4.7.2017 Nguyen Minh Quang

Zidisha – Solution into Microfinance

The Year 2016 Through the Eyes of the Unitholders’ Representative
Responsibility as a Competitive Advantage of the Nordic Financial Sector?

As discussed in earlier blog (Transparency into microfinance), we have planned to move more money from Kiva to Zidisha. For the matter of transparency, it is necessary for us to have direct communication with the borrowers, and Zidisha is the first P2P lending platform who claims to guarantee this. My purpose for this trip is to make sure that Zidisha’s platform does indeed establish direct communication between us, in the meantime the model itself is efficient and sustainable for both debtors and creditors.

So I took a flight to Nairobi to see how this really works; and to see if I could get in touch with some Kenyan entrepreneurs applying for loans from Zidisha.

Before the trip, we ordered some merchandise for #HCPSPIRIT from Brian Wakalo, an entrepreneur on Zidisha. Thanks to Brian’s fast responses on his Zidisha’s discussion page, we were able to order 34 t-shirts with our printing design on the back and the idea was that I could be there by the time it’s all done to pick up the merchandise and bring it back to Finland.

I arrived at Jomo Kenyatta International Airport at 1 am. Through whatsapp, I made an appointment with Brian and he came to pick up and bring me to a hotel 20 minutes driving from Nairobi’s CBD.

My trip turned out to be more successful than I expected. During 2 days I was able to interview with 3 members on Zidisha, and one is about to apply. The last 3 days in Kenya I joined his team to make an MV for his afro-hiphop song, “the same way”.

Here’s the summary of the interviews. I asked the entrepreneurs about themselves, their business and their opinions on zidisha.

  • Brian, 29 years old, is an artist and entrepreneur from Nairobi, Kenya. He has been introduced dozens of people to Zidisha and now mentoring more than 50 members from Kenya. Through his fashion line, Rayoz Illz, he wants to market himself also in his music, so that his music and cloth line become more and more well-known in Kenya and other parts of Swahili-speaking Africa.
  • Moses was renovating his DVD and photocopy shop when I was there to visit him. Even though he was quite busy with his work Moses couldn’t hide his great passion for business during our interview. Being a taxi driver since his rearrangement for employment 8 years ago, he saw the high demand for transportation in Kenya and his vision is to go beyond people, to look at goods and services, to create differentiation in transportation industry.
  • Alvin is the owner of a playstation 2 shop in Nairobi. Fueled by the craze for football in Kenya, more and more people at young age come to places like this to play with each other after school or during holidays. Alvin wishes to expand his business, upgrade his consoles and purchase bigger TV screens, in order to compete with other shops in the neighborhood. Alvin’s purpose to open the shop is to keep the kids off the street, to keep them out of trouble, providing them a safe and fun place to hang out when they are not in school.
  • Glen has been working on his M-pesa shops for several years. M-Pesa is internet banking service in Kenya, provided by Safricom, allow people to send, receive money, pay for bills and transact domestically and internationally. Glen sells airtime credits, provide M-Pesa services for local and international clients. In the future, he wishes to become an M-pesa dealer, not just an agent.

It was quite certain to us that we do have direct communications with the borrowers, since Brian had been actively responded to my emails and texts since the beginning of our venture. After the interviews, I am even more convinced that everything claimed by Zidisha is true. Moses was introduced to zidisha by Brian. Brian was introduced to zidisha by his mom and sister. Moses is now also introducing other people to get loans from zidisha, who he trusts and believe capable of doing business. The whole process involves as little interest as it could (only 5% charged by Zidisha to maintain its operation), and certainly, a great deal of trust among those who are involved, where there’s no micro-finance institutions in between. The interest is indeed minimal, but zidisha does require a deposit of 40000 Ksh (about USD 400) from new applicant to make its system safe, and this amount of money is still a big problem for many entrepreneurs from developing world.

I believe that sometimes small things can make a big change. Zidisha is one of those things that provide real opportunities to real people. Although very small in size compared to other platforms, the way it works is revolutionary in many respects. I hope that in the future, more people, not just in Kenya but other parts of developing world too, will know about zidisha and will use it wisely to improve their lives, “to the extent some of us get to the level whereby we can help others as well, not only ourselves,” as Mr. Moses’s been said in the interview.

The Year 2016 Through the Eyes of the Unitholders’ Representative
Responsibility as a Competitive Advantage of the Nordic Financial Sector?

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