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Dear Modern Microcredit, I am surprised that you find Zidisha to be insufficiently transparent. Zidisha has room for improvement in many respects, but we've al

by jkurnia 13y ago

Dear Modern Microcredit, I am surprised that you find Zidisha to be insufficiently transparent. Zidisha has room for improvement in many respects, but we've always considered transparency to be a strong point of our platform. We have more detailed statistics on repayment rates, trends in repayment performance over time, and risk levels in currently outstanding loans than any other microlending website I know. For example, Kiva, Kiva Zip, United Prosperity, and other well-known microlending websites do not even publish Portfolio At Risk statistics. Since Zidisha is a direct P2P model, our repayment rate is not inflated by "phantom payments" reported by local intermediary partners. (http://blog.givewell.org/2009/10/13/kiva-repayment-data/ http://blog.givewell.org/2009/10/13/kiva-repayment-data/) When we report a repayment as having been made, that means the borrower truly did make that payment. We make it very clear to prospective lenders that lending through Zidisha is risky. Here are some excerpts from our website: "Zidisha is a low-cost nonprofit community managed by volunteers. Our purpose is to connect individuals in marginalized countries with the chance to improve their lives through affordable loans. We are not a financial institution or an investment service, and Zidisha is not a safe place to store your savings or financial assets. We recommend you treat lending through Zidisha as a philanthropic activity, and that you not lend any funds that you cannot afford to lose." (first paragraph, Trust and Security, https://www.zidisha.org/index.php?p=123 https://www.zidisha.org/index.php?p=123) "Is Zidisha a safe place to store my savings? No. Zidisha is a platform for philanthropy, not a replacement for traditional savings accounts or financial investments. Zidisha loans are highly risky, and direct person-to-person lending across international borders is such a new endeavor that expected losses cannot be predicted with sufficient accuracy to make Zidisha loans a safe way to store funds you cannot afford to lose. We recommend that you treat Zidisha loans simply as a way to help others, and that you lend no more than you would normally be prepared to give away to charity." (Lender FAQ number one, https://www.zidisha.org/microfinance/faq.html https://www.zidisha.org/microfinance/faq.html) "The principal purpose of Zidisha's lenders in funding loans is to improve the lives of these entrepreneurs, and not to make a profitable financial investment. Lending to entrepreneurs through Zidisha involves a meaningful risk of loss of your principal lent. In addition, you are very likely to lose money in real terms on any loan you fund, even if it is repaid by the borrower, as a result of currency exchange rate changes, PayPal fees applied to uploading credit to your lender account, inflation and other factors affecting the value of principal and interest payments made by a borrower. Accordingly, we recommend that you consider lending through Zidisha to be a philanthropic activity, and you should not lend more money through Zidisha than you are prepared to lose." (Terms of Use, https://www.zidisha.org/index.php?p=5 https://www.zidisha.org/index.php?p=5) More generally, our website code is open source (https://github.com/Zidisha/zidisha https://github.com/Zidisha/zidisha), and conversations among our volunteer staff take place in public in Zidisha's forum. (https://www.zidisha.org/forum/categories/volunteer-conversat... https://www.zidisha.org/forum/categories/volunteer-conversat...). Our operational procedure manual is published on the internet for anyone to see. (https://sites.google.com/a/zidisha.org/zidisha-staff/ https://sites.google.com/a/zidisha.org/zidisha-staff/) If anything, we are transparent to an extreme. I do agree that Zidisha loans are not viable as a purely financial investment. Financial investment is not the purpose of our platform. And that is exactly what we are communicating to prospective lenders. Best regards, Julia Kurnia Director, Zidisha

lutusp 13y ago
> Who are you? Wrong tack. I offer this advice -- post a list of the inaccurate, misleading, or otherwise non-objective claims made in the original article, point by point, in a dry editorial fashion, without anything resembling a personal attack. In other words, take the high road, ignore the source, focus on the facts. Remember that anonymous comment is almost a religious principle, a civil right, among Internet bloggers. To question the right of anonymous comment is a non-starter as a debate tactic.
aurumpotest 13y ago
lutusp is right - your comment comes across as aggressive and personally attacking, as if you did have something to hide. If you 'could write a long post explaining the many inaccuracies in this article', please do so! That way Modern Microcredit can edit their article if necessary to take it into account, and also, your lenders, who will undoubtably be reading the article, will see a polite and informative founder intent on setting the record straight rather than a quick-to-anger, quick-to-attack founder who doesn't bother to defend the company.
modernmicro 13y ago
I'm a long-time observer of microfinance who is an active participant in most of the lending/crowdfunding platforms out there, including yours. I'm also a hacker, and am excited about the way that tech is being used in microfinance and crowdfunding. I think this stuff could have a big impact on the developing world, which is why I started this blog last month. I'm slowly working my way through the topics listed here, some of which I hope will be of interest to HN readers: http://modernmicrocredit.blogspot.com/2014/03/modern-microcredit-covering-trends-in.html http://modernmicrocredit.blogspot.com/2014/03/modern-microcr... Zidisha just happened to be the first topic I started with. My next article is going to be about revenue models in crowdfunding. Some companies are using some dark design patterns in their revenue models, and I plan to cover that as well: http://modernmicrocredit.blogspot.com/2014/04/revenue-models-in-crowdfunding.html http://modernmicrocredit.blogspot.com/2014/04/revenue-models... As I mention in the introduction to my article, I wasn't planning on writing a followup on Zidisha. But then you responded to my last article by dramatically lowering your interest rates. So I wrote a followup covering what that meant for lenders. Like I said in the article, Zidisha shows a lot of promise, and I very much want the concept to succeed. But to do that, I think you need to start being more transparent about the problem you have with high loan loss rates. I would love to see a long response from you regarding the article. I'd be happy to publish your response in the comments of my article, or even in the article itself. If you have any corrections, I'd be glad to publish those as well.

by jkurnia 13y ago

lutusp 13y ago

> Who are you? Wrong tack. I offer this advice -- post a list of the inaccurate, misleading, or otherwise non-objective claims made in the original article, point by point, in a dry editorial fashion, without anything resembling a personal attack. In other words, take the high road, ignore the source, focus on the facts. Remember that anonymous comment is almost a religious principle, a civil right, among Internet bloggers. To question the right of anonymous comment is a non-starter as a debate tactic.

aurumpotest 13y ago

lutusp is right - your comment comes across as aggressive and personally attacking, as if you did have something to hide. If you 'could write a long post explaining the many inaccuracies in this article', please do so! That way Modern Microcredit can edit their article if necessary to take it into account, and also, your lenders, who will undoubtably be reading the article, will see a polite and informative founder intent on setting the record straight rather than a quick-to-anger, quick-to-attack founder who doesn't bother to defend the company.

modernmicro 13y ago

I'm a long-time observer of microfinance who is an active participant in most of the lending/crowdfunding platforms out there, including yours. I'm also a hacker, and am excited about the way that tech is being used in microfinance and crowdfunding. I think this stuff could have a big impact on the developing world, which is why I started this blog last month. I'm slowly working my way through the topics listed here, some of which I hope will be of interest to HN readers: http://modernmicrocredit.blogspot.com/2014/03/modern-microcredit-covering-trends-in.html http://modernmicrocredit.blogspot.com/2014/03/modern-microcr... Zidisha just happened to be the first topic I started with. My next article is going to be about revenue models in crowdfunding. Some companies are using some dark design patterns in their revenue models, and I plan to cover that as well: http://modernmicrocredit.blogspot.com/2014/04/revenue-models-in-crowdfunding.html http://modernmicrocredit.blogspot.com/2014/04/revenue-models... As I mention in the introduction to my article, I wasn't planning on writing a followup on Zidisha. But then you responded to my last article by dramatically lowering your interest rates. So I wrote a followup covering what that meant for lenders. Like I said in the article, Zidisha shows a lot of promise, and I very much want the concept to succeed. But to do that, I think you need to start being more transparent about the problem you have with high loan loss rates. I would love to see a long response from you regarding the article. I'd be happy to publish your response in the comments of my article, or even in the article itself. If you have any corrections, I'd be glad to publish those as well.