I doublechecked and didn't see any mention of a one-time registration fee on any of those 20 loans?
I'll go back and look at the 20 loans with your tip in mind, and recalculate APRs separately for both first-time borrowers and repeat borrowers, and update the post.
I see what you mean. This is confusing because our website is programmed to display the registration fee only for applicants who have not yet had a loan disbursed. Once a loan is disbursed, the fee is paid and is no longer displayed in the loan profile page as part of the amount due to be paid by the borrower.
The second and subsequent loans contain a link "View previous loans" under the "On-Time Repayments" record in the right panel. All the loans that do not have that link are first loans.
Thanks for your response. The #1 issue I have is that you have been repeatedly comparing your (low) flat rates to Microfinance institutions' (higher) average costs. But that is comparing apples and oranges. Your rates are low because they are flat rate numbers. If you converted them into APRs, they would roughly double.
If you displayed your flat rate numbers into APRs, then I wouldn't have any problems with your marketing. You could compare your average Zidisha APR of 25% to the average industry average of 35%, and lenders could make their own informed decisions.
I agree that deleting that interest rate diagram is appropriate. However, you have repeatedly
compared your low flat rates with high APR rates elsewhere on your site. For instance, in this page on your site, you say, "While other microfinance services charge borrowers interest rates upwards of 40% or more, our direct peer-to-peer microlending model reduces the cost of Zidisha loans to just a fraction of this." [1]
Statements like these lead to articles comparing your low flat rate to others' higher APRs. [2-5]
To me, comparing your flat rate numbers to other people's APRs feels like a deeply misleading comparison.
I'd like to hear your side of the story here. Perhaps I'm missing something.
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.
I'll go back and look at the 20 loans with your tip in mind, and recalculate APRs separately for both first-time borrowers and repeat borrowers, and update the post.