Introducing Zidisha - Netherhall Sixth Form Micro-Financing ClubUpdate - 21 July
Zidisha Update - 21 July 2017
The Netherhall Zidisha Micro-Finance Club continues to go from success to success as the academic year draws to a close. Most recently, Zidisha students visited the headquarters of ARM Holdings to summarise their performance this year after ARM funded the club with a very generous £500 donation.
Jahida Hoque, Javier Fernandez, Samiha Yasmin, Romana Ali, and Unnah Mudzana all presented to Simon Humphrey and Rosalie Tribe at ARM in order to feed back to them the results of the club. Through Zidisha, Netherhall has now supported 84 entrepreneurial projects and funded loans worth over $930US to developing economies around the world.
Simon Humphrey of ARM Holdings said, “It’s great to see students developing their skills beyond the classroom environment while helping others to achieve their life goals. The Zidisha students have clearly valued the experience while using technology to address socio-economic challenges in the world, something ARM is passionate about supporting in today’s global village.”
The club meets weekly where each of the students approves small loans of approximately $10US to fund applicants who have posted profiles of their backgrounds and businesses on the Zidisha website. The loans are interest-free and provide access to finance that these businesses would otherwise struggle to obtain. The students must consider the potential economic benefits of providing each loan and weigh these against the risks of non-repayment and currency fluctuations which could result in financial loss to the club’s capital.
The Zidisha Micro-Finance Club will continue to grow next year when the current students become consultants to the new Sixth Form intake and potentially expand the club into GCSE Business and Economics. Please see www.zidisha.org for more details.
This year a group of Sixth Form students have begun managing a pilot project that has a real potential to leave a legacy of improving the lives of entrepreneurs in developing countries. The group has been financed initially through their own fundraising activities, as well as a very generous donation of £500 from ARM. Zidisha is an online platform where individuals and groups from around the world can make zero-interest loans as small as 1 USD to small businesses in developing economies. These entrepreneurs would otherwise not have access to loan capital to grow their businesses through traditional banks, due to the small size of the loans issued.
The Netherhall group consists of six students, each of whom currently manages a portfolio of 5 USD loans that they have chosen from approved Zidisha applicants, in a field related to their future career ambitions. Romana Ali is in charge of our Health and Beauty portfolio, Javier Fernandez runs the Transportation and Home Supplies portfolio, while Zainab Yasmin looks after the Farming and Livestock portfolio. Jahida Hoque manages the Clothing Production and Clothing Sales portfolio, Ellen Groom runs the Outside the Box and Entertainment portfolio, while Unnah Mudzana runs the Education and Online Freelancing portfolio.
Despite being zero-interest loans, Zidisha boasts a very high repayment rate of 86.4%. However, each Netherhall Portfolio Manager must carefully choose from many applicants according to certain criteria and be willing to accept the risk that applicants may not repay the full value of the loan. There is also a risk of loans not being repaid in full value due to currency exchange rate fluctuations.
Health and Beauty Portfolio Manager Romana said, “I would like to pursue a career in the field of Medicine and I’ve been able to see how small businesses in other countries struggle to access medical supplies. It’s very rewarding to see how our funds have helped. My current favourite applicant is Paul Hodji who Netherhall helped fund in order to purchase an inventory of supplements and health products”.
Ellen Groom came up with the idea of members becoming Portfolio Managers because, “…it was easiest to just divide up the applicants and search for ones we were interested in and it made it relevant to our post-6th Form ambitions”.
The group is run through the Business and Economics Department. Mr Fraser, who administers the group, is amazed at the progress made so far. “I researched the different websites available and chose the one I felt was the most socially responsible, but it was the students who really steered this into taking the shape of a mini-investment club. So far we’ve lent out over $600 US to help fund over 50 different projects”.
Mr Driscoll, Lead Teacher of the Department says, “I highly value the idea that Netherhall students are making a real difference in the world. Zidisha is a wonderful opportunity for students of any subject to access the Micro-Finance model of Development that is currently evolving in International Business and Economics”. Is there a chance that the group could lose everything and never be repaid? “Of course!” says Javier, “but that’s what makes it so interesting”. Fortunately, there is a members’ fund should any early mistakes be made, but it really comes down to each student taking responsibility, just as a bank manager would, to ensure that the applicants they choose to lend to are the most likely to benefit, whilst also being the most likely to repay.
Stay tuned to the Netherhall website for further details, or check out www.Zidisha.org for more.