Understanding Zidisha Loans: Direct Microfinance

What is Zidisha?

Zidisha is an online platform that connects borrowers in developing countries with individual lenders worldwide. The model focuses on direct, transparent microloans that fund small business needs, education, or emergency expenses.

How it works for borrowers

Borrowers create a loan request with a purpose, amount, and repayment term. Lenders review requests and fund them, either in full or parts. Once funded, the loan is issued and repayments are collected through the platform, with a visible repayment history that lenders can see.

How it works for lenders

Lenders create an account, browse loan requests, and choose which to fund. They can fund a portion of a loan or full amounts across multiple loans. As repayments are made, funds are returned to lenders, who can reinvest or withdraw.

Pros and cons

Pros

• Direct connection between borrowers and lenders
• Transparency about how funds are used and repaid
• Flexible funding options and the ability to fund in installments
• Community feedback and borrower histories

Cons

• Risk of default or late repayments
• Fundraising speed varies by loan request and market conditions
• Access may be uneven across regions and currencies
• Platform and regulatory risks inherent to peer-to-peer lending

Getting started

For borrowers

• Create a clear loan request with purpose, budget, and repayment plan
• Be prepared to answer lender questions about how the funds will be used
• Maintain communication and adhere to repayment terms

For lenders

• Sign up and review borrower profiles and loan requests
• Diversify by funding multiple smaller loans rather than a single large one
• Monitor repayments and consider reinvesting funds

Tips for success

Borrowers

• Present a clear, realistic budget and repayment schedule
• Share a concise business or personal plan to improve credibility
• Respond promptly to lender questions and provide updates

Lenders

• Start with small, diverse investments to spread risk
• Set expectations for repayment timelines and returns
• Use the platform's tools to track performance and reinvest earnings