Zidisha

[Guest]

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[JKurnia]

Thanks for the feedback.  We are not tax experts either; we'd encourage Zidisha participants to consult their individual tax advisors on how their lending activities should be categorized for tax reporting purposes.

Yes, lenders can make both profits and losses on currency exchange rate fluctuations.  The Terms of Use was intended to make sure participants are aware of the downside risks so may not have made that sufficiently clear.  What do you think of the following revision?

"5. Loan amounts are fixed in local currency at the time of disbursement. Currency exchange rate fluctuations may cause reductions fluctuations in the dollar values of the loans over the course of the repayment period., causing These fluctuations may cause lenders to gain or lose money even if regardless of whether the loan is fully repaid."

[iampaul]

What do you think of the following revision?

"5. Loan amounts are fixed in local currency at the time of disbursement. Currency exchange rate fluctuations may cause reductions fluctuations in the dollar values of the loans over the course of the repayment period., causing These fluctuations may cause lenders to gain or lose money even if regardless of whether the loan is fully repaid."

Julia, that seems closer to me but I would suggest that you run it past your user community. I do not expect to be a member of that community very soon because of my other concerns at present.

The term "promotional gift" is typically used by businesses to refer to the little items they pass out for free to help get the business name out before potential customers - pens, memo pads, calendars, t-shirts, etc. Those businesses can then write off the expense of those items as part of their operating costs. I don't recall any other business besides Zidisha using the term in any other context - certainly not applying it to funds on account to the credit of their own customers. That is one of the concerns to me.

At some point I may dig into this matter and into Zidisha further. For now, I'll stick with the devils I know.

Paul

[JKurnia]

Dear Paul,

I understand.  We really appreciate your taking the time to review our lending platform so thoroughly and provide valuable feedback on things we can improve or clarify.  It's really unusual for us to hear from people who decide not to participate regarding the reasons why they are holding off, and this kind of information is perhaps even more useful to our efforts at continuous improvement than feedback from our current members. 

We had always wondered to what extent Zidisha's inability to offer a legal guarantee that lenders' funds would be returned, the fact that financial gains from our loans might be subject to taxation, and the use of terms like "promotional gift" in our Terms and Conditions, affect potential lenders' decisions to participate.  Though many of the terms specified there cannot be changed for regulatory reasons, there is likely some room for clarifications aimed at reducing lenders' concerns.  We'll aim to explore this possibility.

Thanks so much again, and best regards,

Julia

[iampaul]

It's really unusual for us to hear from people who decide not to participate regarding the reasons why they are holding off, and this kind of information is perhaps even more useful to our efforts at continuous improvement than feedback from our current members.

I hope you take to heart any feedback from your current members. Another one of my concerns was how little activity I noted when I glanced at your user forum. I didn't read through it, just glanced at the volume and activity dates. Ditto for discussion on FB, which anyway has never struck me as a good context for serious discussion of issues such as the discussions you have no doubt noted here on KivaFriends with regard to Kiva.

We had always wondered to what extent Zidisha's inability to offer a legal guarantee that lenders' funds would be returned,

Not a factor for me any more than it is on Kiva. That doesn't mean I don't carefully consider the risks v. benefits.

the fact that financial gains from our loans might be subject to taxation,

Among others, I use MicroPlace - also taxed.

and the use of terms like "promotional gift" in our Terms and Conditions

and that does seem to be a current sticking point for me, doesn't it? Words are very powerful, as is their potential for misuse. Again, you can note here on KivaFriends the extent to which some of us go to get some wording changed and to resist other wording changes which we feel are not conducive to what Kiva is supposed to be and do.

Best wishes,

Paul

[JKurnia]

Dear Paul,

Thanks so much once again for the informative and thoughtful feedback.  We'll keep your points regarding our Terms of Use language, tax implications of Zidisha lending activity, and participation in our User Forum and FB pages in mind as we grow and further develop our lending platform this year.  Much appreciated!

Kind regards,

Julia

[Skimmis]

http://www.zidisha.org

Has anybody tried it?

[Amy-in-PHX]

http://www.zidisha.org

Has anybody tried it?

I have not, sorry.

[wind5001]

Hmm, looks interesting. A bit like early Kiva, just polished (and the difference of interest surely)...there does seem to be some interaction between borrowers and lenders, but I am not quite sure whether that is staged by the partner in the country or genuine. Might be worth a try, especially as one seems to be able to invest as little as one wants...

EDIT: And only now I realize that this is an old thread...

David, do you have a word on your experiences now, a year on?

[David2051]

I greatly enjoy lending with Zidisha!  I think the communication with the borrowers is genuine and I enjoy hearing what is going on in their lives; what the weather is, how business is going, the health of their family members, etc.  There is a small forum with a link on the main Zidisha site which is worth browsing.  The director, Julia Kurnia, is extremely helpful and responsive.

I currently have 18 ended loans and they all repaid 100% except for one which I forgave due to the borrower's complications in pregnancy and her son's health issues due to having sickle cell.  I really like having the option to forgive a loan, and this particular case may be the loan that caused them to build in that capacity.   I'm not able to really break down my 24 loans that are still open.  I'm sure some of them are or have been delinquent at some point.  I'm not very diligent at tracking the repayments...

Strictly in terms of getting your money back, I would say there is more risk and all loans are subject to currency exchange risk.  That aside though, I would recommend it and I think the communication with the borrowers and the lower interest rates they must pay are major points in its favor.  The possibility of earning a little bit of interest (0-10% I think, 7% is the highest I've seen) at the same time is nice too and helps to offset possible losses. 

     

[wind5001]

Thanks, David! That was very helpful! I probably will give it a try.