Traditional microfinance institutions must often charge borrowers interest rates of over 30% just to cover their operating costs.
Zidisha’s direct person-to-person lending model is dramatically more efficient. In the last quarter (October – December 2012), our members funded $252,666 worth of loans – and our operating costs were just 8.9% of the value of the loans funded through our platform.
Here is a breakdown of our costs over the October – December 2012 quarter:
| PayPal / Bank Fees | $6,514 |
| Phone / Skype | $220 |
| Background Checks for New Borrowers | $1,427 |
| Website Maintenance and Development | $2,961 |
| Payroll / Taxes / Health Insurance | $11,343 |
| Total Expenses | $22,465 |
Our members finance these expenses through program fees and optional donations. Here is a breakdown of the revenue we raised in October – December 2012:
| Donations | $12,730 |
| Borrower Registration Fees | $5,888 |
| Borrower Service Fees | $3,683 |
| Lender PayPal Fees | $5,696 |
| Total Revenue | $27,997 |
What do you think about our use of funds? Would you like to know more about our revenue or expenditures? Please leave a comment to share your perspective.
I would not mind adverisement on Zidisha. The best case would be relevant and hand picked advertisement, but I would not mind google-ads too.
The first thing I would like to see Zidisha spend more money on are background checks and check ups in general.
I agree with Rotterdammer. AdSense would be a great income source for Zidisha.
Have an automated system that bids 1 dollar on all active loans at the maximum interest rate.Click more fo2,..3..dollars etc.This could encourage newbies to get started without having to decide who to lend to.This would diversify risk.It would also benefit those seeking lower amounts and stop people discriminating on grounds of appearance in the photos.
I disagree with the advertising idea. One reason I like Zidisha that because it’s simple, efficient and free of ads. Although ads seem like a good idea, the fact is that wherever funding comes from (even if it seems from harmless, even profitable ads), these affect the direction and decisions of the organization. I’m afraid that it would draw some of Zidisha’s focus and energy of the one thing it aims to do — peer2peer microfinancing for the benefit of the less fortunate.
As it is, the revenue is keeping Zidisha well over-budget. I’ve seen many such statements from other charities. The good ones usually just break even. Zidisha’s state of finances show both lean, mean, attractive management AND strong support from financiers, meaning that the organization is hitting the mark with its goals.
I like the revenue system and the fundraising system just the way they are.
Well done, strength to the Zidisha team and keep up the good work!