Does Kazi make any profit or margin on the financing?
No. Kazi is a non-profit and therefore does not withhold any sort of commission on the financing of its projects. However, it covers its operating expenses with a small part of the donations which are kept transparent for the public. Kazi is able to keep such expenses very low thanks to voluntary work provided by its members and board.
How do I ensure I will get my money back on the loan?
By definition, a loan comes with a credit risk. We are extremely careful in picking viable projects, ensuring that we only deal with reliable entrepreneurs. Though there is no actual collateral for the lender, the selection committee ensures that the borrower has collateral on the ground and check whether it can be easily collected or not, which it is an effective way to have the borrower perform by respecting the given timeline. Kazi also relies on the assumption that USD 250 have a lower value in the eyes of the lender than those of the African entrepreneur (borrower), due to the significant difference in purchasing power. This also means that it could be assumed that the lender is comfortable with the credit risk given the rather small amounts involved.
Will I be paid back on time?
We have a strict policy regarding loan repayments. We establish a repayment schedule with local entrepreneurs, and if they cannot commit to the initial plan, they will face difficulties with future loans. On the other hand, if an entrepreneur performs well and repays on time, he will be eligible for further access to financing in the future.
Do you perform due diligence on each of the project?
Yes. We consult local advisors and communities members to ensure that the entrepreneurs have clean backgrounds and are known for being serious about their projects.