Thanks for commenting here. I wish you had asked for our side of the story before publishing these allegations.
I agree that flat rates should be compared to flat rates. It would indeed be misleading to compare Zidisha's flat interest rates with another microfinance provider's APR rates.
In my experience, flat interest and fee rates of over 30% are common in microfinance, and that was the basis for the comparisons I have made with the cost of Zidisha loans. It is hard to find reliable data on the average APR of microloans worldwide, because many microfinance organizations underreport the full cost of their loans, and those that do opt for full disclosure on sites such as Microfinance Transparency and the MIX Market tend to be those with the lowest rates.
Thanks for commenting here. I wish you had asked for our side of the story before publishing these allegations.
I agree that flat rates should be compared to flat rates. It would indeed be misleading to compare Zidisha's flat interest rates with another microfinance provider's APR rates.
In my experience, flat interest and fee rates of over 30% are common in microfinance, and that was the basis for the comparisons I have made with the cost of Zidisha loans. It is hard to find reliable data on the average APR of microloans worldwide, because many microfinance organizations underreport the full cost of their loans, and those that do opt for full disclosure on sites such as Microfinance Transparency and the MIX Market tend to be those with the lowest rates.
This article provides a good overview of some of the complications involved in measuring the cost of traditional microfinance loans: http://blog.givewell.org/2010/04/02/microfinance-interest-ra...