Kiva Zip is an experimental site facilitating direct p2p microfinance loans without any intermediaries. The original Kiva model relies on MFIs (microfinance institutions) which locally validate borrower request and disburse the money and collect the repayments.
Kiva Zip eliminates the intermediaries directly connecting lender and borrower in person to person microlending. This will reduce interest rates for the borrowers (which during the initial testing phase of Kiva Zip pay 0% interest). The use of direct electronic and/or mobile payments further reduce the costs of the loan transactions.
On the other hand Kiva expects that these loans carry increased risks for lenders.
Kiva Zip is in pilot stage. Here is what Kiva says about it:
Kiva Zip is testing new ways of realizing this mission with the goal of expanding our reach to unserved populations by using new technologies that also drive down costs to the borrower. …
We are excited to begin this first Kiva Zip pilot, and we know that there will be a number of other smaller trials and experiments on the Kiva Zip website. For example, there are plans for borrowers on Kiva Zip to be able to make comments and updates directly on their own loans; different loan sizes might be explored, or displaying loan amounts in Kenyan Shillings; and the look and feel of borrower profiles will differ from those on Kiva.org. It is our hope that many of these experiments will prove successful, and we will be able to apply our learnings to Kiva.org to continue to deliver the best experience and outcome for all lenders and borrowers.
On a sidenote: Zidisha (see recent coverage) is already using the direct p2p microfinance model (with interest for lenders).
(Kiva Zip mentioned at around 08:30)
I am already participating in Kiva.org; how would I be able to participate in Kiva Zip?
I work with Zidisha Inc., a small microfinance organization based out of Washington, DC that is run on a truly peer to peer microloan platform.
We are an organization that actually has been doing this all along since our inception in October 2009. Our director, Julia Kurnia, was shocked with the discrepancies she noticed when working in Africa with other microfinance organizations and decided to do something about it. Loans that were given at 0% interest were often actually dispersed with interest rates of 30% to 40% by the intermediary local loan institutions. Zidisha started out as an experiment in microfinance and has become a testament that this platform works. The loans target computer literate people who have any successful history of loan repayment. Zidisha conducts a background check only. Once on the site, the loans that are raised go directly to the borrower (for example, in Kenya we use M-PESA). We encourage borrowers and lenders to ask questions to each other, sent comments, and post to each other on the loan profiles. We have now raised over $180,000 in loans at a borrower interest rates of around 8%~12% based on mututally agreed upon terms between borrower and lender. Our repayment rate is 99.58%.
We would love to talk to you more about Zidisha Inc.
Best wishes,
Jason@zidisha.org
Jason
thx for your comment. I am aware of Zidisha and actually already posted interviews with Julia Kurnia.
P.S.: I removed the three extra links from your comment => one will be sufficient for everyone to find Zidisha
That is why there is such an intense demand for p2p solutions in developing countries, all local banking institutions conduct business more similarly to loan sharks thank actual banks. I was in Ghana last fall and interest rates were more like 80% for one-person businesses…