A microfinance nonprofit has secured Silicon Valley funding by offering small, poverty-fighting loans through a peer-to-peer online platform rather than using traditional finance tools, writes The Wall Street Journal. After the start-up incubator Y Combinator began accepting nonprofits last year, Zidisha participated in the program and has since raised about $234,000 in donations from the tech community.
Zidisha has brokered more than $1-million in loans to thousands of mostly African micro-entrepreneurs and has a 90 percent repayment rate, according to the Journal. The organization's office-less structure keeps overhead and borrowers' costs lows. Founder Julia Kurnia said traditional charities and foundations from which she sought funding advised setting up physical loan offices, but she believed the spread of social media in Africa would make an online platform feasible, an idea that resonated in Silicon Valley.