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« Bureaucracy and Creativity: Cornerstones of Life in China | Main | Media Madness: Wokai is in the Seattle Times, Danwei, and Lost Laowai! »

January 13, 2009


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Daniel Shi

This is awesome! I learned so much from this presentation!

BTW, I think one of the interesting questions is regarding the high level of interest for the loans. I've definitely been asked that when telling people about Wokai and gotten surprised looks when I say "around 25%."

But I think it's interesting when thinking about loans in general is that there is a processing charge that is a fixed cost for all loans. So if the loan is large, than the processing fee is negligible. But the smaller the loan, the harder it is for the borrower to pay. And it also explains the surprising interest rate. A fixed cost of $50 on a $500,000 is nothing. But much bigger if the loan is for only $500, which I think is the average Wokai loan size.

Anyways, this is great stuff!

Raf Manji

Yes I struggled with the interest rate issue when I first started up with Kiva.

I believe the future will be a more equity based system of "lending" where compound interest is no longer.

But for now the bills have to be paid and most loans are for short periods.

Above all Wokai is laying down the infrastructure for a peer to peer system of finance.

That is empowering for all of us not just those receiving the loans.

Great job!

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