Thinking Outside the Box

Rachel profile

By Betsy Ramser Jaime

“My dad encouraged me to think outside the box and start farming,” says Rachel Wanjiru Njuguna. As a wife, mother, recipient of a Marketing Management diploma and a current Accounts Clerk, Rachel is now able to add farmer and entrepreneur to her list of titles and accomplishments. Growing up with 4 siblings and the daughter of a farmer, Rachel was always impressed that her father was able to educate all 5 of his children through his farming business. Now, as an adult, her father has become an incredible mentor to her as she follows in his footsteps.

However, the path was not always easy. In 2011, she gave birth to her son and decided to stay at home with him. This was a difficult decision because her husband’s income was quite small. She says, “I started saving from the money he left me for daily use. I joined women’s groups and this has really helped me to save and support my family. From this experience, I have become very passionate about women’s empowerment and I really encourage the women I interact with to save and work hard. I hope one day to have an organization that supports women.”

Through her hard work and consistent savings, Rachel began her potato farming venture with a single acre. Then, the next year she was able to add another acre. She chose this particular venture for two reasons. Firstly, because of her experience growing up on a farm she has seen how farming can change lives and can be very profitable when done correctly. In addition, potatoes are a crop that are always in demand in Kenya. To begin, the typical costs involved: seeds, fertilizer, labor, and pesticides. She also chose to start this business to be able to educate her son, provide good medical care for her family, reinvest, and use part of the profits for household expenses. Eventually, she hopes to farm more than 50 acres.

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For her first Zidisha loan, Rachel began with a modest amount of $50 in January 2015 for her basic startup costs. After successfully repaying her first loan, she funded her second loan of $121 in April 2015 to buy fertilizer to top dress the potatoes. She knew that this would require 3 bags of DAP for $28 and 3 bags of UREA for $26. After her second loan, Rachel knew that she was ready to expand her acreage. Therefore, she used her third loan in August 2015 to acquire 3 more acres of land at $80 an acre for a $240 investment. As she grew her acreage she was even able to hire 5 additional workers by October to help with her farming.

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Then, in January 2016, she applied for her fourth loan of $365 to continue fertilizing and top dressing her crops. To start the new year, Rachel reported to lenders the following update, “I would like to thank the Zidisha family. You have really changed my life. 2015 was a good year for me because of your support. You should know that you are a blessing to many and you have improved so many lives. My financial status has improved and I am able to assist my husband in taking care of the bills. I have also been able to start a business supplying charcoal to a few hotels in my area and also selling to the people who use them at home in small quantities. With the charcoal business I was able to employ one person who helps me in running it as I attend to my 8 to 5 job. Thanks a lot for your support.”

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Throughout her farming journey, Rachel has been able to seek wise counsel from her father with his 30 years of experience in the farming industry. She notes that, “with his help I have been able to improve a lot and get knowledge about farming.” By May 2016, Rachel found that she was ready to expand to include other crops such as, peas. With her growing expertise, she was able to fund her fifth Zidisha loan of $554 to buy seeds and fertilizer for her new crops. Then, she funded for sixth loan of $815 in October 2016 to lease farm land and to continue purchasing fertilizer and pesticides for her business. To show what a difference this has made Rachel mentioned, ‘the loan I have just completed has really helped me invest more. I have been able to take an education policy for my son. That means my son will be able to get a good education and medical care. I have also been able to start saving for a plot and that means I will be able to build a home for my family.”

Rachel with her son

2017 continues to be an impressive year for Rachel. On March 29 she shared on her discussion page, “when I started with Zidisha I was doing potato farming. At the moment I have managed to start two more businesses which help me with my day to day expenses. This year my son is in a new class and as the school fees goes up I am able to pay without any difficulty.”

Most recently, on April 7, Rachel updated lenders with the news that she will next be expanding to cabbage farming. She mentioned, “the money I get from this harvest will help me greatly in achieving financial freedom in so many areas. Thank you lenders for trusting me with your money. A special thank you to the lenders who have funded me from my first loan. May God bless you all.”

Rachel Farm

If you would like to change the life of another family like Rachel’s, head on over to our loans page to contribute to another project.

Creating a Beautiful Life With Beauty Products

Ruth profile picture

By Betsy Ramser Jaime

Ruth James was raised in a family of farmers in Meru county, Kenya. As the fifth of six children she is proud that her parents were able to educate their children through farming. Her high marks in school led her to finish high school and then university where she pursued a degree in Information Technology. Even with a wealth of knowledge and a prestigious degree in hand, Ruth found finding a job to be extremely difficult. When the job search proved futile, she decided to embark on the journey of entrepreneurship. After committing to the path of entrepreneurship she chose her niche selling health and beauty products. According to Ruth, “I chose this business because it requires a small capital investment and minimum overhead.”

One of the marks of a successful entrepreneur is the ability to pivot quickly and make changes when needed and Ruth has exemplified this in her business. In her almost 2 years with Zidisha, Ruth has funded and repaid 4 loans and is now successful working to repay her fifth.

Initially, when she first discovered Zidisha she set out to use her first $150 loan in August 2015 to purchase inventory and and to train new employees. Furthermore, she smartly realized that utilizing the internet could serve as a positive step for her business. By building and hosting her own website she would be opening up her customer base and would also be allowing her customers to purchase her items at their own convenience. With her second loan of $149 funded in February 2016, Ruth was able to purchase a variety of new products. More specifically, her inventory included: tooth gel, deodorants, perfumes, essential oils, skin care products, detox kits, vitamins and minerals.

By April of 2016, Ruth realized that she needed to prioritize the marketing and advertising side of her business. Therefore, she turned to Zidisha lenders to fund her third loan of $170. For this loan, Ruth was really transparent with lenders showing the exact breakdown of how she intended to spend her loan. Her purpose was to boost her online sales through purchasing a website design, hosting her own website, email marketing, blogging, and advertising. This loan breakdown came down to, $75 for designing and hosting her website, $20 for email marketing, $20 for blogging, $15 towards research, $10 to pay for ads, and 40 for a seller’s license. She chose to purchase the license in order to have her shop online with a popular E-commerce site.

The following loan of $360 in July 2016 was used to expand her growing business with inventory for both the local and international sides of her business. Additionally, she used a portion of this loan to pay for her website hosting for the year and to implement some paid ads.

Ruth's family

A few short months later, in September, Ruth kindly mentioned on her discussion board, “I am very grateful to my lenders because the loan has helped my business reach another level of profits because I have stock to sell and clients are happy.” A few weeks later she was able to report more great news, “Hi lenders. I am so far doing well in my business and I am so grateful to you all. I have managed to have my products online and I can deliver whatever my customers order on time. This month my sales have gone up by 40%. This has been triggered by the availability of products. Once again thank you very much and God bless you all. Long live Zidisha.”

With a budding local and international presence, Ruth continued to dream big with her plans for the future. For her, this meant plans to open a physical location for her store. Once again, Zidisha lenders were happy to accommodate and help fulfill this next dream with a funded loan of $539 in October 2016. She knew that opening her location would include some ongoing costs including: $300 for rent and a deposit every other month and advertising which she estimated at about $300 for the year. After opening the store and continuing with her advertising plan, Ruth estimated that she would be making a profit of $600 to $1000 each month.

To touch on how these financial changes have truly impacted Ruth and her family she noted, “this will uplift my living standard in that I will be able to give my four young children a better education and with time I can buy a piece of land where I will build a family house.I thank you very much my dear lenders and I will never let you down.” In March of 2017 she provided another update and mentioned, “I am very grateful to you all for the loan that I just finished paying. With the online advertisements, my sales doubled and I was able to make profits up to $600 per month. My children are well settled in school and all school fees are paid.I have been able to buy them revision books and give them the basics and also take them out for some fun.”

Ruth is now using her current loan of $899 in March 2017 to increase her inventory and purchase a secondhand laptop. The new laptop will certainly aid her in her blogging and advertising efforts. She is excited that she has been able to establish a network, her business is doing well, and she wants to thank the Zidisha lenders for their continuous support. Through the combined efforts of Ruth and Zidisha lenders, she has been able to build a beautiful life for both herself and her children.

If you would like to support and empower another entrepreneur, head on over to our Loans page to help another business and community thrive.

Cooking Up Success

Geoffrey

By Betsy Ramser Jaime

Geoffrey Wasike has been identifying problems and overcoming adversity for as long as he can remember. He is the fifth child in a family of six and when he was two years old his father passed away leaving his mother to raise all six children on her own. Even as a student, he seemed to have a knack for business and chose to study accounting in college.

Sadly, soon after successfully completing part one of the CPA exam, he experienced the loss of his mother. Understandably, the ensuing period was a difficult one and he found himself unable to continue with his studies. Utilizing his business education and passion for cooking which he had carried with him since childhood, Geoffrey decided to start a hotel business with outside catering services. However, he soon discovered that his business was lacking some necessary cooking equipment and he found that he did not have the capital to make these important purchases.

Fortunately, he discovered Zidisha. Since April of 2015, he has worked with Zidisha lenders to borrow and repay four loans in a timely manner and he is now repaying his fifth loan. In April of 2015, Geoffrey used his first Zidisha loan of $50 to purchase new equipment for his hotel and restaurant business. Shortly thereafter, in June and August he used his second and third loans from Zidisha of $94 and $171 to purchase new Sufurias, which are large, deep pots. He previously had to rent pots and equipment for his catering work and he knew that owning his own equipment would increase both his efficiency and profits.

Geoffrey New Staff

Then, in November 2015 Geoffrey was able to use his fourth Zidisha loan of $342 to correct a significant source of losses in profit, by purchasing a refrigerator. Because he did not have a source of refrigeration, he was often forced to throw away food. Once again, he quickly realized that the long-term benefits in both time savings, and increased profits and growth would make a refrigerator a wise investment. This in fact proved to be true as Geoffrey mentioned in an update, “the last loan you gave me has tremendously changed my life because nowadays my hotel is the only point where people can find cold drinks. While I used to sell between 10 to 15 bottles of soft drinks, nowadays, I sell between 70 to 100 bottles a day. Besides the increase in the sales of soft drinks now my food remains fresh for a couple of days because it stays under refrigeration.” Each change and innovation to his business has proven to be well-thought-out as he was also able to increase his staff from 4 to 7 employees as of September 2016 due to the surge in business.

Geoffrey’s most recent loan from Zidisha was in November 2016 and with his $766 from lenders he has purchased high quality metal tables and chairs for the hotel restaurant side of his business. He found that the plastic chairs that he had in the past broke regularly, which meant that he was continuously spending money on new chairs. He also found that when a heavier customer broke a chair it was an embarrassing situation for both parties. With the purchase of higher quality seating, Geoffrey can maintain an environment that is comfortable and will be sustainable for years to come.

Geoffrey is highly regarded among his lenders and he is quick to thank the Zidisha community for their continuous support and encouragement as he mentioned in a previous update, “may I thank you so much because with the money you sent me I managed to rent a nice business room which has greatly improved my business.”

Geoffrey New Tables

In addition, as of March 2017 Geoffrey was excited to report, “thanks Zidisha team for your continued support. I’m writing to inform you that my business is going on well. Everything around me is on the right track. I recently was forced to increase my staff arising from the increased number of customers visiting my restaurant. Thanks once again Zidisha team.”

Geoffrey's Sons

Geoffrey has also been able to use part of his profits to pay for his children’s education. He is so thankful that because of his business he does not struggle to pay school fees for his two boys. He noted that earlier on his children had attended a crowded public school but as a result of his business, he is now able to send them to a private school where they are able to receive a high quality education. One of his sons would like to become a doctor and the other dreams of being a businessman. Through the success of Geoffrey’s business and his perseverance, and care for his family, it is clear that the whole family has a strong future ahead.

If you would like to help change the life of another entrepreneur, head on over to our loans page to contribute to another project.

Celebrating 2016

By Julia Kurnia

2016 was a record-breaking year in so many ways.  Here are just a few of the highlights:

Number of loans funded: 21,846

Thanks to you, over 20,000 entrepreneurial dreams became a reality in 2016.

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Love, a widowed mother in Ghana, teamed up with Zidisha lenders to start a jewelry design business to support her family.

Love, a widowed mother in Ghana, teamed up with Zidisha lenders to start a jewelry design business to support her family.

 

Our loan cost ratio: 4.95%

In an industry where loan cost ratios of over 30% are the norm, we spent less than 5% of the value of loans funded on overhead and operating costs, such as money transfer fees, web development services and salaries.  Our lean web-based lending model means profits from the loans stay in the borrowers’ communities, rather than going to pay the lender’s overhead costs.

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This girl in Kenya is attending a quality school, thanks to profits generated by her mother’s Zidisha-funded peanut butter business.

 

Loans funded with a $100 lending account: $300

Thanks to recycling of repayments into new loans, a Zidisha lending account funds many times its original value in loan projects.

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A $194 loan was all Irwin needed to start a mushroom farm in Sulawesi, Indonesia.

A $194 loan was all Irwin needed to start a mushroom farm in Sulawesi, Indonesia.

 

Contributions to loans in Haiti: 986

Zidisha lenders were among the most rapid sources of resources to help people in Haiti rebuild their livelihoods after Hurricane Matthew.

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Zidisha lenders funded Lekol Haiti, a social enterprise that brings IT education to Haitian schools.

Zidisha lenders funded Lekol Haiti, a social enterprise that brings IT education to Haitian schools.

 

Number of borrowers who donated their time to coach new Zidisha members in their countries as Volunteer Mentors: 735

Volunteer Mentors are experienced, high-performing borrowers who mentor up to fifty new borrowers on how to successfully participate in the Zidisha community.

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Volunteers from around the world: 132

Our internationally distributed volunteer team handled everything from processing loan disbursements to sharing our most inspiring entrepreneur stories in social media.

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Number of Impact Investment Funds created: 238

We opened growth-enabled Impact Investment Funds to the public at the end of the year.  Over 200 new funds have since been created!

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Jude used his loan to scale up his clean drinking water distribution service.

Jude used his loan to scale up his clean drinking water distribution service in low-income neighborhoods of Ghana.

 

Installs of our new mobile app for borrowers: 4,988

We launched our first-ever mobile phone app in ten borrower countries in November, tapping into the recent spread of affordable smart phones in developing countries.

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Entrepreneurs profiled in our new Instagram page: 25 (and counting!)

To celebrate the rich diversity and inspiring accomplishments of our community, we’ve just inaugurated an Instagram collection featuring entrepreneurs’ stories in their own words. (Follow it here.)

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2016 has been our best year ever.  Help us make 2017 even better!  Make a loan to an entrepreneur today.

 

This school in Kenya is raising funds to build a classroom.

This school in Kenya is raising funds to build a classroom. Help them reach their goal!

Zidisha team spotlight: Alejandra, Operations Coordinator

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By Julia Kurnia, Director

One of the most inspiring things about the Zidisha community is that volunteers are at the center of our operations.  Volunteers undertake an incredible range of tasks: loan payment processing, borrower application review, email and SMS support in four languages, accounting reporting, sharing entrepreneur stories in social media, and more.  It is no exaggeration to say that without the generosity of volunteers, Zidisha would not be possible.

Our volunteer team is a collection of extraordinary people, who work from their own locations all around the world.  We have profiled a number of them in this blog.  Today, I’d like to highlight the contributions of our volunteer Operations Coordinator, Alejandra (“Ale”).

Ale joined us in August of this year, and it’s already hard to imagine Zidisha without her.  I’m inspired every day by the immense impact she has on the world and the joyful, giving way in which she lives.

As Operations Coordinator, Ale is responsible for welcoming and orienting new volunteers, organizing the volunteers into teams, and ensuring that everyone has the resources and information they need to participate successfully.   She has transformed the volunteer experience at Zidisha, by setting up a Slack room for our communications, and introducing fresh ideas like video introductions of new volunteers and group birthday cards.

As if that weren’t enough, Ale has taken on the additional project of bring Zidisha loans to her home country of Mexico.  Thanks to her, we are almost ready to begin disbursing the first loans there.  If our lending program grows in Mexico the way it has in other countries, her hard work will make it possible in time for thousands of people to access life-changing loan opportunities.

I managed to persuade Ale to take enough time off from her many activities to provide an interview, reproduced below.  It’s a rare chance to get to know one of the remarkable people at the heart of our community.

How did you hear about Zidisha?

I read about Zidisha in Y Combinator, they provide seed funding for startups, and they started applying their model to non-profits. Zidisha blew my mind by putting together the power of the internet with no interest loans.

With Zidisha I realized that lending money with no interest rates instead of giving handouts dignifies people.

What sort of activities have you done since you started volunteering with us?

My responsibility is that operations run smoothly and in order to do this I have been involved in activities ranging from helping our volunteer accountants with monthly accounting reconciliations to distributing duties among all volunteers. I have been responding to borrower emails, disbursing loans, entering repayments, reviewing new borrower applications, translating, helping volunteers through email by answering their questions and providing orientation to join a particular team. My work is motivated by helping our entrepreneurs.

The day I joined Zidisha I was curious to meet the amazing volunteers, I was also lucky to join the Ghana Payment team and quickly started disbursing hundreds of loans to entrepreneurs. One of my favorite tasks is talking to volunteers and thinking of ways to improve our daily work. We come up with proposals to spend our time more efficiently helping entrepreneurs.

Do you have a favorite Zidisha entrepreneur story?

My favorite story is the first loan that Zidisha ever gave, when I tell people about it I can see tears in their eyes. We disbursed our first loan to a Masai nomad in Kenya who wanted to buy cattle, he was a day away from a bank but had mobile phone with M-PESA, a money transfer service Zidisha used to send him the money.

To tell you the truth I easily fall in love with all our entrepreneurs. I enjoy reading all the stories, special from women. I can vividly remember they day I joined Zidisha as a lender, I remember choosing Rosine Sanogo from Bobo-Dioulasso, Burkina Faso. She was born in a polygamous family with more than 10 children, she’s single with three children. I gave her money for her second loan, she sells shoes door to door her daily profit is $20 USD. Rosine’s customers enjoy buying shoes without leaving home.

What do you like to do in your free time?

I enjoy walking in the forest, I dive at least once a year, my favorite activity related to nature and the ocean is swimming with whale sharks in Holbox, Mexico.   

I love volunteering for different organizations.  In the winter time I work with my church to bring Christmas dinners to unprivileged communities. The rest of the year I’m involved in catholic retreats for prison inmates.

Introducing Impact Investment gift cards

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Looking for an interesting gift for someone who already has everything?

Our new Impact Investment gift cards let you give a growth-enabled Impact Investment lending fund to a friend or loved one with just a few clicks.  Here’s how it works:

  • Select a card of any amount and print or email instantly.
  • Your recipient can choose entrepreneurs to fund, or allow us to distribute the amount to fundraising projects.
  • Your gift keeps on giving as repayments are relent to new projects.  A $50 gift card funds $750 worth of loans in five years!
  • A portion of the 5% service fee paid by all Zidisha borrowers is reinvested in your recipient’s lending fund with every loan, so that its value can grow over time.

Learn more and purchase gift cards here:

https://www.zidisha.org/lender/gift-cards

 

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Introducing Impact Investment Funds

Our new Impact Investment Funds let anyone open a growth-enabled donation lending account.

Impact Investment Funds work just like regular lending accounts, in that 100% of the lending funds you upload, and their repayments, go to your chosen entrepreneurs.  In addition:

  • A portion of the 5% service fee paid by all Zidisha borrowers is reinvested in the account with every loan funded, so that its value can grow over time.
  • Lending funds paid into the account are tax-deductible as charitable donations in the United States.
  • Impact Investment accounts include a Lending Fund Value page, which tracks changes in the value of the fund and its outstanding loan portfolio.

 

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Who should open an Impact Investment Fund?

Impact Investment Funds are intended for anyone who would like to make a charitable donation and watch its impact grow over time.  (The average $50 lending account funds over $750 worth of loan projects in five years!)

Is this a financial asset?

No.  All funds paid into an Impact Investment Account are considered charitable donations to be used only for funding loans, and cannot be withdrawn.

Why are withdrawals not enabled for Impact Investment Funds?

Since Zidisha is not an investment broker, US securities regulations do not allow us to offer revenue-generating financial investments to the public.

How are Zidisha’s costs covered, if it is returning service fee income to the Impact Investment Funds?

Our costs are covered separately by the portion of the 5% service fee not credited to the Impact Investment Funds, and by optional tips from lenders.

Why not reduce or eliminate the 5% borrower service fee, instead of crediting part of it to lending funds?

Our founding purpose is to reduce the cost of microloans in the world’s poorest places, where interest rates upwards of 40% are common.  That said, we believe it is optimal for entrepreneurs to pay a modest cost for loans, because it helps prevent dependency on subsidized services, and encourages entrepreneurs to invest in revenue-generating projects.  In addition, returning the service fee revenue to lending funds increases the capital available to other deserving entrepreneurs over the long term.

How much of the service fee is credited back to Impact Investment Funds?

Currently the full 5% service fee received for every loan (or portion of a loan) funded by an Impact Investment Fund is credited to the fund at the time the loan is disbursed.  This may change in the future, depending on how large a percentage of loans are funded by Impact Investment Funds.

Are Impact Investment Funds guaranteed to grow over time?

No: Impact Investment Funds are subject to the same risks as other Zidisha lending accounts, including currency exchange rate fluctuations and non-payment by borrowers.  Reinvesting service fee revenue is intended to help counterbalance these risks and make fund value growth possible, but does not guarantee it.

How do I open an Impact Investment Fund?

You may convert an existing withdrawable lending account to an Impact Investment Fund in the Account Preferences page.

To open a new Impact Investment Fund:

  1. Go to www.zidisha.org.
  2. Use the “Sign Up” link to create an account.
  3. Go to the Account Preferences page and choose the Impact Investment Fund option.

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