> Posted by Jeffrey Riecke, Communications Specialist, CFI
Are interest rates necessary for loans? What about strict repayment structures? Recently, a colleague emailed me about Zidisha, an online lending platform that’s harnessing expanding internet penetration rates to offer lower-cost peer-to-peer loans. Zidisha adopts a handful of approaches that depart from how loans are typically served to the base of the economic pyramid, including in terms of interest rates and repayment structures. I wanted to learn more, so I reached out to Julia Kurnia, Founder and Director of Zidisha, for a quick conversation. The following is an edited version of our exchanges.
First off, I’d like to say congratulations on all of Zidisha’s success. I understand that in its six years, Zidisha has disbursed roughly $6 million in loans to 40,000 people. By way of background, maybe you could start by offering a quick description of Zidisha?
Zidisha is a peer-to-peer (P2P) microloan crowdfunding platform that lets ordinary people like you and me send zero-interest microloans directly to lower-income people in developing countries.
What makes Zidisha unique is that we don’t work through local banks or other intermediaries. Instead, we target today’s generation of internet-capable microfinance borrowers, and connect them with the lenders directly. Borrowers post their own stories and loan proposals, and dialogue directly with their lenders via our website.
Eliminating local intermediaries allows us to provide loans at far lower cost to the borrower than traditional microloans. This amplifies the social impact of the loans, as borrowers keep the profits they generate instead of paying high interest rates to cover local banks’ operating expenses.