an update on zidisha.org: how it didn't work out for me

last year, i heard about the website zidisha.org. i wrote about it last may. briefly, this is a microfinance and lending site, similar to kiva.org. the difference between zidisha and kiva is that you can charge interest. for the most part, the interest that i had charged (~3-4% per person) was collected simply to cover the currency risk.

my loans:

case #1: grace
grace is a 47 year old kenyan who sells second hand clothes. there were multiple lenders for this person, with interest rates ranging from 0% to 5.00%. i had given her $50 and had asked for 4%, which i thought was fair. if i were an american who dealt primarily with american currency, i would probably have asked for less.

and so, as i kind of do with many things with work life starts to ramp up, i left it on the backburner. i didn't check in on it for 5-6 months. i figured that at 17 months, there would be quite a significant repayment rate, similar to kiva.org.

but there were no payments. there was a vague mention about giving birth in august and needing a hospital stay, and having the loan re-scheduled. that comment was posted on august 17. and yes, she may have had a child, and yes, she may have had serious complications with the pregnancy. and yes, i could possibly have more empathy. but to hear nothing in the last 6 months is kind of bad form. i kinda feel ... scammed.

and she has repaid nothing.

okay, okay, so maybe she one off. so let's go to case #2.

case #2: cira
so cira is a woman from senegal who works as an office assistant by day, and sells clothing and jewelry by night. she took out a loan for $756 and had a repayment term of 63 months. i don't recall it being 63 months, because i wouldn't sign up for repayments over 5 years -- i wonder if it might have changed, and i have been known to overlook things so i'll assume it's my mistake. i gave her $50 and a 3.5% interest rate. i used a lower interest rate because she already had a successful loan on zidisha.

so things were initially going well, with her 63-month loan. i didn't check back for six months, and she was paying things on time, it looked like. until she posted something on her loan page:

which, roughly translated through google translate, meant that she had a bad client who didn't pay her but that it would be a temporary problem because she has all these other clients who are still paying her. so the problem, as of september 4, 2014, was going to be temporary. and then look at what's happened:

and almost 6 months later, not a word. again, not a very good feeling. i have gotten back $2.33 so far on this loan.

conclusion
i think i gave it a fair try by trying out two different loans. and it's not that they were late with their payments or that they tried really hard until they couldn't do it anymore. these loans appear to have failed abysmally. i'm not really expecting that things will turn out well.

so i think that these two loans will end my participation with zidisha at this time. i'll keep the account open to see if any more repayments happen, but i don't think their model thus far has worked as well as kiva.org.

as an aside, i have made 37 loans via kiva.org. 35 of these have been fully repaid. one is still repaying as per the original repayment time frame. only one has defaulted (although she paid back nearly 50% of the loan).