Solving the credit problem for the developing world is a very challenging undertaking with huge potential rewards, which is why this is so disappointing. Organ

Solving the credit problem for the developing world is a very challenging undertaking with huge potential rewards, which is why this is so disappointing. Organizations like this should not be not-for-profits. I don't believe that a business with such misrepresentation would have lasted this long without being called out. Hiding behind the not-for-profit label in markets where for-profits should be operating does nothing but distort the market and lull consumers/lenders into a false sense of do-gooding. These are financial markets and so we need to find effective market actors instead of not-for-profits that can unfairly compete due to their status. By using the not-for-profit label and misrepresenting interest rates, Zidisha is also painting the picture (whether they intend to or not) that businesses in this space are exploitative and that Zidisha is good. Micro-loans are expensive loans! Businesses have to charge a lot for them to be economical, but access to credit for high-turnover businesses can make a huge a difference if it makes sense for the business. What is really needed in the space isn't necessarily a lending platform, but more data and better techniques to lend. It's tough to vet entrepreneurs cheaply and at scale, but something I hope we will continue to get better at. There is a ton of money in the impact investing sector right now that could do a lot of good through market channels but lending in the developing world is still just too expensive and too risky. I'll close with another misleading statement from the October 2012 interview that the author of the blog post didn't discuss: ... the total rate paid from the borrower’s perspective averages 8.40%. Note that this is not much above the average rate of inflation in the borrowers’ countries. The problem here is that this statement assumes a stable currency against the US dollar. While 8.40% may be close to the inflation rate, for many of these countries an additional several percentage points of currency devaluation against the US dollar will raise the effective interest rate in local currency. I would love to understand how Zidisha deals with the challenge of currency fluctuations, especially when educating its borrowers. I hope the takeaway from this is not that micro credit and lending in the developing world is bad and exploitative - just that it is expensive and nobody is that great at it yet. I'm disappointed in Zidisha's misrepresentation but I hope it makes it clear that this isn't a solved problem that greed and bad business practice is getting in the way of. It's an extremely difficult, unsolved problem that we need more smart people working on to solve.