Forum > Lender Questions > Thoughts about delayed repayments
I have been using Zidisha since mid Dec 2017 or so. And now, handful of loans have technically defaulted - some have missed even 3 payments by now.
Of course I don't mind that. As explained in the FAQs, borrowers can have all sorts of hardships and a delayed repayment does not necessarily translate into a bad loan that has to be written off.
I initially got tempted to use the "Receive Advance Repayments" button. No, not to pay myself back. I have spotted couple other loans that have good track record and I thought that I would divert the money to such projects. But then I realized (in time, I must say!) that if I do that, I am working against the very principles of Zidisha. This is not a bank to act on defaulted loans right away. The idea is to give the borrowers every chance to work things out, to understand that they are not willingly ignoring payment but may have other far pressing needs and most importantly, have come to Zidisha exactly because of these reasons which keep them from getting loans from a commercial bank.
So, while I do want the borrowers to repay loan in time, I am going to wait. Hope they will work things out and repay eventually. Would be nice to hear from others...
There is also a limit of 1000$ on the money you can get out of the Member Loan Fund with a “Withdrawable account”. I haven’t asked for it myself yet.
There are (a few) people who are paying late. If they missed about 3 payments and they didn’t post a comment then I post the following message in their comments as a reminder.
“Please make a payment on your Zidisha loan. Lenders loaned to you with good faith that they would be paid back in a timely manner. Zidisha is a powerful tool when used correctly to grow a business. Do not throw away an opportunity to prosper in the future.”
If they are communicating then I give them the advice to lower the installment amount. This gives them some extra time.
If they missed about 6 payments and they haven’t provided a reason/comment then I ask their assigned volunteers mentors for help by posting a message on the mentors page. Then the mentor tries to contact the lender and give the lender assistance. Sometimes the lender has problems with his/her account or bank. Sometimes a family member is hospitalized. And sometimes they are just late. And only a small few aren’t reachable at all.
I think I have 2 loans (out of 185) who aren’t going to pay. I might ask for a MLF refund in the far future.
Please also give a lender a positive/neutral/negative review at the end of their loan. This is very important for new lenders. (Late paying with valid reason can still be positive).
Many lenders have “automatic relending” enabled. And the first option is “prioritize entrepreneurs with the best lender reviews”.
Thanks for the detailed response. Yes, I have inquired how they are doing with the project.
Will keep in mind to contact their VMs. In fact, Vera was a VM for one and had already posted a reminder about it.
I have pointed out exactly what you have said to couple of them - "(Late paying with valid reason can still be positive)".
Joost you are speaking well. But on priotising I tend to disagree with you. I can have the best repayment rate and post comments and have less lender review. Many lenders lack the time to review and so on. Are you disadvantaging someone relying on this statistics?
you are right. But the answer here is to make sure that lenders are aware of it. Just as there are 'best practices' for borrowers, there are best practices for lenders too. In fact, just last week or so, Joost asked me to provide positive review for a borrower (if indeed I had good experience and felt like it of course) since it helps automatic lending to borrowers.
Joost, is there such page that lenders can refer to? If not, I can help draft it - at least based on my experience.
A lender gets a mail if the loan is completely repaid.
In this mail there is a link to do a review.
It should be nice if Zidisha added an option to select the borrowers with the best repayment rate. I would then select that option instead of the current one.
As a borrower you could also post a comment to ask your lenders to give a review. They just have to navigate to the loan and use the review section.
Hi Joshi, long enough not to hear from you, hopefully you are fine and always given health and success, thank you for supporting zidisha and us borrowers.
I apologize for contributing to the comments here, I would like to respond in my position as myself, a borrowers, as ordinary people sometimes I have a difficult time, whether in financial or otherwise, or sometimes hit by a disaster suddenly, in my position as a borrowers in zidisha will certainly affect the process of installment payments to the zidisha, but I always believe that the wheels of this life will always spin, we will not always experience a distressful situation because God is fair, in times of trouble we do not need to despair and in happy times do not become arrogant.
as Joost says: Zidisha is a powerful tool when used correctly to grow a business, hopefully many borrowers follow zidisha policy correctly and understand their obligations as a borrowers.
like one of the lyrics in the theme song of Asian Games 2018 Jakarta-Palembang : GIVE YOUR BEST and LET GOD DO THE REST!
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have been busy at work. Nice to hear from you. Looks like email notifications are broken for past couple days. I see new posts when I go to discussion boards but dont see any emails about them.
I agree 1000% with what you have said above - "...in times of trouble we do not need to despair and in happy times do not become arrogant." Indeed, you do the best you can and leave the rest to God. Have a great day....
I am a borrower and also a Volunteer Mentor from Kenya. What you have pointed out is very true and has been a very big challenge to us as VM's.
I would like to let lenders know that there is large of borrowers who are not literate enough to be able to understand the importance of communication.
So when am dealing with loan defaulters, I often remind them that monetary issues do not have an end and that there is absolutely no other place they can get loans without collateral. The only collateral in Zidisha is your honesty!
So I encourage them to either reduce their instalments when there are other pressing issues and to communicate about why they have not been able to repay on time.
Most of them understand and they more often than not, they restart paying their loans.
I would also like to thank you immensely for being a lender on Zidisha organization. I want to take this opportunity to let you know that we do not take this for granted and our lives have changed for the better. I am a beneficiary of the Zidisha loans and I hope that this will continue for so long.
For my fellow borrowers, kindly repay all your outstanding loans on time and if there are difficulties, please communicate.
Thank you, John, for the explanation. When they've defaulted on 4 weekly payments and it's been over a month with no communication whatsoever, that looks like a default to me. On the other hand, when a borrower communicates that he is having financial difficulty, that is perfectly understandable. Even for someone without regular internet access, a communication once a month does not seem too much to ask. Thank you for reminding them.
Not all borrowers are the same and and infact the most genuine of persons with genuine businesses often find it hard to get financing like myself. Its a question of starting in a small way with a borrower and generally analysing his profile before making the said loan that actually guarantees payment. Am hopeful that a huge percentage on Zidisha will take the lending initiatives seriously and do the same favour of paying back.
I am both surprised and excited to see Jooshi's comment about borrowing and defaulting. You seem to understand borrowers in the most fundamental way, which is a good thing. I think 90% of borrowers in Zidisha have good intentions even if it may not reflect on their repayment patterns. These people (include me there lol) face real serious challenges. Getting a loan from Zidisha is the first step they make into the world of good business. We sometimes even use unorthodox means to get money because we have Zidisha loan repayment in mind. In a world (third-world) where commercial banks play gods and tread on the financially weak, why would we intentionally default paying Zidisha? At least Zidisha sommmeeehoww.......restores faith in humanity. Which is a good thing. Jooshi, you and other like-minded lenders are just awesome.
Who is Jooshi? Joshi or Joost?
I only choose to click the "Receive Advance Repayments" if the last payment was over a year ago and there hasn't been any communication. Unfortunately, that's happened about a dozen times so far for me.
I appreciate the work that mentors are doing to ensure that borrowers are paying, but sometimes it just doesn't work out.
I have been lending since 2015. I have a number of defaulted loans. For me, the money I have transferred each month to the my Zidisha account is more like a donation. When I get paid back I have more money to loan and more people benefit. If the loan is not repaid then I don't want advance repayment, I don't need the money and I don't want Zidisha to divert funds to me when it could be used for something more beneficial. It is just a chance you take when funding someone even after you read the bios.
Also, I don't go by percentage repayment on time but do make sure the previous loans were repaid. Some borrowers, just did not make repayments on time but managed to pull through at the end and paid larger sums of money.
I lived in South and West Africa. It is not at all easy for people to find the money to start even the smallest of businesses. My one neighbor's daughter made street food but ran out of money to buy supplies because her child needed medicine. She had no income and no way to buy supplies. All it took was $1 to get her going again.
I appreciate Zidisha for providing this opportunity for borrowers and lenders. Personally I love reading the stories. I am so amazed by the hard work, the creativity in trying to find ways to make money, the courage many borrowers have in the face of adversity and saddened by how many have have not been able to complete school and some who have not been able to use their education to earn a better living.
So while some have not repaid their loans, I am truly amazed by how many have.
I absolutely agree with your last sentence - "So while some have not repaid their loans, I am truly amazed by how many have." Just as there are defaulted loans, there are enough that get repaid like clockwork!
You have lived there and are active here since 2015. Hope we would here more from you about your experiences.
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