I signed up for Zidisha this week and loaded up a small amount to test the water with this new site. I love the concept of Micro-lending and what really excited me about Zidisha is that they have a Peer-to-Peer Model rather than using middlemen.

I would compare this company with Kiva, who do a lot of great work, I have loaned over 400 times with Kiva and currently have about $4,000 in outstanding loans being repaid at a rate around $600 per month. Here is a snapshot of the differences between the two companies:











My biggest Peeve with Kiva is that they are at the mercy of their Field Partners, these guys are the agencies that disperse the loan, and they also do some good things for lenders like check credit scores and chase up delinquent payments – however they charge such an exorbitant fee to the Borrow that it feels like your lending is promoting some sort of slave trade. These Partners have been known to charge up to 50% interest to the borrower, putting them heavily in debt on the loan that you are carrying the risk on.

What I love about Zidisha is that they charge a flat 5% fee to the borrower for the admin of the loan, plus $12 for a background/ credit check. However since they aren’t using the middlemen they also have less leverage in the field to make sure people pay back the loan.

The other nice thing about Zidisha is that they pay the lender an interest rate, which is actually bid upon. So the borrower has a page and states they will pay up to say 10%, you get the chance as a lender to offer any amount up to the full value of the loan and charge anything up to the 10% rate.

I decided on 3 loans of $50 each to try this out and was outbid on one where I asked for 10% (I am a slumlord at heart).









Whilst I am saddened by losing my bid, it is pretty cool that they allow this free market approach and therefore the borrow gets the best possible interest on his loan based upon what the market bids -I’m really excited about this concept.

The other thing that is bad about Zidisha is that they charge a fee to load via Paypal (read Credit Card or Gift Card) the charge is 3.5% to load the account, so to just breakeven you need to get that amount back in Interest, and have zero default. So I would estimate something around 5% average interest being a good breakeven point, and a little higher would be better still.

I’m going to leave my investment at $150 for now as I play with the system and see how it goes, if it gives me confidence I’ll buy in for some more later on.

NY Times Article on Kiva Field Partners Fees