To those familiar with how microfinance normally works, Zidisha represents a sea-change. Not only does it allow foreign lenders to lend to and interact with borrowers directly, it goes on to challenge many of the traditional assumptions of how microfinance should be done.
Can borrower credibility be sufficiently established without direct person-to-person interaction? Yes.
Can borrowers be trusted to repay their loans without regular visits from a loan officer? Yes.
Can a microfinance institution without physical presence on the ground -- no headquarters, no branches, no staff -- maintain the required credibility among clients to insure high repayment rates? Yes.
These are huge questions, and until Zidisha, they were nearly universally assumed to be impossible. Zidisha has proved each of those assumptions wrong, and in the process has been turning microfinance lending on its head. Though Zidisha is still small and young, it is already starting to inspire traditional microfinance institutions to experiment in this direction. If successful, Zidisha's example can help the industry worldwide make their loans less costly and more flexible -- all to the benefit of poor clients.
Lenders and donors who participate via Zidisha are not only establishing closer links with borrowers in Kenya, Senegal, and elsewhere, but are also helping change the microfinance industry itself.