Zidisha is a peer-to-peer microlending service that allows people to lend small amounts of money directly to entrepreneurs in developing countries.

[2] It is the first peer-to-peer microlending service to link borrowers and lenders across international borders without a local microfinance institution intermediary.

[4] The Zidisha website facilitates microlending transactions between individual web users worldwide and computer-literate, low-income entrepreneurs in developing countries.

After visiting Niger as Portfolio Analyst for the US African Development Foundation, Kurnia became disillusioned with foreign aid.

[8] In response, SEM's team stopped making new loans and focused on collecting funds from their existing borrowers.

[citation needed] If the loan is approved and successfully funded, first-time borrowers are charged roughly $12 (1000 Kenyan Shillings) to cover this cost of processing their application.

Upon joining Zidisha, borrowers also make a deposit into a reserve fund that is used to compensate lenders in the event of default.

[13] Zidisha used to contract with local partners to perform telephone-based verifications of each new borrower, but c. 2012 the organization discontinued this practice due to fraud, corruption and ineffectiveness.

The borrower is obligated to repay principal and interest according to the schedule proposed in the loan application (usually in weekly installments).

Throughout the loan application and repayment period, lenders may post comments and questions, and borrowers may supply additional information and business updates through a weblog on their profile pages.

If one of these loans falls behind on payments by 10 days or more, lenders may opt to receive a full reimbursement of the amount they lent from the reserve fund.

Lenders may post feedback on all lending transactions with which they are involved, thus creating a performance record that allows borrowers to request progressively larger loans with each successful repayment.

The tasks vary from email correspondence to borrowers and lenders, to disbursing loans, to translation and reviewing member user profiles.

Typically, peer-to-peer microlenders offering interest on loans to US lenders are regulated by the Securities and Exchange Commission (SEC).

[22] MYC4, a microlending marketplace focused on African entrepreneurs, similarly announced in 2010 that they are "not allowed to disburse money to North American Investors" because of SEC regulations.

Gifts are taxed in the United States, which would mean that for US lenders, the original loan principal, if withdrawn, would be subject to taxation.

Instead, they make a one-time deposit into a reserve fund upon joining Zidisha, and thereafter pay a service fee of 5% of each loan raised.

For example, Kiva, the world's largest microlending website, reports any loans not yet written off as repaid, even if they are still outstanding with the borrower.

[36] Some observers argued that Zidisha's writeoff policy is too strict, as it has often resulted in loans that are still actively repaying (but over six months late) as being written off.

[37] Zidisha has been a finalist and semifinalist for the Echoing Green foundation for early-stage social enterprises, and was an Ashoka Fellow nominee.