Help me distribute $100,000 to new entrepreneurs in Africa • Hacker News Board

Re: Help me distribute $100,000 to new entrepreneurs in Africa

#31

Post by yummyfajitas » Mon, Mar 03, 2014, 7:13 PM UTC

David wrote: post #8

jkurnia wrote: post #2

Dear all - I'm Julia, the founder of Zidisha. I'd welcome comments and questions from anyone who would like to learn more about our P2P microlending platform. If you'd like to hear more about my own journey and the experiences that lead to the founding of Zidisha, see http://www.huffingtonpost.com/julia-kurnia/why-i-founded-zid...

In the Huffington Post article, you wrote: "Years of working with NGOs and government aid programs were convincing me that handouts are a dead end, temporarily soothing the acuteness of the injustice but taking donor and recipient down a path of dependence that ultimately makes the international wealth divide even wider." Do you feel that way about a universal basic income? Does your statement only refer to single-re…

In the pilot studies, about 10% of people who would otherwise be working choose not to work and instead become dependent on the BI. So the BI pilot studies do agree with Julia's impression.

https://decorrespondent.nl/541/why-we-should-give-free-money...

Re: Help me distribute $100,000 to new entrepreneurs in Africa

#32

Post by jkurnia » Mon, Mar 03, 2014, 7:14 PM UTC

phantom_oracle wrote: post #29

Interest is the worst thing you can use in a continent like Africa. Why didn't you guys opt for the profit-sharing philosophy? Contract laws in some countries can turn some entrepreneurs insolvent because of interest, but profit-sharing won't have such a devastating impact. I'd help, but not under compound interest restrictions.

Hi phantom_oracle, we've investigated profit-sharing models, and consulted with some experts in Islamic microfinance about the feasibility of implementing a profit-sharing form of financing for Zidisha. This was attractive to us because it addresses the unfairness of being left to repay a debt when one's business investment has failed.

We did not end up introducing profit-sharing at Zidisha because even in consultation with experts, we did not manage to come up with a viable way to ensure the profit verification on which this model rests. Zidisha is purely an online service, without local loan officers, and our understanding is that applications of profit-sharing models to microfinance rely on extensive personal monitoring of the funded businesses.

Re: Help me distribute $100,000 to new entrepreneurs in Africa

#33

Post by nowarninglabel » Mon, Mar 03, 2014, 7:14 PM UTC

jkurnia wrote: post #27

nanijoe wrote: post #23

I find the effort here commendable, but it will probably not take a very long time for these guys to realize that "Africa is not a country" . I'm Nigerian, and I have been to a few African countries. First of all the challenges you have to overcome while doing business in Nigeria alone, varies wildly from one City to another. Now comparing that to East Africa for example, the difference is night and day. It may serve…

Hi nanijoe, we have not yet had the chance to offer a program in Nigeria, but hope to soon. We chose Kenya as the first country to pilot Zidisha, largely because it was the world leader in mobile phone-based payments, which we use to disburse the loans and receive payments electronically. Also, internet and Facebook penetration was especially high in Kenya, and that made it easy for many people to adopt and share our…

Julia,

One thing to note is Kiva has been doing direct lending in Kenya for about 2 years now using M-PESA via Kiva Zip. Zidisha still has some differences, but I'm surprised at the confrontational tone a lot of Zidisha posts have taken towards Kiva. We're both trying to solve some of the same problems, would be great if instead of negativity, we could work together on doing that, share learnings etc. Anytime I get the chance, I share learnings or offer to help Watsi, and I'd like to think I could feel the same way towards Zidisha.

Re: Help me distribute $100,000 to new entrepreneurs in Africa

#34

Post by marquis » Mon, Mar 03, 2014, 7:15 PM UTC

jkurnia wrote: post #27

nanijoe wrote: post #23

I find the effort here commendable, but it will probably not take a very long time for these guys to realize that "Africa is not a country" . I'm Nigerian, and I have been to a few African countries. First of all the challenges you have to overcome while doing business in Nigeria alone, varies wildly from one City to another. Now comparing that to East Africa for example, the difference is night and day. It may serve…

Hi nanijoe, we have not yet had the chance to offer a program in Nigeria, but hope to soon. We chose Kenya as the first country to pilot Zidisha, largely because it was the world leader in mobile phone-based payments, which we use to disburse the loans and receive payments electronically. Also, internet and Facebook penetration was especially high in Kenya, and that made it easy for many people to adopt and share our…

Kenya is also fairly unique on the continent, outside of South Africa, in that you can access pretty good internet. We pay attention to emerging markets for online services and we've noticed recently that Kenya is coming up strong in terms of demand.

Re: Help me distribute $100,000 to new entrepreneurs in Africa

#35

Post by paul » Mon, Mar 03, 2014, 7:20 PM UTC

nanijoe wrote: post #23

I find the effort here commendable, but it will probably not take a very long time for these guys to realize that "Africa is not a country" . I'm Nigerian, and I have been to a few African countries. First of all the challenges you have to overcome while doing business in Nigeria alone, varies wildly from one City to another. Now comparing that to East Africa for example, the difference is night and day. It may serve…

Obviously Africa is a huge and incredibly diverse place, but listing all of the countries in which Zidisha is currently working in the headline is kind of impractical. Julia (the founder of Zidisha) certainly isn't naive to the realities of working in Africa either -- you can read more about her experiences at http://www.huffingtonpost.com/julia-kurnia/why-i-founded-zid... and she's also responding to questions here as "jkurnia".

Re: Help me distribute $100,000 to new entrepreneurs in Africa

#36

Post by mcherm » Mon, Mar 03, 2014, 7:27 PM UTC

ghouse wrote: post #16

"Distribute" or "Invest"?

Well, Zidisha appears to mix those two.

Lenders are encouraged to charge an interest rate they find acceptable, but the average interest rate is lower than the default rate... so that means lenders (as a whole) are losing money! This would not be a particularly good investment, but it may be an excellent way to do donations.

- the lenders who select more reliable recipients and those who charge more will make more income, so I am sure many lenders are actually making a profit even if the sum total of the loans by Zidisha is not.

Re: Help me distribute $100,000 to new entrepreneurs in Africa

#37

Post by jkurnia » Mon, Mar 03, 2014, 7:33 PM UTC

nowarninglabel wrote: post #33

jkurnia wrote: post #27

Earlier quoted context omitted.

Hi nanijoe, we have not yet had the chance to offer a program in Nigeria, but hope to soon. We chose Kenya as the first country to pilot Zidisha, largely because it was the world leader in mobile phone-based payments, which we use to disburse the loans and receive payments electronically. Also, internet and Facebook penetration was especially high in Kenya, and that made it easy for many people to adopt and share our…

Julia, One thing to note is Kiva has been doing direct lending in Kenya for about 2 years now using M-PESA via Kiva Zip. Zidisha still has some differences, but I'm surprised at the confrontational tone a lot of Zidisha posts have taken towards Kiva. We're both trying to solve some of the same problems, would be great if instead of negativity, we could work together on doing that, share learnings etc. Anytime I get t…

Hi nowarninglabel, I did publish a post last week comparing our service with Kiva Zip: http://www.huffingtonpost.com/julia-kurnia/zidisha-vs-kiva-z...

I wrote this to provide greater clarity to our users and the public, who frequently asked how our services were different. Some readers had the impression that the post was meant to attack Kiva Zip. That was not my intention.

In fact, Kiva Zip and Zidisha have helped each other, and exchanged lessons learned, for over two years now. See https://zip.kiva.org/blogs/4

Re: Help me distribute $100,000 to new entrepreneurs in Africa

#38

Post by notahacker » Mon, Mar 03, 2014, 7:36 PM UTC

David wrote: post #8

jkurnia wrote: post #2

Dear all - I'm Julia, the founder of Zidisha. I'd welcome comments and questions from anyone who would like to learn more about our P2P microlending platform. If you'd like to hear more about my own journey and the experiences that lead to the founding of Zidisha, see http://www.huffingtonpost.com/julia-kurnia/why-i-founded-zid...

In the Huffington Post article, you wrote: "Years of working with NGOs and government aid programs were convincing me that handouts are a dead end, temporarily soothing the acuteness of the injustice but taking donor and recipient down a path of dependence that ultimately makes the international wealth divide even wider." Do you feel that way about a universal basic income? Does your statement only refer to single-re…

The Namibia study is interesting, but it's essentially attacking a different problem from the one Kidisha aims to address (lack of access to relatively high sums by local standards to do specific things)

It's also unfortunately too short term and micro-scale to really address the main criticisms which are (i) prices of basic goods in short supply and ground rents will rise to the point very poor people are often not better off, and sometimes worse off (ii) trying to set the basic income sufficiently high to allow subsistence (which the Namibian study didn't) would cause massive economic instability even if it could effectively be funded (iii) without massive and relatively expensive administrative oversight, most of the money will be siphoned off by the corrupt in underdeveloped countries and regions and (iv) if you make payments for children you encourage even more excessive population growth and if you don't, families still suffer.

Re: Help me distribute $100,000 to new entrepreneurs in Africa

#39

Post by rhc2104 » Mon, Mar 03, 2014, 7:36 PM UTC

nowarninglabel wrote: post #33

jkurnia wrote: post #27

Earlier quoted context omitted.

Hi nanijoe, we have not yet had the chance to offer a program in Nigeria, but hope to soon. We chose Kenya as the first country to pilot Zidisha, largely because it was the world leader in mobile phone-based payments, which we use to disburse the loans and receive payments electronically. Also, internet and Facebook penetration was especially high in Kenya, and that made it easy for many people to adopt and share our…

Julia, One thing to note is Kiva has been doing direct lending in Kenya for about 2 years now using M-PESA via Kiva Zip. Zidisha still has some differences, but I'm surprised at the confrontational tone a lot of Zidisha posts have taken towards Kiva. We're both trying to solve some of the same problems, would be great if instead of negativity, we could work together on doing that, share learnings etc. Anytime I get t…

Julia has collaborated with Kiva in the past.

https://zip.kiva.org/blogs/4

Re: Help me distribute $100,000 to new entrepreneurs in Africa

#40

Post by rdl » Mon, Mar 03, 2014, 7:37 PM UTC

I love the idea, but I have one concern, which may or may not be real.

I think 5% is below market rate for what you are doing. By establishing 5% as the rate, you crowd out any local investment options which would need to charge above 5% (but not 60%). By making the subsidy non explicit, you make it even harder for local lenders to compete.

I don't know what a market rate for this kind of loan would be, but in the US, it would be more like 10%. Some kind of explicit discount due to social benefit or something like that, or marketing to launch a new business, or whatever, could make sense, but I really don't want to see the same situation where USAIS dumps free or subsidized goods and services and crowds out the local producer.

At the same time, sacrificing the (not yet extant) p2p lending sector in Kenya might be ok if it helps enough other businesses -- similarly communication and security being subsidized might be a net good.