This is a guest post by Brendan Rigby, an enthusiastic volunteer at Wokai. This blog has previously profiled Wokai, and this post is a great addition to the resource.
The current events taking place in the microfinance sector in India are particularly worrying. Reports of suicides, government intervention, defaults and borrower harassment are threatening to undermine microfinance as a social business. Reflection on these events also allows us to reconsider the current models of microfinance in place and to seek new, more participatory and transparent ways of delivering microcredit.
China is a current site of the latest direction in microfinancing: peer-to-peer. Microfinance in China is an extremely underdeveloped and overlooked issue that deserves more attention. Poverty in China is often overlooked and overshadowed. According to World Bank and UN statistics, around 200 million Chinese live on less than US$1.25 a day. China’s financial and banking system makes it difficult for entrepreneurs and small business owners to access loan credit, especially in rural areas, where some 750 million people live.
Wokai, which means ‘I start’ in Chinese, has taken a contextualised and peer-to-peer approach to microfinance in China. It is a contributor-driven microfinance website that connects contributors in the international community with borrowers in China. Contributors can choose borrowers to support, watch repayments, and pick who to fund next. Unlike much of the global microfinance sector, the impact of a contributor’s donation is visible and apparent through Wokai.
The process is 100% transparent and contributor-driven.Wokai has also built a community of contributors through the website, in which users can access user-rated and user-generated content on microfinance in China. Through information and capital exchange, Wokai aims to grow the microfinance sector in China and correspondingly increase opportunities for the poor to generate a sustainable livelihood and access education and healthcare services.
Since the website launch in November 2008, Wokai has raised over US$374 000 in loan capital, attracted 6,700 contributors, and empowered 491 borrowers. Wokai works closely with two Chinese microfinance institutions (MFI) in Sichuan and Inner Mongolia, achieving a 99.5% on-time repayment rate. By the end of 2011, Wokai is aiming to raise US$1 million in loan captial to expand its partnerships with two more Chinese MFIs. This is an achieveable goal, but not without more support from individuals passionate about empowering families to lift themselves from poverty.
For more information about Wokai and how you can get involved, please visit www.wokai.org“
