Opportunity International and MyBucks: The Future of Digital Microfinance?

nextBillion, 21 June 2016

Co-authored with Gabriela Erice Garcia, e-MFP

Back in November 2015, a press release briefly made the rounds, announcing that “Opportunity, Inc. . . . has entered into a share purchase agreement to sell six banks serving sub-Saharan Africa to the MyBucks Group, a Luxembourg-based financial technology (fintech) company.” This generated some comments on LinkedIn and a blog by consultant Hannah Siedek, who recognized how unusual a deal this was and wondered if she should consider it “a good (or not so good) operation.” But aside from this, reaction has been surprisingly muted.

By all accounts, this should have been bigger news for the microfinance sector. One of the major microfinance networks selling six subsidiaries to a fintech startup, and doing so in sub-Saharan Africa – the global hub of innovation in mobile banking. At a time when technology and mobile money are the talk of the sector, how does a story like this pass under the radar? more →

Can borrowers be trusted to reschedule their own loans?

Financial Access Initiative, 13 September 2012

I have written before how tiny Zidisha Microfinance is challenging long-held assumptions by leveraging internet social media and mobile payments like M-PESA to lend to clients without the help of loan officers or local staff.  Since then, Zidisha has grown from tiny to small, with a portfolio now at $200,000, over 430 active borrowers, not to mention its 1400+ lenders.  And, as before, its operations remain solid, with PAR30 at a respectable 6.6%[1] (check out its stats for more).

I’ve been advising Zidisha since before its launch in 2010, and with that had the opportunity to watch the evolution of the platform’s many innovations.  One feature, introduced in August 2011, allows borrowers to request to reschedule their loans, regardless of whether they are delinquent or not.  more →

Microfinance without the MFI? Zidisha tests the boundaries of microlending methodology

Financial Access Initiative, 5 July 2011

What does a microlending operation look like?  Well, it may be a bank or an NGO (and many others in between), it probably has some branches, branch managers, loan officers.  The funding of the MFI may come from deposits or from debt, whether from a local or foreign institution, including from online platforms such as Kiva.  There may be variations on these themes, but that pretty much describes microlending as we know it.

What if you took all that away – the branches, the loan officers, the institutional funders?  Could the lending still work?  Well, one model is that of Zidisha Microfinance, an online lending platform that connects lenders in (mostly) developed countries with borrowers in developing ones.  And, unlike Kiva, the connections are real – borrowers create their own online profiles, post their own loan applications, and make their own repayments.  They also post their own comments, as do the lenders.  There is no local MFI intermediary – it is literally the first true person-to-person (P2P) microfinance lending platform in the world. more →