Great points vjvj! I'll try to answer them below: 1) Traditional microfinance services you are referring to have intermediaries (ground forces) to help them wi

Great points vjvj! I'll try to answer them below: 1) Traditional microfinance services you are referring to have intermediaries (ground forces) to help them with loan disbursement, background check, loan recovery etc.. Zidisha is the first service to take everything online and that's why the interest rate is substantially lower. But it comes with a risk of low repayment rates. Repayment rate number was ~ 80% range last year and has gone up to ~90% after lots of process improvement. You can read more about it here: http://venturebeat.com/2014/08/20/y-combinator-backed-zidisha-has-been-stomping-down-non-performing-loans-with-some-extra-tech/ http://venturebeat.com/2014/08/20/y-combinator-backed-zidish... 2) Above link should answer it partially and Julia's answer should help more. Hope it helps!