Well, a lot of what we're doing is continue knewing what we've done in

the past. We we made some big shifts during COVID last year, but over the course of the fifteen year history of Kiva, we have funded over one point five billion dollars worth of loans to to nearly four million people in seventy seven countries, and roughly ten percent of what we've done over the last few years has gone to businesses in the United States. The people we target are people who traditionally aren't able to get loans. We call them the unbanked, the people who don't have access

to financial services. And so as part of what we did with COVID, we were available, we were able to provide loans to people who would get rejected from other banks people who couldn't get p PP loans, and so very often those are minorities of black and Latin X business owners women. UM. In fact, the vast majority of the loans we do in the United States, UM are too are two women and two people of color and immigrants. Right.

I mean, how many times have I been in a cab in New York City only to find out that my driver is actually was a doctor when he was working in Bulgaria or something crazy like that, UM, and just doesn't have any credit or any access to the financial system when he gets to the US. Yeah, that's right. So we we fund a lot of immigrants. Most of our funding goes to entrepreneurs, people who are starting businesses

or who have businesses as who want to continue. And one of the reasons Kiva was so resonant for me is because my parents are immigrants. They immigrated from Greece. When my dad came here, he really had nothing. He started as a laborer in the steel mill. He eventually became an apprentice with an electrician, became qualified electricians, started his own electrical contracting business, and then started real listening

to the development. But he couldn't have started that business or done his real estate development without access to capital, without a loan. And so the loans that you give to small businesses with Kiva resonate with me because they go to entrepreneurs just like my dad. Chris gives a sense just briefly about thirty seconds, kind of the financial returns for the folks that do crowds fund these loans.

How's how's it worked out. Yeah, So if you're a lender on Kiva, it's a zero interest, zero percent interest loan, but there's the repayment rate historically has been so if you put in a hundred dollars today, over the course of the next two years, you'll get ninety six dollars back, and then you can re lend that money if you want. So relative to a donation, Uh, this is this is a loan. The money comes back and then you can

re lend it. If you keep the money in the Kiva system for a period of four or five years, that hundred dollars could result in five hundred, six hundred dollars worth of loans back to people who needed That's very ingenious. I was trying to think about how the economics of that work, and you should do a reverse repo facility. You know, the FED got I think four eight six billion dollars at zero present yesterday from like fifty banks. Um. No, it's a fascinating business, and yours

is I think a really interesting story. Chris. So, it's great, um to have smart people like you doing this kind of good work to help. You know, other people out there just want to get a lug up, just need to get into the system. Chris Sokolochus, there is the CEO of Kiva. This is Bloomberg. Are bringing Laurence sour right now, Associate Professor of Emergency Medicine at Johns Hopkins

School of Medicine, And Lauren, I got a question. I've always thought about this, and I think because of the pandemic, I finally know the answer, but I want to hear it from you. You know, there've been anti vaxers around forever, and I always thought, like, who cares if their kids aren't vaccinated? As long as my kids are. Now, the same question is coming up in terms of COVID, like if of the public doesn't get vaccinated, does it matter

to the six of us that does. Yeah, I think I definitely think it matters because I think we have this sort of social contract and depending on the thresholds that people that people are looking at, it changes how safe it is to reopen and be in public, And especially with the disease like this, where we don't actually know what reinfection is going to look like and what the potential future threats are UM, the more people getting

vaccinated can only be better. When you think about people who are sort of anti vacts and UM, especially in the pediatric population, they're making decisions for kids who don't have sort of a say in that process, and on top of that before they were born. Yeah, that's true. UM, but there are kids who and kids and teachers and parents and family members of those kids who are not vaccinated who can't get vaccinated for various reasons. They may have a vaccine allergy, or they may have an immune

compromise situation or UM. You know, there's several reasons why people may not be able to get vaccinated, and so then you're putting those people at risk. So that's a good point. In fact, I read a story I think maybe it was in the Times about UM. For example, people who have received organ transplants UM aren't really aren't able to be vaccinated or the vaccine doesn't work as well for them. My theory had been this, Lauren, I thought, you know, what do I care if somebody in the

bar isn't vaccinated and has COVID. As long as I am, I'm not going to get it. But what I was thinking is maybe if too much, if too many people don't get vaccinated, then the virus lives on and it you takes into something even crazier, and then it overtakes my vaccine power. Yeah, I think that's always a risk.

I mean, mutations, variants are are going to continue to be a risk and um, and you could have a situation like we don't know about sterilizing immunity as as much as we want to yet, right, So you could have a situation where you're on the tail end of meeting another vaccination, you get a low grade infection from that person and and it does overtake your vaccine, or you take very low grade infection that you may not

even know that you have to someone else. And so there's there's situations where this chain of events happens, putting people who have no choice in the matter at risk. And that's where we want to really target, UM, bringing people who are not interested currently to getting vaccinated to the table and say what's stopping you, what's holding you back? What can we do to support bringing you to the

vaccine table. How about something that's maybe even I think simpler, which is simply masking Here in New York, so I guess we're we've had a week or two of you don't have to mask indoor? Uh In New Jersey. As of today where I live, you don't have to mask indoor and you can actually stand at a bar and have a drink. I think, God forbid. What are your thoughts, Lauren about masking indoors? Let's just let' let's assume the outdoors is you know, that's pretty clear, clear cut. But

what do you think about indoors? Yeah? For me, I think the risk is still high enough. My personal opinion is that I would so mask indoors wherever possible. UM. I think in general, we've relaxed these indoor mask mandates too soon. We're getting really close, and I think everyone's just so excited to you know, quote unquote get back to normal that they're willing to let their guard down.

And I think that is where we get into a little bit of a high risk situation, and and masking is not you know, it's it's not that hard to do, and it is a simple step that we can take to protect ourselves and protect those other people that we were just talking about, you know. And so for me, I would like to see the mask the masking continue indoors, especially in those more crowded locations, until we get to

those higher vaccinated levels. You know. Um, we're finally starting to look at the most at the simplest possible explanation for how this virus um got started at a market in Wuhan, down the street from a coronavirus lab in Wuhan. But even if the quote unquote conspiracy area's proved true, does it really matter where it came from to the

medical field? Do you need those details? No? I mean, I think I think it matters to some people, and I think there's always an interest in exploring origins, But I don't think we're going to get there with some targeted um exploration of whether or not this is a cover up, or whether or not the origins were because of some some purposeful or unintentional things that happened in a lab. You know that we don't need that information to improve our response the next time we have a pandemic.

We don't need that information to take care of these patients. We don't need that information clearly to build vaccines, to build therapeutics. What we need is to focus those efforts on how we get out of this pandemic and how we move move the global health forward to be able to prepare for the next one. And that's not through an origins discussion. Lauren, thank you so much once again for join as you do every week, and we really

appreciate your time. Laurence Sour, Social Professor of Emergency Medicine at Johns Hopkins School of Medicine. We should note that the Bloomberg School of Public Health is supported by Michael Are Bloomberg found Our, Bloomberg LP, Bloomberg Philanthropies, and this radio operation. Cities across the United States and the state of California, they're starting to make a case for local reparations. Are good. Folks at Bloomberg Business Week took a deep

dive one of those cities. Susan Burfield. Burfield, Senior investigative reporter for Bloomberg Business Week, uh and also the author of The Hour of Fate, Theodore Roosevelt, JP Morgan, and the Battle to Transform American Capitalism. So thanks so much for joining us here. You guys took a look at this whole reparation's issue as it relates to a small town of Evanston, Illinois. What did you guys find? Yeah,

so thanks so much for having me on. So Evanston, Illinois is um uh, as you said, a small city just north of Chicago, and UM, it has the distinction of being the first city in the US to offer reparations to its black residents, and UM, the first kind of effort that it's making, UM is to redress the housing discrimination UM that many black residents faced beginning as far back as nineteen nineteen. I'd say that I absolutely

loved the story, Susan. It was really the kind of it was like a book you just can't put down. I was taking care of my baby and trying to feed her bottle, and I just I couldn't really do anything until I no, I mean, I just I I

noticed that she couldn't distract me. I was. I found it really fascinating And at first, you know, it starts out really disturbing, because, Um, I was reading about Lucia's Sutton at the very beginning, and I was thinking, how is this possible, this kind of injustice in you know, the nineteen hundreds, that's my century. I could have imagine

it happening in the eighteen hundreds. But it's just, Um, it's something everyone should read, even people who have been have become kind of numb to the social justice and the Congressman we're talking about woke capitalism. But when you

read this, you can understand why it's worth fighting for. Um. The one thing I kept thinking to myself, Susan, is yes, you run into these real problems, especially on the local level, and you make this point in the story, if it's done on a federal level, it would be you'd have less you'd have fewer problems. Right. Yeah. Well, first of all,

just thanks so much for the kind words about the story. UM. It was been a wonderful privilege really to be able to spend so much time on it, um and with people in Evanston, so um it kind of makes me want to move to Evanston. It's a beautiful place and they're good apparently good that they're good people. For the most part, right, they if they're taking this on, Yeah, they're trying to do the right thing. And you know, to your question, UM, you know, at the local level, UM,

at it. You know, in a city like Evanston or in any city in the US, UM, there are always going to be different points of view about what reparations should look like at the local level, you know, and part of that is kind of what kind of discrimination or injustice to take on. First, how much money any city is going to be able, uh to to use to essentially you know, pay down the debt it owes to its black residents. UM. And you know, just the

nature of city government or even state government. You know, there's UM lots of opportunities for people to comment, so you can hear very directly from lots of people. UM. And you know, at the national level, UM, there's been uh increasing MOMENTUM might say, UM ward the discussion. You know, so the cities are taking it many steps further than what's happening on the national level. But there is at

least the discussion. You know, there is UM. There are studies that would help calculate how much reparations should be UM. And of course that's chillions of dollars, and in Evanston we're talking about millions of dollars. How does the process actually work if someone feels that they are due reparations, how's the process work? So in Evanston, UM, the first round of money, which is about four hundred thousand dollars UM and is going to be given out to recipients

this summer. UH and essentially anyone who lived in Evanston, any black residents who lived in Evanston from nineteen nineteen to nineteen sixty nine UM. That's the year after the federal government passed the Fair Housing Act. So if you lived in evans Been during that time, you're eligible and you're given first priority. Second priority is to the descendants of those people, and third priority is to a resident who moved or lived in Evanston after that and can

show that they faced discrimination. It's hard for me, UM to be flippant about this, because when you read about the Cannon family, the Simmons family, what happened to the Sutton family. UM, you just have to take it seriously. But being flippant is in my nature, and I want to say that it seems like the best thing you can do for social justice. If you visit Evanston is by weed, right, I mean because the first the money that they're getting comes from the three percent cannabis tax

and they've only got one weed vendor in town. So if you do go there, stop by and get yourself a pre rolled joint or something. Yes, well you're not the only one. The Alderman as they're called, Derek City Council member UM who came up with the idea UM. She's no longer serving, but I spoke to her while she was still in office and her message was, you know, come to Evanston and pleased buy drugs. Robin Ruth Simmons was that it was the Alderman now, uh, well that

was Anne Rainey. Robin Ruth Simmons though UM is the one who first proposed reparations UM idea UM and then you know, worked with some other city council members to

help create it UM. And it was Anne Rainey who came up with the idea of using the money from this new tax, you know, money that was unclaimed UM that they calculated would bring in about a million dollars a year, and then they devoted UM the first ten million dollars UM to the program, and you know, maybe that will take ten years to pless maybe less well hopefully UM, well they can raise those taxes a little bit. I think everyone will be willing to pay a little

bit more UM for their for a good weed. But I have to say now for you, as as senior investigative report or UM, you may not notice, but as for a regular person, the history that these people have discovered, the research that they've put in to to go back three, four or five generations and get you know, titles and deeds and the stories that they have the story just for that to me is worth it UM. I love the family history that that they have discovered that you've

reported here. Susan, thanks so much for joining us UM. Susan Bearfield and Jordan Holman wrote the story first US City Too Back Reparations meets hard Reality. Now let's delve into crypto. I don't think we've mentioned bitcoin at all today. Paul or Doge or ether or Tether. Mike mcgloan joins US Commodities Strategists for Bloomberg Intelligence on crypto UM. I mean, the volatility has been amazing, but the lineup of guests that we've had, Mike has been insane of the last week.

I have interviewed uh Nick Carter, who is a brilliant writer from Castle Island Ventures, Sam Bankman Freed, who is one of the richest people in America now and he's only twenty nine. It's got like forty billion dollars in crypto And Bobby Lee, who is a pioneer in the space UM. He started BTC China and now has a really cool UM hardware wallet out. Uh, Mike, what what are your what's your current thinking on bitcoin? Is? We've gone through these wild up and down swings. Is it

gonna Is it here to stay? The volatility for right now? Are are we getting past it? Well? Hey, man, I appreciate you mentioned some very smart people that I list basically enjoyed those interviews, and I think the key thing to think about in cryptos is it's a bool market that's corrected. Got way too excited and I'm one of the people got suckered into. What really brought me and we thought it would continue up was when valtily dropped sixty dave out and bitcoin dropped to the lowest of

the year right before the claps. It was like, oh, typically that means it's going to go higher. So it was a sign that was just way too much spec to exus is you know the minute that dose coin got in SATURNI live, that was the bell ringing. Okay, let's look back now, let's look forward. Right now, Ethereums up two on the year. The Bloomberg Galaxy Crypto index is up a hundred percent. Bitcoins up, bitcoins add the

rest of the space. Ethereum is a stud and but I think that's that that appreciates is going to continue because the fundamental underpinions are still quite strong. How about the regulatory overhang, it's beginning to build here. We've seen some central bankers, including some folks in China. How do you think about that. Yes, that's the key thing point you brought that in there, and the key thing that Kathy would said. There's just not much you can do

to really regulate bitcoin anymore. It's the world's largest decentralized network. It's open source software. So China his his. What China did recently, I think it's a good indication of how

significant bitcoin is now here. We have a country that had let's not have I mean, it's becoming a surveillance state, doesn't have free full capital, certainly doesn't have a discourse, and they have to limit their their people from from Winnie the Pooh and from the Internet, so they have to limit Bitcoin and they have to limit flow of capital.

So that's a significant sign. But it's also what's going to really tilt the US, I think to embrace it more because there's a cold war that's really brilliant and getting more and more. And that is what's I pointed out on the crypto chat this morning, is it's the digitalization of money. It's enhancing dollar dominance. The most widely traded crypto on the planet is tether. I've mentioned this before. It's double the volume of Bitcoin, and it's a digital dollar,

and it's an ethereum token. So key things there. Dollars dominating ethereums gaining dominant theorems that significant, and the US is probably gonna say, oh, we also have to do is nothing here and we're beating China and the world and this big battle against the two major powers. Is there any um crypto token that you think is ideal for spending Because my idea is somethings gonna come along where people say, you know what, I don't care if

a regulator embraces this. I don't care if some central bank says stay away and I'm gonna use this and get around the system. The problem is, right now, it's too difficult to do that with bitcoin because it's so hard to spend. I'll be sarcastic tether. I mean, it's a digital dollar, I'll be honest. The digital the global reserve currency is the dollar, and it's gaining dominance despite the fact US GDPs of client because after what's happened in China and Hong Kong, the world SE's okay, okay,

it's not the best place in the world. It is not the best, but the dollar is the best place, the best thing to transact. And then there's this global digital reserve asset. Now it used to be gold was the digital store value. It's becoming more and more bitcoin. So I think for spending dollars, it's actually gaining in terms of digitalization. And as far as actually spending, it

depends what you mean by that. The key thing that's really happening globally is a lot of third world countries or countries with don't have stable currencies like we are blessed with are all turning to cryptos and they can do it on their phones, and they're getting phones because they're leap frogging that technology. They might ahead of the wires to running the electricity out in rural India or world sub Sahara, Africa, but they can do They're getting

fun So that's happening everywhere. So like, what what's the bigcoin chat? Why am I not on this? I'll get you on the cryptot Please don't. I don't think you want to invite him in here. You need to be on that because Matt, you're so funny. But I'll be in the on Saturday morning tomorrow morning and hopping on a plane to go to Miami for the bitcoin conference. It is supposed to be the biggest one on the plan and it's live, it's not virtual. Where there you go?

All right, here you go. Don't need masks when I go to Miami Beach. I don't go to a bitcoin conference. Post. Thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews with Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. I'm on Twitter at Matt Miller three, pet On ball Sweeney, I'm on Twitter at pt Sweeney. Before the podcast, you can always catch us worldwide at Bloomberg Radio