> Who are you?

Wrong tack. I offer this advice -- post a list of the inaccurate, misleading, or otherwise non-objective claims made in the original article, point by point, in a dry editorial fashion, without anything resembling a personal attack. In other words, take the high road, ignore the source, focus on the facts.

Remember that anonymous comment is almost a religious principle, a civil right, among Internet bloggers. To question the right of anonymous comment is a non-starter as a debate tactic.

This is a bad response — tactically, not morally. It's incongruent with the tone if the original post, which feels objective and even-keeled. It may be inaccurate or even dishonest (I don't know), but replying like this can only help the person writing these articles.

Watch, "Founder of Zidisha refuses to answer basic factual questions about their business and instead is trying to redirect attention to me. This is what I'd expect from a predatory lender put on the defense. They still have time to be honest with their customers before it seems too suspicious, though."

What if they're actually squeaky clean and then do post all their own personal info on top of saying something like the above? What if they have a stellar reputation in this space? Now you're in a real pickle.

My advice: don't pick fights your opponents benefit more from having. :)

Thanks for this advice. I've edited my original comment to focus on the content of the article.

I'm a long-time observer of microfinance who is an active participant in most of the lending/crowdfunding platforms out there, including yours. I'm also a hacker, and am excited about the way that tech is being used in microfinance and crowdfunding.  I think this stuff could have a big impact on the developing world, which is why I started this blog last month.  I'm slowly working my way through the topics listed here, some of which I hope will be of interest to HN readers:

http://modernmicrocredit.blogspot.com/2014/03/modern-microcr...

Zidisha just happened to be the first topic I started with.  My next article is going to be about revenue models in crowdfunding.  Some companies are using some dark design patterns in their revenue models, and I plan to cover that as well:

http://modernmicrocredit.blogspot.com/2014/04/revenue-models...

As I mention in the introduction to my article, I wasn't planning on writing a followup on Zidisha.  But then you responded to my last article by dramatically lowering your interest rates.  So I wrote a followup covering what that meant for lenders.

Like I said in the article, Zidisha shows a lot of promise, and I very much want the concept to succeed. But to do that, I think you need to start being more transparent about the problem you have with high loan loss rates.   I would love to see a long response from you regarding the article. I'd be happy to publish your response in the comments of my article, or even in the article itself.  If you have any corrections, I'd be glad to publish those as well.

Could you explain why you feel a need to post anonymously?

Thank you for writing the posts, I've enjoyed reading them. (And for what it's worth, I still feel positive about Zidisha's future after doing so.)

Thank you for responding here. I tried to post a response in your blog, but my comment was removed or not yet published.

lutusp is right - your comment comes across as aggressive and personally attacking, as if you did have something to hide. If you 'could write a long post explaining the many inaccuracies in this article', please do so! That way Modern Microcredit can edit their article if necessary to take it into account, and also, your lenders, who will undoubtably be reading the article, will see a polite and informative founder intent on setting the record straight rather than a quick-to-anger, quick-to-attack founder who doesn't bother to defend the company.

I noticed you just removed your Portfolio At Risk statistics completely (unless it was moved elsewhere)?

https://www.zidisha.org/index.php?p=43

The statistics page was also changed to only show lending statistics for loans disbursed in the last three months. As a result, new visitors will see the write off rate stated as 0%. These loans haven't had time to be written off, so that write off rate is always going to be 0%.

Meanwhile your all time write off rate is still 18.66%. That should be the statistic displayed to new visitors, not 0%.

Seems like you guys kinda just threw in the towel and said "fuck it, its for philanthropy"

Here's a better answer - Lending Club and Prosper both lost their shirts when they first entered the market, and now they are both making their investors money. It just takes time and, more importantly, data.

The microlending websites you mentioned have much higher repayment rates, so that there's a much smaller amount of portfolio actually at risk:

* Kiva: 98.95% repayment [1]

* United Prosperity: 97.8% repayment [2]

* Vittana: 95%+ [3]

* Kiva Zip: 88.8% [4]

* Zidisha: 74.19% [5]

I noticed that Zidisha doesn't publicize its low repayment rate (and the correspondingly high loss rate) very broadly - for example, on your frontpage.  If you did, your forums probably wouldn't be filled with comments like these:

"The long-posted 98% repayment rate left me with a bitter taste. I feel both deceived and stupid." - mewesten

"I think you will not care at all when zidisha folds and you will not care at all at all the lenders loosing all their money. You will pat yourself on the back at all the money given to borrowers and what good work you did giving away other peoples money. Is it legal what you are doing? These are funds provided by members of the public it is not your money." - Russell

"If the model is to be sustainable, lenders must surely be made to feel that their interests are taken into account. They may choose to act as if they are in fact not lenders at all but givers - but that is not your advertised model, and would soon run into the sand in any case." - Wiredfox

"Your vision for Zidisha as a marketplace like ebay was a surprise for me to read in the forum. There is no clear explanation of this on Zidisha’s website. The impression I have had from the website is that Zidisha is just like Kiva and the others, except for the comments and low interest. It never occurred to me that no one was reviewing the business loan applications. I assumed Zidisha was somehow doing this." - Evelyn

These are your own lenders talking.

I think that if you explored some of the ideas I mentioned (e.g. featuring the repayment rate and loan loss rate on the frontpage, and adding a mission statement to the frontpage as well), you would see less angry lenders like the above.

[1] http://www.kiva.org/about/stats

[2] http://www.unitedprosperity.org/us/risk_factors

[3] http://blog.vittana.org/scale-plan

[4] https://zip.kiva.org/

[5] https://www.zidisha.org/index.php?p=43

"The microlending websites you mentioned have much higher repayment rates, so that there's a much smaller amount of portfolio actually at risk."

There is a big difference between the repayment rates for ended, and portfolio at risk for currently outstanding loans. In order to have a complete picture, lenders should know the performance of currently outstanding loans as well as ended ones. Zidisha is the only microlending website I know of that provides statistics on the performance of the currently outstanding loan portfolio.

Even our statistics for ended loans are not defined in the same way as other websites. For example, I understand that Kiva expresses its repayment rate as 100% minus the writeoff rate, including as repaid loans amounts not yet repaid, but not yet written off. (http://www.kivafriends.org/index.php?topic=5791.0)

More importantly, I understand that Kiva allows field partners to cover repayments not actually made by the borrowers and report these amounts as paid on the Kiva website. (http://blog.givewell.org/2009/10/13/kiva-repayment-data/) These amounts are repaid in that lenders do receive the funds back, and I am not accusing Kiva of dishonesty. But the fact remains that substantially less than 98.95% of Kiva loans are repaid by the borrowers themselves.

I have lived with many low-income households in developing countries, and in my experience, cash availability of households without formal jobs, insurance, savings or social safety nets is not only limited, but highly irregular. It is simply not realistic to provide people under these circumstances enough capital to change their lives, and expect its repayment to obey a predetermined schedule with 98.9 percent accuracy. That is why I am skeptical of such high published repayment rates.

Zidisha's published rates are lower, but they do accurately reflect the repayment performance of the borrowers themselves. Comparing them with the statistics of intermediated microlending websites is misleading, because they are not measuring the same thing.

I have not managed to find information on how Kiva Zip's repayment rate is defined, so cannot comment on it.

I noticed that you tend to respond to perceived criticism by attacking your fellow microlenders, rather than addressing the issues raised.

The thing is, you have a lot of angry lenders who feel misled by your marketing. After using your site and reviewing your marketing, I think they have good reason to be upset. Zidisha has a track record of downplaying its loan loss rates. I'm not the only who feels this way: your lenders are very upset about it.

You mentioned you had a long response explaining why my article was inaccurate. But your response mostly just said that you say Zidisha is risky in your FAQ, terms of use and other internal pages.

Why not put your repayment/loan loss rates and mission statement on your frontpage?