Pay It Forward is a new crowdfunding concept in which Zidisha entrepreneurs join in funding projects for other entrepreneurs instead of repaying lenders.
Entrepreneurs who raise funding through Pay It Forward do not repay the amounts to lenders. Instead, they commit to reinvesting the amounts directly in other members' Pay It Forward projects.
How can I qualify to raise a Pay It Forward project?
You may qualify in one of two ways: 1) be a Zidisha member in good standing having repaid all loans you have taken, or 2) receive an invite from a Pay It Forward member in good standing.
Do Pay It Forward projects have to be repaid?
Yes, but you do not repay lenders for your Pay It Forward project. Instead, we ask you to commit to return the amount you received to the Pay It Forward community by funding other projects on the platform as long as you are financially able.
What is the cost of raising a Pay It Forward project?
The only cost is a 5% service fee to cover money transfer costs, which is deducted from disbursement in the event that your project is funded. There is no credit risk fee or other fee for Pay It Forward projects.
How do I reinvest the amount I raised in other projects on the platform?
Use the Pay It Forward deposit button in your project dashboard to make a payment, similarly to repaying Zidisha loans. Unlike loan repayments, the amounts you deposit will go into your Pay It Forward balance which you can use to fund other members of your choice.
To fund another member, go to the Pay It Forward projects page, select the project, enter the desired amount and use the Fund button to contribute your funds to your chosen entrepreneur.
Is it allowed to fund people I know such as friends or family?
Yes, as long as the member is using the funds for his or her own project, you may fund anyone you choose.
What if I repay my project but do not use the credit to fund any other projects?
If you do not use the credit within one week of payment, we will allocate the unused credit to other Pay It Forward projects on your behalf.
How many Pay It Forward projects can I raise?
You can raise as many projects as you wish, as long as you return each amount raised to the Pay It Forward community before raising your next project.
How can I earn increases in my Pay It Forward project amounts?
Each time you return an amount raised to the community, you can choose to contribute an additional 0 - 25% of your last project amount to fund other Pay It Forward entrepreneurs. We will match whatever additional amount you choose to contribute, allowing you to increase your project amount by up to 50% each time you raise a project.
For example, if you raise a project of US $100, you may choose to contribute anywhere between $100 and $125 back to the community. If you choose to contribute $125, then your next project limit will increase to $150.
How can I invite new members to the Pay It Forward community?
For every US $30 in Pay It Forward contributions you reinvest in the community, you earn the right to invite one new member to join the Pay It Forward program. The members you invite start with a project amount of US $50. You may invite them using the Pay It Forward invite page of your account.
What is the expected advantage of Pay It Forward projects over Zidisha loans?
Entrepreneurs repay Pay It Forward projects by funding new projects for other entrepreneurs, giving them a more direct stake in the process. Entrepreneurs may direct their repayments to projects that appeal to them and to members of their community, thereby strengthening the repayment incentive.
In addition, repayment requirements are more flexible in that entrepreneurs may choose to return just the amount they have received, or to deposit an additional amount into the Pay It Forward community in return for an increase in credit limit and invite privileges. This provides a safety net in case of financial difficulty, while allowing those who are financially able to earn access to raise larger amounts.
How are Pay It Forward project recipients vetted?
Pay It Forward project recipients undergo the same identity verification and orientation process as traditional loan recipients. Pay It Foward project recipients must also upload a video of themselves and provide longer profile page descriptions than traditional loan recipients.
As a lender, how should I decide whether to fund Pay It Forward projects?
Pay It Forward projects are a good choice if you would like your repayments to be recycled into new projects and prefer allowing your chosen entrepreneurs to allocate them instead of our automated relending tool. As described above, the repayment terms of Pay It Forward projects are even more entrepreneur-friendly than those of traditional loans.
How will I be able to track the impact of my projects?
As with loans, Pay It Forward participants are asked to share updates, photos and videos with their backers. In addition, the Your Impact page will track the follow-on projects funded by the entrepreneurs you backed, so that you can see your impact continue to grow over time.
You may view an example of a Pay It Forward project which has been repaid and used to fund new entrepreneurs here.