Frequently Asked Questions


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General FAQs

  • What does "Zidisha" mean?
    "Zidisha" is the Swahili word for "grow" or "expand", as in a business or a quality such as freedom or prosperity.
  • How does Zidisha compare to other microfinancing websites?
    Zidisha is the first microfinancing website to allow lenders to interact with borrowers directly, without intermediaries. Since the cost of lending through intermediaries is high, Zidisha offers loans at substantially lower interest rates to borrowers than other microlending sites. And the direct person-to-person connection allows for open dialogue between lenders and borrowers about the impact of the loans.
  • Why do borrowers choose Zidisha?
    Zidisha borrowers are located in low-income countries where small business loans are often unavailable, or carry prohibitively expensive interest rates (often above 40%) along with collateral requirements. Zidisha offers an alternative that allows the borrowers to access business expansion loans on flexible terms and at interest rates they can afford. The lower interest rates allow borrowers to keep a majority of their profits to either invest back into their businesses or to support their families.
  • Why do lenders choose Zidisha?
    Lending through Zidisha is a way to help disadvantaged, but highly motivated, borrowers improve their lives through their own efforts. Lenders do this by providing access to loan capital at interest rates that the borrowers can reasonably repay. In addition, Zidisha's direct peer-to-peer lending model maximizes transparency by allowing lenders and borrowers to communicate directly.
  • How is Zidisha able to work without local intermediaries?
    Zidisha itself controls each individual loan disbursement and repayment collection via the internet, so that management of Zidisha funds does not need to be outsourced to intermediary parties. Loan applications and business updates are posted on the website by the borrowers themselves, or by local friends and family of the borrowers. This allows our lending service to be provided independently of local intermediaries.
  • Does Zidisha have offices or staff in borrowers' countries?
    No. Zidisha reduces the cost of microlending by providing all of its services over the internet. Experienced borrowers who serve as Volunteer Mentors often monitor and assist fellow borrowers on a volunteer basis, and international interns may also visit borrowers, but Zidisha does not keep any office or employ any paid staff in borrower countries.
  • How does Zidisha find loan applicants?
    Anyone who lives in a country serviced by Zidisha may apply to raise a loan, and potential borrowers themselves take the initiative to apply. The majority of Zidisha applicants find us by word of mouth, as current borrowers recommend Zidisha to other members of their communities. Some applicants also find us through internet search engines, blogs or Facebook posts.
  • What background information is collected for Zidisha borrowers?
    Applicants to join Zidisha provide personal data, including links to Facebook profiles to verify online identity, national identity nubmer, home location, personal contacts and the contacts of family members and neighbors. Applicants must also provide the contacts of a local community leader, such as a school principal or leader of a place of worship, who can provide a recommendation for the applicant. The local banks and payment services that process Zidisha loan disbursements also check the loan recipients's national identity cards.

    Borrowers may optionally provide additional verification credentials, such as scans of their national identity cards, letters of recommendation from local community leaders and public endorsements from online contacts. The provision of these optional additional verification credentials is displayed on each loan profile page.
  • Does Zidisha assess the credit-worthiness of borrowers?
    No. Zidisha is not a bank or credit bureau, does not offer any guarantee of the accuracy of information presented by borrowers, and does not conduct any assessment of the incomes, debt levels or credit-worthiness of borrowers.
  • What is the total cost to the borrower?
    The total cost to the borrower for each loan is the 5% flat transaction fee, plus the weighted average flat interest rate bid by lenders financing the loan. For example, if lenders bid to finance a three-month, $100 loan at 3% weighted average interest, then the total cost to the borrower will be (5% + 3%) * (3 / 12) * $100 = $2. The borrower in this example would repay $2 in fees and interest on the $100 loan.

    In addition, borrowers pay a one-time new member registration fee of approximately $12, which is applied only if the new member succeeds in raising a loan through Zidisha.
  • Why is there a wide range of interest rates proposed for loans on Zidisha?
    Unlike with other microlending programs, Zidisha borrowers have the right to set the maximum interest rate they'll pay. Lenders can then choose whether or not to fund that particular loan either at or below the borrower's proposed interest rate.
  • Is Zidisha an investment broker?
    No. Zidisha is a nonprofit organization dedicated to fighting poverty by advancing the business financing opportunities of disadvantaged entrepreneurs. As such, Zidisha does not make any representation or promise that lenders will recover their funds or earn a positive rate of return.
  • How are funds transferred between Zidisha and the borrowers?
    In Kenya, loan disbursement and repayment transactions are conducted via M-PESA, a revolutionary money transfer service that allows Kenyans to receive and send cash via mobile phone messaging. In Ghana and Zambia, funds are transferred via a similar mobile phone payment service called MTN Mobile Money. In other countries, loans are disbursed via electronic payment order from a local currency bank account, and borrowers deposit cash repayments to the same checking account at the branch located nearest them.
  • How does Zidisha fund its operating costs?
    Zidisha is a nonprofit organization. We rely on voluntary contributions from our lenders and supporters to help cover operating expenses such as web hosting, bank fees, telephone costs, regulatory fees and ongoing development of our web platform.

    Borrowers pay a 5% fee on each loan they take out through Zidisha in order to cover the money transfer costs incurred as a result of their loan. Borrowers also pay a one-time new member registration fee upon successfully raising their first Zidisha loan.

    We do not charge any service fee to lenders to cover Zidisha's operating costs, but instead ask that those who participate contribute what they can afford to support Zidisha's growth.
  • What is the role of Zidisha volunteers and interns?
    Much of Zidisha's day-to-day operations, including new application review, loan payment processing and data entry, email support, accounting and even web development are conducted by volunteers and interns. Our volunteer staff includes part-time volunteers who work remotely with us from their home locations worldwide, and full-time volunteers who travel to countries where Zidisha has lending programs and work directly with borrowers.

    Please visit our Volunteer or Intern page to learn more about our volunteering and internship opportunities.
  • Do Zidisha borrowers really interact with lenders directly?
    Yes. Everything you see posted in a borrower's name on profile pages, loan applications and borrower comments is written directly either by that borrower, or by a computer-savvy local acquaintance who may assist the borrower in posting content onto the website. Although Zidisha volunteers may provide English translations of borrower postings and edit titles for clarity, we do not otherwise modify borrowers' content or write it on their behalf.
  • How are interest rates defined at Zidisha?
    All interest rates displayed on the Zidisha website are expressed as flat percentages of loan principal per year the loan is held. For example, for a loan of USD 100, taken at 4% annual interest with a repayment period of six months, the total interest amount will be USD 100 * 4% * (6 months / 12 months) = $2.
    What is the difference between flat interest rates and declining balance interest rates?
  • Why does Zidisha use flat interest rates rather than APR?
    The expression of interest rates as flat percentages of loan principal amounts is intended to make calculation of interest amounts more intuitive for borrowers and for lenders, and to facilitate comparison with other microfinance loans in borrowers' communities which also use the flat rate methodology to express interest rates.
    What is the difference between flat interest rates and declining balance interest rates?
  • Are lenders or borrowers exposed to a risk of fluctuating currency values?
    Under Zidisha's lending model, loan values are fixed in local currency upon disbursement, and the lenders assume currency risk. Exchange rates fluctuate and this can cause the US Dollar value of the loans to either increase or decrease during the course of the repayment period, leading to monetary gains or losses for lenders. Since exchange rate fluctuations often go both ways for multiple currencies during the same time period, spreading lending activity across multiple countries may help lenders hedge against currency risk.
  • How are loan transaction values converted between US Dollars and the borrower's local currency?
    The exchange rates applied to all transactions on the Zidisha website are the interbank value of one US Dollar in local currency, as posted on the foreign exchange conversion website www.oanda.com. We update the website exchange rates on the first day of each month, so that the exchange rates in effect on the first of each month are applied to all transactions during that month.

    When borrowers create a loan application, the local currency amounts they request are converted to US Dollars, and the loan amount remains fixed at that US Dollar value throughout the fundraising period until the loan is disbursed. At the time of disbursement, the US Dollar amount raised is converted back into local currency at the exchange rate in effect on the date of disbursement. At disbursement, loan amounts are fixed in local currency, so that borrowers' repayment obligations are not affected by exchange rate fluctuations. Each time a borrower makes a repayment, the amount received in local currency is converted to US Dollars at the exchange rate in effect at the time the repayment is received. The resulting US Dollar value of the repayment becomes the basis for the amounts credited to the lenders who funded the loan.
  • In which countries does Zidisha offer loans?
    We currently offer loans to residents of Benin, Burkina Faso, Ghana, Guinea, Indonesia, Kenya, Niger, Senegal and Zambia.
  • How does Zidisha protect the rights of its clients?
    We have adopted the following Code of Ethics, to which everyone who works with Zidisha must adhere.

    1. We will treat every applicant and client with courtesy and respect, and will serve them as timely and conveniently as possible. We will provide every client with a channel of communications through which they can give feedback on service quality, and will do our utmost to respond timely and effectively to any client complaints.

    2. We will provide all applicants and clients with complete and understandable information regarding the cost of our loans and terms of repayment.

    3. We will do our utmost to avoid causing over-indebtedness by doing our best to ensure that those who raise loans through our platform do not hold other debt, by limiting loan amounts based on past repayment history, and by verifying proposed total and monthly repayment amounts with clients before their loan applications are posted for funding.

    4. We will do our utmost to ensure that the business endeavors financed with our loans do not become a vehicle for child labor, or any other abusive or illegal practice.

    5. We will strive to prevent abuse of our lending platform through energetic pursuit of willful defaulters. At the same time, we will treat all clients regardless of repayment status with courtesy and respect, and will not deprive them of their basic means of livelihood in order to repay a loan. Acceptable repayment collection practices include reminders, mediation involving local community leaders, and judicial process. Unacceptable repayment collection practices include abusive language, threats, harassment of borrowers at their place of work or worship, forcible entry to homes, and seizing property without court order or in violation of the law.

    6. We will protect client information from those not legally authorized to see it.

    7. We will price our services at fair rates, with fees set at levels just sufficient to ensure the sustainability and growth of our organization. As a nonprofit organization, all revenue will be used to finance our lending program operations and to invest in their further development.

    8. We will avoid conflicts of interest by recusing ourselves of any involvement in organizational decisions that may result in personal benefits to ourselves or to our family members.

    9. We will not accept payment or gifts of substantial value from applicants or clients.

    10. Should a violation of any of these principles come to our attention, we will notify Zidisha management immediately. Management will ensure that violators of our Code of Ethics are sanctioned.

Lending FAQs

  • Is Zidisha a safe place to store my savings?
    No. Zidisha is a platform for philanthropy, not a replacement for traditional savings accounts or financial investments. Zidisha loans are highly risky, and direct person-to-person lending across international borders is such a new endeavor that expected losses cannot be predicted with sufficient accuracy to make Zidisha loans a safe way to store funds you cannot afford to lose. We recommend that you treat Zidisha loans simply as a way to help others, and that you lend no more than you would normally be prepared to give away to charity.
  • How does the loan bidding process work?
    When a Zidisha entrepreneur posts a loan application, he or she specifies the maximum interest rate he or she is willing to pay. Lenders may then place bids to fund portions of the loan at or below the borrower's proposed interest rate. If the total amount of bids received exceeds the amount requested by the applicant, then only the bids with the lowest offered interest rates are retained. In other words, the bidding process works like a reverse auction, in which loans are funded at the lowest rates that are acceptable to both parties.

    Once a loan application is fully funded, the borrower must confirm his or her acceptance of the loan. Once confirmed, we disburse the loan to the borrower in local currency.
  • What is the minimum amount I can lend? Is there a maximum?
    The minimum amount for a loan bid is one US Dollar. Lenders may bid to fund anywhere between one dollar to the full amount requested by the applicant.
  • What happens if a loan application is not fully funded by the expiration date?
    If a loan is not fully funded by the expiration date, then funds that had been pledged are returned to lenders, and the applicant may start over with a new loan proposal.
  • How do lenders deposit funds to their Zidisha accounts?

    Lenders worldwide may credit their accounts instantly using a PayPal account, or with a credit or debit card via Stripe. There is a 3.5% fee for both of these payment methods, which matches the average transaction fees deducted by PayPal and Stripe. This fee allows Zidisha to receive and pass on 100% of your funds to the borrower.

  • How do lenders withdraw funds from their Zidisha accounts?
    Lenders may request to withdraw any funds that are not outstanding with borrowers at any time. Withdrawals are sent via PayPal.

    IMPORTANT NOTICE: Zidisha offers no warranty or promise to make cash payouts to lenders. Please see our Terms of Use for more information.
  • Does Zidisha guarantee repayment of loans?
    No, Zidisha does not guarantee repayment of loans. Lenders fund loans at their own risk, with the understanding that they may lose part of all of the funds lent. Lenders should never lend funds that they cannot afford to lose through Zidisha.
  • Can you provide me with a report on a specific borrower?
    We do not have sufficient staff resources to offer personalized reports for borrowers. If you are having difficulty communicating with a borrower directly, you may request ask the Volunteer Mentor or inviting member listed in the borrower's loan profile for assistance.
  • What happens when a borrower repays?
    Each time Zidisha receives a repayment installment from a borrower, your share of the amount received is credited to your Zidisha lending account. You may then use the credit to finance new Zidisha loans, or request a withdrawal of all or part of your balance.

    IMPORTANT NOTICE: Zidisha offers no warranty or promise to make cash payouts to lenders. Please see our Terms of Use for more information.
  • How is my share of loan repayments determined?
    Your share of each loan repayment you receive is equal to the percentage of the loan you financed, plus the interest rate previously agreed upon between you and the borrower. Please note: since loan amounts are fixed in local currency, the exact dollar value of each repayment will depend on the current exchange rate when the repayment installment is made.
  • When a borrower makes a repayment installment, how is the dollar value of my share calculated?
    Each repayment installment is composed of principal and interest in a ratio that remains constant throughout the loan repayment period. At the time of disbursement, the value of loan principal and interest is fixed in local currency. The total amount of loan principal due to be repaid to each lender is equal to the percentage of the loan principal funded by that lender, multiplied by the local currency value of the loan principal. The total amount of interest due to each lender is equal to the local currency principal amount due to that lender, multiplied by the interest rate bid by that lender.

    When a repayment is received, the principal portion of the repayment is divided among lenders in amounts corresponding to the percentage of the loan funded by each. To determine each lender's share of the interest payment received, the percentage represented by the value of the repayment installment received divided by the total amount to be repaid by the borrower is applied to the total interest amount due to that lender. The local currency principal and interest amounts due to each lender are then converted to US Dollars at the exchange rate in effect as of the date the repayment is received. The resulting US Dollar amount is credited to the lender's account.
  • Why are so many of my repayments made early or late, or in greater or lesser amounts than scheduled?
    Most Zidisha borrowers lack salaried jobs, insurance, substantial savings. In the absence of government services, extended family members must help each other financially. Families tend to be larger, and accidents, illness and death happen much more frequently in developing countries than in wealthy countries. As a result, the incomes of most Zidisha borrowers are erratic and vulnerable. At Zidisha, we accommodate this reality by allowing borrowers to modify their scheduled repayments as necessary to adjust for fluctuations in their disposible income. Offering the ability to pay more at times of increased income and less when money is scarce provides a buffer against financial shocks, and helps ensure that the loans do not cause harm by taking resources away from basic livelihood.
  • Why do many borrowers have multiple business activities, or change their business activities frequently?
    Small business owners in developing countries can afford less risk than entrepreneurs in wealthy countries, because the lack of social safety nets means a loss of earning ability can put a household's basic survival in danger. When a household's income is not very far above what is needed for basic livelihood, the imperative to protect against loss of income outweighs the advantages of focusing on a single source of revenue. Small business owners often protect their households from this risk by maintaining multiple revenue-generating activities at the same time, or by switching quickly from one activity to another in response to changes in the market or other circumstances. For this reason, it is common for Zidisha borrowers to invest loans in more than one business activity, or to raise loans for purposes unrelated to previous loans.
  • What happens if a borrower fails to repay?
    We first prevent repayment problems to the extent possible by doing our utmost to ensure that credit amounts are commensurate with borrowers' demonstrated credit-worthiness, as evidenced by successful repayment of gradually increasing loan amounts.

    Despite these efforts, borrowers may experience disruptions in income due to unexpected circumstances, resulting in inability to make a loan repayment installment on the date it is due. When a borrower misses a payment, we issue a courtesy reminder by email and text message to the borrower's mobile phone within one week of the missed payment's due date. We do our best to get in touch with the borrower, understand the circumstances that caused the missed payment, and agree to a reasonable repayment plan. If needed, we may request mediation from local contacts of the borrower, such as the community leader who recommended the borrower to Zidisha, family or neighbors. As a last resort, we may opt to pursue legal action following local regulations in each country.

    Zidisha adheres to the Smart Campaign's Client Protection Principles for fair and respectful recovery practices. Our repayment recovery methods include reminders, mediation involving the local community leaders and other contacts who referred borrowers to Zidisha, and judicial process. We will never engage in harassment, abusive language, threats, or seizure of property without court order. We will also not deprive borrowers of their basic means of livelihood in order to repay a loan.
  • What happens when a borrower's repayment schedule is modified?
    Borrowers may modify their repayment schedules if unexpected expenses or loss of income prevent them from repaying as quickly as originally anticipated, or if they find they are able to repay more quickly than originally anticipated. Repayment schedules may be modified to either reduce or increase installment amounts, but the installments may not be skipped entirely.

    Whenever a loan is rescheduled, the total interest due to lenders is adjusted so that lenders earn the same monthly interest rate over the new loan period. For example, a lender who was due to receive $1 per month in interest for a twelve-month loan would be owed $12 in interest for that loan. If the loan is rescheduled to repay in 18 months, then the lender would be owed a total of $18 in interest.
  • Can I forgive a loan I made to a Zidisha borrower?
    In exceptional cases, Zidisha offers lenders the option to forgive their shares of individual loans they have funded for humanitarian reasons. When this option is activated for a loan, all lenders who are owed repayments for that loan are notified by email. If a lender chooses to forgive his or her share of a loan, the remaining amount owed by the borrower will be reduced by the amount that would have been paid out to that lender, and the lender will receive no further repayments for that loan. Lenders who choose to forgive their shares of loan repayments will remain anonymous, and borrowers will be notified only of the amount by which their remaining balances have been reduced. The loan profile page will display the reduced repayment schedule and a note indicating the number of lenders who have forgiven their shares in repayment of the loan. Other lenders' decisions to forgive loans will not affect amounts owed and repaid to lenders who do not elect to renounce repayments.
  • Will my name, address or other personal details be disclosed to borrowers?
    No. Only your Zidisha username, city and country, and photo if you upload one will be displayed on our website, and no information not publicly displayed will be communicated to borrowers. Borrowers may communicate with lenders via the comment forum on each loan profile page.
  • Are the amounts I lend through Zidisha tax-deductible?
    We do not recommend treating loan amounts as tax-deductible donations because they may be returned to you if you choose to request withdrawal of the repaid loan funds from your lender account.

    Donations made to Zidisha are tax-deductible in the United States.
  • Why does the Zidisha website not track the precise financial returns earned on my loans?
    Zidisha is a nonprofit microlending service whose value proposition is primarily social impact. We are not intended as a financial investment platform, and are not licensed to market loans as financial securities. We do not display tracking of financial returns in order to avoid giving the impression that our service is a good place to store financial assets or to make for-profit investments, and in order to ensure that we are in compliance with United States regulations governing the marketing of financial securities.

Borrowing FAQs

  • Who is eligible to apply for loans?
    Zidisha loan applicants must fulfill the following eligibility criteria:

    1. Be of good reputation and have the support of family, neighbors and a local community leader (such as a school principal or leader of a place of worship).
    2. Not currently hold any debt or outstanding loans from other sources.
    3. Have an active business or employment with sufficient income to ensure repayment of the loan in regular installments.
    4. Have access to the Internet on a regular basis, and be able to fill out borrower profile and application forms and respond to lender comments at the Zidisha website.
    5. Hold an active personal Facebook account with extensive social connections.
    6. Be able and committed to posting frequent updates regarding use of the loan and progress of the business on the Zidisha website.
    7. Reside in a country where Zidisha currently operates.
  • For which purposes may I take out a Zidisha loan?
    You may take out a loan for any purpose, as long as the purpose is legal and ethical. Zidisha members have raised loans for business growth capital, professional tools, university tuition, home improvements, health care and more. If your loan will not be used for a revenue-generating investment, you should explain the source of income that will be used to make repayments in your loan application.
  • How are the loans financed?
    Zidisha loans are not financed by a bank, or by donations. Instead, individual Internet users from around the world visit the Zidisha website and choose loans to fund. When borrowers repay the loans, repayments are sent to the individual lenders who financed the loans, and the repayments may then be relent to other Zidisha members.
  • Why do lenders choose to fund loans for small business owners in other countries?
    Lenders choose to fund loans for various reasons. Many lenders are curious to meet people and learn about life in other countries. Lending through Zidisha gives them the chance to get to know a small business owner on the other side of the world, and to learn about daily life and culture in that country. In addition, lenders wish to help entrepreneurs have the chance to succeed in growing their businesses, and lending through Zidisha allows them to hear directly from the borrower how their loan funds have helped. The direct connection between lender and borrower improves transparency, so lenders can be sure that all of their funds are going to their intended beneficiaries. Though lenders can earn interest through Zidisha, making money is not the main reason most lenders participate. The interest earnings allow lenders to compensate for credit risk and for costs such as money transfer fees and changes in currency exchange rates, so they can preserve the value of their loan funds over time.
  • How much can I borrow?
    If you have been invited to join by an existing member in good standing, you can borrow up to USD 150 (150 US Dollars) for your first Zidisha loan. If you do not have an invite from an existing member, you can borrow up to 50 US Dollars for your first loan. After that, your credit limit will increase depending on your record of on-time repayments.

    The current loan size progression is as follows:

    1. USD 50
    2. USD 150
    3. USD 450
    4. USD 675
    5. USD 1,013
    6. USD 1,519
    7. USD 2,278
    8. USD 3,417
    9. USD 5,126
    10. USD 7,689
    11 and thereafter. USD 10,000

    Please note that the minimum time period for progressing to the next maximum loan size is 1 month for loans under USD 200.
  • What are the fees and interest?
    Zidisha does not set an interest rate on its loans. Instead, applicants propose their own preferred interest rate, which may be between 5% and 10%. If lenders find the proposed credit terms reasonable, they may choose to fund the loan at or below the interest rate proposed by the applicant.

    Interest includes a service fee of 5% of the original loan amount per year the loan is outstanding (any interest above the 5% is paid to lenders). Zidisha is a nonprofit organization, and the service fee is used to pay for necessary operating costs such as bank fees and money transfer charges.

    New applicants also pay a one-time, fixed registration fee upon funding of their first loan. The registration fee is paid upon disbursement of the first loan, and is used to pay for the credit history verification that is conducted before a new borrower account is activated. If a prospective borrower's loan application is not funded, then no fee is charged.
  • What should I do if somebody claiming to represent Zidisha asks me for money?
    Zidisha does not authorize any person to collect money on its behalf. All payments to Zidisha should be deposited directly into the account listed in the "Repayment Schedule" page of your Zidisha member account.

    If any person claims to be collecting payments on behalf of Zidisha, please send an email with that person's name and telephone number if known to us at service@zidisha.org. We will work with you to report the fraud to the local police.
  • How is my interest rate determined?
    The interest rate is the weighted average of all lender bids, plus a 5% transaction fee which is used to cover Zidisha's money transfer costs. Since lender bids must be either less than or equal to the rate proposed by the borrower, your interest rate will not be greater than what you requested and will often be less. It is an annualized rate, a flat percentage of the loan principal amount per year the loan is held.

    The final interest rate will always be somewhere between 5% (the minimum transaction fee) and the maximum interest amount you propose. The exact rate is determined by the weighted average interest rate bid by the lenders on each loan.
  • What are the terms of repayment?
    Repayments are made in weekly or monthly installments, depending on your country. You may choose your own preferred amount to repay in each installment, and your own preferred day of the week or month on which repayments will fall due.
  • How do I transfer loan repayments to Zidisha?
    You are responsible for initiating loan repayment transfers using the mobile phone or bank payment service Zidisha has adopted in your country. You may view Zidisha's account number and payment instructions in the "Repayment Schedule" page of your Zidisha account.
  • How do I know my repayment is received?
    Repayments received are posted on your loan profile page within 3 business days.
  • What should I do if I cannot make a scheduled repayment installment?
    If you cannot pay the full amount due on the scheduled date, you must modify your repayment schedule in order to remain in good standing and avoid penalties. To do this, log in to your Zidisha account and use the "Reschedule Loan" page to propose a repayment amount that you can afford. You may reduce the amount due as necessary, but cannot skip a scheduled installment entirely. Rescheduling your loan will not affect your on-time repayment score as long as you honor the new repayment schedule. You may reschedule your loan again to increase installment amounts once you are able, so that the total repayment period and interest due is not increased any more than necessary.
  • Can I repay my loan early?
    Yes, you may repay your loan at any time. There is no penalty or reward to repaying a loan early; the total amount of principal and interest due is determined by the repayment due dates you select, and does not change based on actual date repaid.

    Note that there is a minimum amount of time loans must be held in order to graduate to a larger credit limit. If you repay your loan before the minimum length of time has passed, you may still raise a new loan, but the maximum amount will not increase.
  • What are the consequences if I repay late or default on my repayment?
    Late repayments damage lenders and other borrowers, because they are deprived of funds that could be lent to other deserving borrowers if they were repaid when due. Late repayments also damage your reputation and ability to earn confidence from lenders, who had trusted the your commitment to make loan repayments on or before the date promised. This damaged trust may make it harder for you to fund new loans at favorable interest rates through Zidisha in the future.

    You are responsible for managing your business in a way that ensures you will be able to pay loan installments in full on the dates they are due. If unexpected circumstances make it impossible to deposit a payment in full when it is due, it is your responsibility to use the "Reschedule" page in your Zidisha account to adjust the installment to an amount you can afford.

    If you miss a scheduled payment, Zidisha will issue one courtesy reminder by text message to your mobile phone. If the payment still is not made, Zidisha will request mediation from members of your community. If mediation is not effective, Zidisha may determine that the loan is defaulted. The consequences of defaulting on a Zidisha loan include disqualification from funding any new loans in the future, reporting of the default to local credit bureaux as well as all organizations that have previously lent to the borrower and/or lend in the borrower's area, and legal prosecution resulting in confiscation of the borrower's property, fines and other legal penalties.
  • What happens when I repay my loan according to the agreed schedule?
    Once your loan is fully repaid, you will be eligible to post a new loan application for funding on the Zidisha website. If lenders' experience is positive, they will likely be engaged and willing to lend to you again to support growth of your business. In this case you will likely find it possible to fund a larger loan, or to propose a lower interest rate for your second loan.
  • How is my performance recorded?
    The on-time repayment rate of all installments that have been due is displayed in your loan profile page, and prospective lenders use this as a basis for evaluating any loan applications that you post.

    In addition, all lenders who participated in funding the loan post a “feedback rating” on their lending experience to the Zidisha website. The feedback rating can be either Positive, Neutral, or Negative. Each borrower's profile displays his or her feedback rating as two numbers: the first is the percentage of all feedback ratings that are positive, and the second is the total number of feedback ratings given so far. For example, a borrower that has received 18 positive scores out of 20 total feedback ratings would display the score 90% positive (20). Lenders in the United States and Europe are accustomed to using this feedback rating system for financial transactions with unknown individuals over the Internet. It allows them to assign higher levels of trust to individuals who have already established an extensive history of similar transaction (as demonstrated by the high total number of feedback ratings), with a consistently high degree of customer satisfaction (as demonstrated by the high percentage of positive feedback ratings).

    Zidisha lenders generally assign positive feedback ratings to borrowers who repay loans on time, and also engage lenders by posting frequent, interesting messages and business updates on the Zidisha website.
  • How do I communicate with lenders?
    Each borrower's profile page contains a comment forum, in which the borrower as well as registered Zidisha lenders may post text messages and photos. Borrowers and lenders may use this forum to ask and respond to questions, share information and news about the progress of the business and get to know one another. Lenders highly value the chance to communicate directly with entrepreneurs whose loans they have funded or are considering funding, and borrowers are encouraged to post comments in the forum as often as possible.
  • Why is the amount I received in my loan disbursement payment slightly different from the amount originally requested?
    First, currency exchange rates may have changed since the loan was originally requested. Zidisha converts all funding amounts between local currency and US Dollars using the international exchange rates posted on www.oanda.com.We update the website exchange rates on the first day of each month. If a loan application is posted in September, it was converted to US Dollars for fundraising using the September 1 exchange rate. If that same loan is disbursed in October, it is converted back from the US Dollar amount raised to Kenya Shillings using the October 1 exchange rate.

    Second, a new borrower registration fee is paid upon disbursement of first-time loans. This covers the cost of the borrower verification needed to activate a new borrower account. This fee is deducted from the disbursement amount so that it does not need to be paid separately by the borrower.

    Examples: A loan funded on our website at USD 779 will be converted to Kenyan Shillings (KSH) using the oanda.com rate at October 1, which was KES 77.1494 to one dollar. USD 779 multiplied by 77.1494 is KSH 60,100. From this we deduct the new borrower registration fee of KSH 1,000, yielding a net transfer amount of KSH 59,100.
  • What is a Volunteer Mentor?
    A Volunteer Mentor is an experienced Zidisha member in good standing who volunteers his or her time to assist other members to interact with the Zidisha website and community. Volunteer Mentors receive credit limit increases commensurate with the repayment performance of the members who are assigned to them, but are not otherwise compensated for their services.
  • What should I do if somebody claiming to represent Zidisha asks me for money?
    Zidisha does not authorize any person to collect money on its behalf. All payments to Zidisha should be deposited directly into the account listed in the "Repayment Schedule" page of your Zidisha member account.

    If any person claims to be collecting payments on behalf of Zidisha, please send an email with that person's name and telephone number if known to us at service@zidisha.org. We will work with you to report the fraud to the local police.
  • I know someone who would like a Zidisha loan, but does not use the internet. Can I post an application on his or her behalf?
    We request that you do not invite or help non internet users to join Zidisha, because we have learned with experience that it is very hard for individuals who do not personally use our website to thoroughly understand and participate successfully in our community over the long term.
  • Whom should I contact with questions or concerns?
    You may contact the Volunteer Mentor whose phone number is displayed in your Zidisha account. You may also post questions and comments in our post it in our Member Forum to request a response from the Zidisha community.

Have a question that's not covered here? Please post it in our Member Forum so that one of our experienced users or staff can help.

Important Legal Notice

Zidisha is a nonprofit organization engaged in the facilitation of microfinance lending to low-income entrepreneurs in developing countries. Zidisha's primary purpose is to provide financial aid in the form of loans. Zidisha believes that its lending model fosters a sense of responsibility and success for borrowers who repay their loans. The principal purpose of Zidisha's lenders in funding loans is to improve the lives of these entrepreneurs, and not to make a profitable financial investment. Lending to entrepreneurs through Zidisha involves a meaningful risk of loss of your principal lent. In addition, you are very likely to lose money in real terms on any loan you fund, even if it is repaid by the borrower, as a result of currency exchange rate changes, PayPal fees applied to uploading credit to your lender account, inflation and other factors affecting the value of principal and interest payments made by a borrower. Accordingly, we recommend that you consider lending through Zidisha to be a philanthropic activity, and you should not lend more money through Zidisha than you are prepared to lose.