Repayment performance of Facebook-verified loans

Discussion in 'Announcements' started by Julia Kurnia, Aug 21, 2013.

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  1. Julia Kurnia

    Julia Kurnia Director, Zidisha Zidisha Staff

    Dear all,

    I've been tracking separately the repayment performance of the members who have joined us under the new Facebook verification requirement, in order to measure whether the requirement is fulfilling its purpose of improving the likelihood that the new members admitted will participate responsibly without needing extensive follow-up.

    Thus far, 21 members who have been admitted under the Facebook verification requirement have had first repayment installments due over one month ago. (I had excluded from the tracking pool several members who rescheduled their first repayments due to misunderstandings about grace periods or financial setbacks, and also a few who were admitted after the Facebook requirement was introduced but benefited from loopholes in the early version of our verification check and whose FB accounts appear not to be genuine.)

    As a baseline, I measured on-time repayment rates for first-time borrowers with $100 loans who immediately predated the introduction of the Facebook verification requirement. Of the set of 55 non-Facebook-verified borrowers whose first repayments were due between May 5 and May 17, 25 (45%) were still in arrears thirty days after their first repayment was due. (Many of these have since caught up, but they took more than one month to do so.)

    Of the 21 Facebook-verified borrowers who have had repayments due one month ago or more, all but two have made their first installment and are current on their due repayments. The resulting on-time repayment rate (90%) is substantially higher than the on-time repayment rate for first-time members with $100 loans who predated the Facebook verification requirement (55%).

    It is too early to draw any conclusions about the effects of the Facebook verification requirement on repayment rates for larger loans in the longer term, but in the meantime, this early performance data is moving in the right direction.

    I am attaching the data spreadsheet here, and would welcome comments and questions.
     

    Attached Files:

    Sverre and Evelyn like this.
  2. Charlie

    Charlie Forum Member

    Thanks Julia,

    I copied the spreadsheet, combined all the loans into one list and added a table that can be rearranged by moving column headings around and clicking what to filter.

    It certainly does look like the Facebook verification requirement is having a positive impact on the loan repayment rates. Congrats!

    One of the reasons I made the table was that I was curious if location had any relation to repayment rates. The small number of loans made it hard to say too much, but two more active places got me wondering, Mtwapa and Nakuru Kenya, at 65% and 47% arrears rates, respectively. Only one out of five folks were in arrears from the Facebook verified group. Looking good there too!
     

    Attached Files:

  3. KyRoamer

    KyRoamer Forum Member

    You can automatically count answers with countif using the following formula -- =COUNTIF(D2:D56,"N") Interestingly, the formula only recognized your first N. I had to replace all of the others by either copying them down or retyping them. Once you know the total count and the count of no's, the yes count is just total count - the No count of =COUNTIF(D2:D56,"Y")

    On long lists auto-counting is a big help.
     
  4. Sverre

    Sverre Forum Member

    The current paying back on time is as low as 43% and also in addition
    paying back on time resceduled16.38%

    I am very, very happy both with Zidisha trying to get both of these numbers higher, and with that the new facebook loans seems to make som much better progress!
    Hopefully facebook accounts will also help against attempts at fraud as I think we probably already have seen online.
     
  5. Julia Kurnia

    Julia Kurnia Director, Zidisha Zidisha Staff

    Dear all,

    We now have 57 Facebook-verified loans whose first repayment installments were due over 30 days ago, and I'd like to share an update on their performance.

    Out of the 57 loans due to begin repaying 30 days ago or more, 53 (92%) are current with their first repayment installments. This is a dramatic departure from the performance of the pre-Facebook loans, only 55% of which had paid their first installments 30 days after they were due to pay.

    It is too soon to predict the ultimate repayment performance of the borrowers who were admitted under the new Facebook online identity requirement. They may fail to make subsequent payments or default with future loans.

    That said, the improved repayment rate among the first installments is a sign that we have moved in the right direction. I fully expect that the on-time repayment performance of the loans currently being funded will be better than those funded before the internet verification requirement was introduced.

    I am attaching the list of loans from which the data was taken, and would welcome comments and questions.

    Best,

    Julia
     

    Attached Files:

    randy and Sverre like this.
  6. Tricia

    Tricia Tricia

    Wow, Julia that is great news!
     
  7. K M

    K M Gold Member

    I am glad to see that there has been such a positive increase in on-time repayments, at least so far! Here's hoping the trend will continue!
     
  8. Sverre

    Sverre Forum Member

    I am getting some emails about rescheduling. So Its clear that the clients of Zidisha is been worked on by staff and VM,
    I am excited to check next month if repayments on rescheduled loans picks up from now on.
     
    Last edited: Oct 9, 2013
    K M likes this.
  9. Julia Kurnia

    Julia Kurnia Director, Zidisha Zidisha Staff

    Thanks Sverre,

    The credit for reestablishing contact with the older members in arrears goes mostly to our Volunteer Mentors and Country Liaison Interns. They have been working intensively to contact clients who have missed payments, and either assist them to reschedule or at least to post comments and communicate as much about the situation as the borrower wishes.

    Best,

    Julia
     
    K M likes this.
  10. Sverre

    Sverre Forum Member

    How are the Facebook loans doing now?
     
  11. Julia Kurnia

    Julia Kurnia Director, Zidisha Zidisha Staff

    There are now 119 loans that were due to begin repaying at least 30 days ago. Of these, 100, or 84%, are current with their first repayment installments.

    Eight of the 19 members who have not made their first repayment installments had rescheduled, using the grace period option, in August and September. They then missed the rescheduled first payment due dates in October. The missed payments for the rescheduled loans account for most of this month's increase in late payments.

    As of yesterday, the rescheduling option no longer allows members to take a grace period, but rather requires members to make at least small payments each month. This should help prevent future situations in which members use the rescheduling option to delay payment obligations, instead of adjusting their commitments to amounts they can afford to pay.

    I am attaching the spreadsheet listing of the 119 loans that have had repayments due over thirty days ago.
     

    Attached Files:

    mewesten, Sverre, Bayle C and 2 others like this.
  12. Sverre

    Sverre Forum Member

    Are there any (good) news regarding Facebook loans ?
     
  13. Sverre

    Sverre Forum Member

    Very good improvements of Zidisha!
     
  14. Julia Kurnia

    Julia Kurnia Director, Zidisha Zidisha Staff

    Hi Sverre,

    We are working on a comprehensive analysis of the relation between Facebook verification and repayment performance now. (The volume of Facebook-verified loan transactions is now too large to analyze in a spreadsheet.) Once that is complete, I'll share it here.

    Best,

    Julia
     
  15. Sverre

    Sverre Forum Member

    In my opinion , if possible, it would also be good to analyze how the new rescheduling options works out?
    Are fever loans rescheduled? Are more loans active repaying ? etc[/quote]
     
  16. Julia Kurnia

    Julia Kurnia Director, Zidisha Zidisha Staff

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