A bath soap cutter, soap molds and a power soap-mixer are some of the things that Efiya Asabi can now afford to buy for her soap-making business, thanks to a $5,000 loan she received with help from UC Berkeley students.

Berkeley Microfinance, founded by senior Jasmine Segall last semester, is an ASUC-sponsored student group that seeks to aid small businesses on campus and in the Bay Area by giving them access to interest-free microfinance loans as well as allowing students to act as loan officers and gain fieldwork experience.

“The main goal is to empower local, low-income entrepreneurs in the Bay Area,” said Christine Foo, a member of Berkeley Microfinance, in an email.

According to Segall, the purpose of microfinance is to provide collateral-free and interest-free financial services to small business owners who would be unable to take out traditional bank loans with higher interest rates.

Berkeley Microfinance facilitates the lending process as a trustee of Kiva Zip, a nonprofit organization that enables people to make direct loans between $25 and $5,000 online to entrepreneurs in the United States and Kenya. The student group is responsible for identifying potential borrowers, evaluating the borrowers’ ability to repay the loan and endorsing the borrowers on Kiva Zip.

Segall said that a benefit of microfinance is that the loans do not depend on the client’s credit score but rather on trust between the client and the lending institution established through the endorsement process.

Members of Berkeley Microfinance came across Asabi’s soap bar stand in the Berkeley Flea Market, where she spoke to them about her need for more capital to buy soap-making equipment. After Berkeley Microfinance guided Asabi through the process and endorsed her on Kiva Zip, she became the group’s first borrower to obtain a $5,000 loan.

“I am really encouraged by the willingness of so many strangers to lend me money and believe in my vision,” Asabi said. “It is a benefit to many entrepreneurs that don’t have access to the capital needed to further their businesses.”

Asabi will use this money to expand her business, and once she pays back the loan lenders can choose to withdraw their money or loan it to another entrepreneur.

Berkeley Microfinance is currently working on establishing more partnerships with local businesses as well as educating UC Berkeley students on the importance of microfinance. The group aims to endorse four more borrowers by May and will hold a career panel discussing microfinance on April 12.

“Our long term goal is to become an established, well-reputed Trustee on Kiva Zip that endorses high quality borrowers and maintain a forum for students who wish to discuss, learn, and gain hands-on experience in the field of microfinance,” Foo said.