Zidisha has launched its global direct microlending platform at the legendary tech startup incubator Y Combinator.
Dubbed an "eBay for microlending", Zidisha is the first online P2P lending platform to link individual lenders and borrowers directly across international borders.
A United States nonprofit organization, Zidisha lets ordinary web users make microloans to individuals in the world's poorest countries. The loans allow the individuals to start small businesses to provide higher income for their families, and once repaid the loan funds are returned to lenders with interest.
Other microlending websites such as Kiva rely on local intermediary banks to manage the loans. The intermediaries pass on costs to the borrowers. The average Kiva borrower pays over 30% in interest to these intermediaries.
Zidisha's innovation is to eliminate these intermediaries and instead allow the lenders and borrowers to negotiate the loans and communicate with each other directly. The resulting cost savings are passed on to the borrowers, who pay only a 5% service fee to cover money transfer costs. Borrowers also offer interest to lenders, at rates of their own choosing. Lenders and borrowers dialogue directly via Facebook-style profile pages.
"This kind of innovation would not have been possible ten years ago," explains founder Julia Kurnia. "We are serving a new demographic: young adults in Africa and Asia who live on a dollar a day, but unlike previous generations, they are on Facebook and able to participate comfortably in an online community. As a result, they can use technology to overcome location-based barriers and access the resources they need to improve their lives."