A Little video about Zidisha - Spark Change..
Zidisha is a nonprofit peer-to-peer microfinance internet platform that allows people to lend small amounts of money directly to entrepreneurs in developing countries. "Zidisha" is the Swahili word for "grow" or "expand", as in a business, an investment, or a quality such as freedom or prosperity. Zidisha is the world's only direct peer-to-peer microlending service to link borrowers and lenders without intermediaries.
Inspired by interactive websites such as Facebook and eBay, Zidisha facilitates direct dialogue and microlending transactions between individual web users worldwide and computer-literate, low-income entrepreneurs in developing countries. Zidisha members can fund loans for as little as a dollar, which the borrowers then use to develop business activities that improve their families' incomes while repaying loans to the members with interest. Zidisha borrowers access the internet via public cybercafes, donated laptops in village schools, and even smart phones, then create their own profile pages through which they share photos and information about themselves and their businesses. As they repay their loans, borrowers continue to share updates and dialogue with lenders via their profile pages. This direct web-based connection allows Zidisha members themselves to take on many of the communication and recording tasks traditionally performed by local organizations, bypassing geographic barriers and dramatically reducing the cost ofmicrofinance services to the entrepreneurs.
Inspired by interactive websites such as Facebook and eBay, Zidisha facilitates direct dialogue and microlending transactions between individual web users worldwide and computer-literate, low-income entrepreneurs in developing countries. Zidisha members can fund loans for as little as a dollar, which the borrowers then use to develop business activities that improve their families' incomes while repaying loans to the members with interest. Zidisha borrowers access the internet via public cybercafes, donated laptops in village schools, and even smart phones, then create their own profile pages through which they share photos and information about themselves and their businesses. As they repay their loans, borrowers continue to share updates and dialogue with lenders via their profile pages. This direct web-based connection allows Zidisha members themselves to take on many of the communication and recording tasks traditionally performed by local organizations, bypassing geographic barriers and dramatically reducing the cost ofmicrofinance services to the entrepreneurs.
At the time of its founding, Zidisha was still an unproven experiment, piloting a concept that had never before been tested: that small-scale entrepreneurs in developing countries are capable of interacting responsibly with peer-to-peer lenders via a self-regulating web platform, without needing local intermediaries to communicate and manage loan transactions on their behalf.
Though there are other microlending websites that allow individuals to contribute funds toward microloans of their choice, all of them rely on local microfinance organizations to communicate with lenders, create loan applications and collect repayments. In these intermediated microlending platforms, the communication is all one way, so that the borrower is often unaware of the lenders who funded his or her loan. The average intermediary organization adds over 30% - sometimes as much as 100% - in fees and interest to loans raised through these websites to cover its own administrative expenses. Such high interest rates reduce borrowers' profits, sometimes to the point of making them poorer than they were before they received the loan.
Unlike the postings on other microlending platforms, the loan applications and comments posted on Zidisha's loan pages are written by the borrowers themselves. This opens the way for dialogue between lenders and borrowers, so that lenders can receive answers to their inquiries about the loan and business directly from the entrepreneur they are funding. Eliminating unnecessary intermediaries also decreases cost of the loans. The average Zidisha borrower pays only 8.02% in annual interest and fees, including interest paid out to lenders. This is below the rate of inflation in many developing countries.
Though there are other microlending websites that allow individuals to contribute funds toward microloans of their choice, all of them rely on local microfinance organizations to communicate with lenders, create loan applications and collect repayments. In these intermediated microlending platforms, the communication is all one way, so that the borrower is often unaware of the lenders who funded his or her loan. The average intermediary organization adds over 30% - sometimes as much as 100% - in fees and interest to loans raised through these websites to cover its own administrative expenses. Such high interest rates reduce borrowers' profits, sometimes to the point of making them poorer than they were before they received the loan.
Unlike the postings on other microlending platforms, the loan applications and comments posted on Zidisha's loan pages are written by the borrowers themselves. This opens the way for dialogue between lenders and borrowers, so that lenders can receive answers to their inquiries about the loan and business directly from the entrepreneur they are funding. Eliminating unnecessary intermediaries also decreases cost of the loans. The average Zidisha borrower pays only 8.02% in annual interest and fees, including interest paid out to lenders. This is below the rate of inflation in many developing countries.