4 ms·

-How to the funds reach the borrower? Zidisha is essentially doing the work that the local partners do in the Kiva model, right? How is that scalable across dif

by ipince 13y ago

-How to the funds reach the borrower? Zidisha is essentially doing the work that the local partners do in the Kiva model, right? How is that scalable across different countries? -As a lender, I can request the funds be given only to the business itself, right? In many of these places, it can be incredibly difficult, time-consuming, and expensive to create a formal "business". How does Zidisha help with that, if at all?

jkurnia 13y ago
Hi ipince, We use a different local payment channel in each country to transfer funds directly to the borrower. In Kenya, for example, we use the M-PESA mobile money service to electronically transfer cash into the mobile phone account of each person. M-PESA has an online interface, so we can do this transfer entirely online. Our first loans back in 2009 were disbursed to Masai nomad communities located over a day's journey from any paved road or electricity. It was an amazing experience to send cash electronically from our US bank account to the mobile phones of people in such a remote place, which had been unreachable even by local banks in Kenya. Recent innovations such as mobile phone-based payments are what make a platform like Zidisha feasible. To address your second question, yes, 100% of lender funds go directly to the entrepreneur that you fund. (We accept optional tips from lenders, and borrowers also pay a 5% service fee for the loans to cover our operating costs.) It is true that it is incredibly expensive and time-consuming in most developing countries to register a formal business with the government. Most of the entrepreneurs fundraising at Zidisha are in the "informal sector" - though they do very often employ others as a result of the loans. Zidisha does not provide any kind of business or other training services. We are purely platform for direct P2P interaction, closer to eBay than to the Grameen Bank.
- heynk 13y ago
  Hey! So excited to see what you're doing. I'd appreciate a little more clarity about this point: > 100% of lender funds go directly to the entrepreneur that you fund ... and borrowers also pay a 5% service fee Are 'borrowers' not the same as the 'entrepreneurs' that are funding? Is this 5% not paid until after the loan is repent, aka "interest"?
  - jkurnia 13y ago
    Hi Heynk, I realize now that was unclear - thanks! Yes, the 5% service fee is paid to Zidisha at the same time interest is paid to lenders, as the loan is being repaid. We have a separate registration fee that borrowers pay upon joining Zidisha, but it is only paid once and only in the event the borrower raises a loan.

by ipince 13y ago

jkurnia 13y ago

Hi ipince, We use a different local payment channel in each country to transfer funds directly to the borrower. In Kenya, for example, we use the M-PESA mobile money service to electronically transfer cash into the mobile phone account of each person. M-PESA has an online interface, so we can do this transfer entirely online. Our first loans back in 2009 were disbursed to Masai nomad communities located over a day's journey from any paved road or electricity. It was an amazing experience to send cash electronically from our US bank account to the mobile phones of people in such a remote place, which had been unreachable even by local banks in Kenya. Recent innovations such as mobile phone-based payments are what make a platform like Zidisha feasible. To address your second question, yes, 100% of lender funds go directly to the entrepreneur that you fund. (We accept optional tips from lenders, and borrowers also pay a 5% service fee for the loans to cover our operating costs.) It is true that it is incredibly expensive and time-consuming in most developing countries to register a formal business with the government. Most of the entrepreneurs fundraising at Zidisha are in the "informal sector" - though they do very often employ others as a result of the loans. Zidisha does not provide any kind of business or other training services. We are purely platform for direct P2P interaction, closer to eBay than to the Grameen Bank.

heynk 13y ago
Hey! So excited to see what you're doing. I'd appreciate a little more clarity about this point: > 100% of lender funds go directly to the entrepreneur that you fund ... and borrowers also pay a 5% service fee Are 'borrowers' not the same as the 'entrepreneurs' that are funding? Is this 5% not paid until after the loan is repent, aka "interest"?
- jkurnia 13y ago
  Hi Heynk, I realize now that was unclear - thanks! Yes, the 5% service fee is paid to Zidisha at the same time interest is paid to lenders, as the loan is being repaid. We have a separate registration fee that borrowers pay upon joining Zidisha, but it is only paid once and only in the event the borrower raises a loan.