Can borrowers be trusted to reschedule their own loans?

Financial Access Initiative, 13 September 2012

I have written before how tiny Zidisha Microfinance is challenging long-held assumptions by leveraging internet social media and mobile payments like M-PESA to lend to clients without the help of loan officers or local staff.  Since then, Zidisha has grown from tiny to small, with a portfolio now at $200,000, over 430 active borrowers, not to mention its 1400+ lenders.  And, as before, its operations remain solid, with PAR30 at a respectable 6.6%[1] (check out its stats for more).

I’ve been advising Zidisha since before its launch in 2010, and with that had the opportunity to watch the evolution of the platform’s many innovations.  One feature, introduced in August 2011, allows borrowers to request to reschedule their loans, regardless of whether they are delinquent or not.  more →

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Categories: Financial Access Initiative

Microfinance without the MFI? Zidisha tests the boundaries of microlending methodology

Financial Access Initiative, 5 July 2011

What does a microlending operation look like?  Well, it may be a bank or an NGO (and many others in between), it probably has some branches, branch managers, loan officers.  The funding of the MFI may come from deposits or from debt, whether from a local or foreign institution, including from online platforms such as Kiva.  There may be variations on these themes, but that pretty much describes microlending as we know it.

What if you took all that away – the branches, the loan officers, the institutional funders?  Could the lending still work?  Well, one model is that of Zidisha Microfinance, an online lending platform that connects lenders in (mostly) developed countries with borrowers in developing ones.  And, unlike Kiva, the connections are real – borrowers create their own online profiles, post their own loan applications, and make their own repayments.  They also post their own comments, as do the lenders.  There is no local MFI intermediary – it is literally the first true person-to-person (P2P) microfinance lending platform in the world. more →

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Categories: Financial Access Initiative