Originally Posted by
brito11
This may be a bit OT, but reading the explanation of how Kiva works reminded me of a discussion a friend and I had about Zidisha.
Note:
(Zidisha is an alternative microfinance lending program that is peer-to-peer, as opposed to Kiva, where there is a local intermediary. Lenders can set an interest rate and earn that interest. You can fund via Paypal with credit card, subject to Paypal fees, but you can earn that back on your interest.)
The discussion boiled down whether Kiva was really helping these people out, as opposed to Zidisha where both lenders and borrowers benefit - the lender earns money while the borrowers gets a reduced interest rate as opposed to going through a traditional microfinance lending program.
Anyone have insight on the merits of one versus the other? Why would a borrower go through Kiva instead of Zidisha? Does Kiva serve a niche of the truly underbanked that Zidisha cannot reach?
Sorry for the long post! I'm considering doing some MS through this route, but am not sure that Kiva is the best there is.
Zidisha suffers from lack of accountability. While I lend there, I have no illusions that the vetting process for borrowers is highly suspect (but I don't believe anything about the borrowers on Kiva either - surely there is massive fraud in every aspect - but if a few legitimate borrowers are helped, at least it's better than nothing).
Heck, the interest rates are so low on Kidisha that I suspect the majority are simply using the money to relend to others at much higher rates.
For MS, stick with Kiva. They are well funded, and if you are careful, you can pick short duration loans (and if you know how to do it, can get almost instant repayments - not surprising that the biggest "lenders" tend to have the shortest duration loans). The problem with Kiva is they don't like MSers. They'll lock your account if you do too much lending/withdrawing and rather than seeing automatic transfers, you'll end up having to manually request repayment.
Frankly, Kiva is a silly way to do MS. There are much safer/faster methods - and many are low/negative cost. No need to tie up $ for months waiting for repayments to arrive.