Zidisha is one of the first micro-lending companies that directly connects lenders to borrowers without the hassle of going through a local bank or traditional lender.. Without any intermediaries, Zidisha will be set to scale peer-to-peer fundraising to even greater heights. The cool part? Zidisha is a Swahili name implying ‘expand’, and the organization connects low-income entrepreneurs of developing businesses to lenders all across the globe and then even assists them in growing their businesses and breaking out of the startup phase and into success. In an exclusive interview with Microfinance Focus, Zidisha Director Ms. Julia Kurnia explained her take on peer-to-peer microfinance and its growth across the United States and even the globe. We’ve compiled all of the information that was shared in this interview to help you better understand the amazing benefits of Peer to Peer Lending and steer us to a better future in understanding how and why it works.
The Benefits of Peer-to-Peer Lending
Peer-to-peer lending houses vast possibility to open up better economic opportunities for motivated people in low-income countries. Africa, Asia and even Latin America are home to a growing class of entrepreneurs who, while economically at a disadvantage in some cases, are computer-literate and have verifiable credit histories with local microfinance institutions – all of which can be tapped into in order to supply many of the communication and record-keeping services that are traditionally performed by banks and microfinance institutions locally. Zidisha is designed to serve this type of entrepreneur with little to no hassle and can be tapped into from anywhere.
The creation of Zidisha goes back to early 2006 when Ms. Julia Kurnia of Zidisha was working in Senegal with a field partner of the peer-to-peer microfinance lending platform kiva.org. Zidisha’s first loans were given in Kenya, where Zidisha took advantage of the almost universal access to the mobile phone banking service M-PESA in order to manage loan transactions over the Internet as easy electronic payments.
Connecting Directly Means Success
Zidisha is one of the only peer-to-peer lending services to connect individual lenders directly with microfinance borrowers in low-income countries, all without intermediaries. They use Internet and mobile phone technology in order to deliver the services needed to overcome the geographic barrier between lenders and borrowers – local and national credit history verification, extremely low-cost electronic money transfers that make it affordable even for companies just getting started in the digital world, completely independent tracking of a borrower’s performance history – then gets out and stays out of the way and lets web lenders and those entrepreneurs interact directly. As a result of this innovative technology and planning, entrepreneurs in the world’s most isolated and even impoverished areas can access the investment capital they need to grow their businesses into substantial sources of revenue for their families and even their countries.
Mobile Phone Banking
Thanks to Zidisha cutting out the middleman when it comes to lending and borrowing, small businesses that wouldn’t have had a chance in other countries now have an opportunity to grow and flourish, giving people jobs in impoverished areas. This also means cutting hunger, expanding knowledge and investing in younger generations, which would be totally impossible without a business model like Zidisha.
How is Zidisha Helping Small Businesses?
If you’re interested in ways that Zidisha is helping small businesses all over the world, you can read wired.com’s story of a man named Duncan Chege who started a small business in Kenya that gave people in the neighborhood internet access and taught the people living in the area simple computer skills that could potentially lead to office jobs that otherwise wouldn’t have been a possibility. You can read the story here: SMS Loans Let People Skip Banks in the Developing World.
Thanks to Zidisha, the entrepreneurial world is ever growing and succeeding as we look into the future of peer-to-peer microfinance.