Zidisha – P2P Microfinance Directly to the Entrepreneur

Based on her experience in founding SEM Fund, Kiva’s oldest filed partner in Senegal, Julia Kurnia believes there is a vast untapped potential for p2p lending in microfinance.

To tap it she launched Zidisha.org, a non-profit that makes two changes in the process. First: There are no intermediaries. Lenders lend directly to computer literate entrepreneurs in Africa (currently Senegal and Kenya). Second: Only entrepreneurs with a credit history that have in the past paid back a loan by a bank or a financial institution successfully are eligible (this is verified).

Julia Kurnia told P2P-Banking.com:

Lending through local intermediary microfinance organizations creates high costs for borrowers (Kiva borrowers pay an average of 35.25% in interest to Kiva field partners, according to the Kiva website statistics).  Outsourcing loan management to local intermediaries also puts P2P platforms at risk of pyramid schemes, in which unscrupulous partners use funds disbursed for new loans to mask embezzlement of repayments due to lenders.  Kiva and MyC4 did very well when they operated at small scale, but as time passed and they added large numbers of partners, the cost of controlling intermediary fraud ballooned and may make their models unsustainable at a large scale.

Lenders at Zidisha upload money via Paypal (fees apply) and then can browse listings, written by the entrepreneurs themselves. Lenders do get paid interest, whoever “the principal purpose of Zidisha’s lenders in funding loans is to help finance these entrepreneurs, and not to make a profitable investment.” according to the FAQ. During bidding lenders can underbid each other with the result of the entrepreneur profiting from a sinking interest rate.

I am looking forward to use Zidisha. I plan to publish an interview with Julia Kurnia next week. If you have a question you want asked you are invited to email it to me or post it as comment below.

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3 thoughts on “Zidisha – P2P Microfinance Directly to the Entrepreneur

  1. I refer to the above comments attributed to Myc4 regarding its P2P partnership with Ebony Capital in Kenya. As the founder and CEO of Ebony Capital I wish to be granted the right to reply to these comments that are meant to mislead and cover Myc4’s structural weakness. Ebony played a critical role in mid wifing Myc4 and Kiva in Africa. Julia of Zidisha spent about 5 months at Ebony and like we did for KIVA and Myc4 Ebony supported the implementation of Zidisha and I am sure Julia can testify to these. They there is nothing wrong with MFIs like Ebony Capital but rather there is a serious structural weakness in Myc4 and Kiva methodology. The problem with KIVA/Myc4 is the difference between them and Zidisha. While Zidisha engages directly with entrepreneurs and seeks a direct contract Myc4 uses intermediaries with no clear engagement rules. Myc4’s funds disbursed through Ebony Capital are safe and recoverable but Myc4 does not have an interest in recovering these funds but rather wants to use Ebony and other African partners as an excuse for possible loss of investors’ funds due to poor structure and methodology. If not why are they having problems with most of their partners? I am available to provide more details on this.

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