Last Modified: May 20, 2019
Most Recent Change(s):
- We adjusted text in the “USD as Currency of Record” section to reference both Oanda and TransferWise as the source of Zomia’s exchange rates. As of May 15, 2019, Zomia uses exchange rates published by TransferWise whenever possible, though rates from Oanda have been maintained for prior dates. Both rates are “midpoint” rates.
- Other minor wording and formatting adjustments were made.
Applicant: Any individual who uses the Site to apply for a loan.
Content: Any information made accessible or available on the Site.
Lender: Any User of the Site that provides loan funding to Zomia Students.
Party: Any one or more persons, entities, or interested representatives in an agreement or dispute with Zomia.
Partner: Any Party that enters a written contractual agreement with Zomia.
Service: Any function of the Site or off-platform services provided by Zomia.
Site: The pages and Content of https://zomia.org.
Student: Any person who has received a loan from Zomia.
Third Party: Any site, service, individual, or entity not operated by Zomia.
Third-Party Content: Any Content or links made accessible by Third Parties.
User: Any individual or entity that accesses the Site to use it or its Services.
User Content: any Content created by a User of the Site.
Use of the Site
You agree to use the Site in the following ways:
- create and maintain an account for yourself;
- keep your password and identification secure;
- represent yourself accurately;
- engage with Users appropriately; and
- take full responsibility for any actions that take place using your account.
You agree not to use the Site in the following ways:
- access or use the Site for commercial purposes, unless pre-approved by us;
- create an account for someone else;
- impersonate another person, entity, or misrepresent yourself;
- use the Site in a way that can hinder, delay, destroy, or otherwise impair the Site’s performance. This includes the software, servers, third-party systems, and any other equipment we or others use to manage the Site;
- make content available that encourages a User to violate the rights of another User or local, state, national or international laws;
- use or try to use another User’s account without that User’s authorization;
- use the Site in a way that degrades the experience for another User. Examples of this include but are not limited to:
- making content available that is deemed unlawful, obscene, harmful, threatening, abusive, profane, hateful, offensive, graphic, defamatory, libelous, invasive, or objectionable;
- advertising or soliciting a User to buy or sell products or services;
- sending “spam” (e.g., chain letters, junk email, mass messages, etc.);
- requesting or posting personally identifiable information of Users (e.g., e-mail address, physical address, Social Security numbers, credit card numbers, etc.)
How Zomia loans work
Due to the short time between Students requiring funding and starting school, we rely on a network of Partners that fund Zomia Students upfront, which we then recover via crowdfunding on the Site. We call this process “pre-funding,” and the process of Lenders crowdfunding Student loans “backfilling.” Both pre-funding and backfilling play critical roles in our ability to reach Students. Pre-funding loans prevents a situation in which Students are accepted to a university but cannot secure sufficient funds on the Site in time to start classes. Our pre-funders include individuals and institutions that have agreed to support Students before they are listed on the Site. Backfilling is important because it replaces the pre-funding commitment, which allows the pre-funders to put their funds towards future students. Once you backfill a loan, your support is directly tied to the Student(s) you support. You receive updates on the Student’s progress in school and, once they enter repayment, a percentage of each repayment.
Repayments to Lender accounts are distributed proportionally based upon the percentage of support the Lender provides of the Student’s total loan. For example, if a Lender provides $100 of a Student’s $1,000 loan (or 10% of the total loan), that Lender will receive 10% of each repayment made by the Student. If the Student makes $50 monthly payments, the Lender’s account is credited for payment of $5 from the Student every month. In the event a Student’s income and repayment amount change, the Lender will receive a different repayment amount from the Student. Because repayments to Lenders are linked directly to their Students, Lenders only receive payments when the Students they’ve supported make repayments.
Student loans & risk
By participating in lending on the Site, you acknowledge and agree to the following characteristics of providing education loans to Zomia Students:
- Zomia loans are unsecured and run a risk of non-repayment. We advise that you never lend more money than you feel comfortable losing to Students. Student loans are inherently risky, which is the reason why Zomia exists! If it were a safe investment, financial institutions would already be providing affordable loans to Students. While we will make every effort to secure full repayment from Students—and will notify you of our repayment collection efforts—Zomia loans are risky. Lenders ultimately assume some risk of Student default.
- Loans cannot be canceled or refunded before repayment. As funding a Lender provides is tied to a Student, Lenders cannot cancel loans they have already provided Students. To do this would require the supported Student to make an early repayment, which is inconsistent with the loan agreement made between Zomia and its Students.
- Zomia has a dual interest in serving Students and Lenders. Should a conflict arise between the two Parties, Zomia will err on whichever side we deem in our sole discretion does the least harm to both Parties.
Inactive accounts are accounts that have received at least $25 and 90% of repayment for more than 90 days. 90% repayment is determined by dividing a Lender’s current balance by their total deposits. Accounts that reach the $25 and 90% thresholds will receive a monthly reminder to reallocate or withdraw their balances. If no action is taken by the end of the 3rd month, the accounts will be deemed “inactive” and enrolled in Repayment Recycling. Inactive accounts will continue to have visibility into individual Students supported upon logging into the Site. Lenders may turn off Repayment Recycling at any time from their Portfolio preferences.
Lenders may withdraw funds from their available balance at any time through a linked PayPal account, less any PayPal fees. To do so, log into your Lender Portfolio, click the “Withdrawal” button, and follow the prompts. Withdrawals take 3-5 business days to process via PayPal. Withdrawing an amount greater than $1,000 could take longer.
- Physical cards may be sent via the US Postal Service to addresses in the United States and Canada. Physical cards are plastic and mounted in a protective sleeve (or “presenter”) before being placed in an envelope along with a separate insert containing instructions and an optional custom message. Physical cards may be sent to the purchaser, enabling delivery in person, or directly to the intended recipient.
- Cards may be sent via e-mail directly to the intended recipient. Electronic gift cards are subject to the same terms and conditions as physical cards.
- Cards may be printed by the purchaser. A printable document is sent to the purchaser via e-mail in PDF form.
If you send a gift card via e-mail, we will send a reminder to the recipient’s e-mail address if the value has not been redeemed within 30 days prior to the expiration date. If physical or printed gift cards are sent, the purchaser is responsible for reminding the recipient to use the card before the expiration date. The purchaser of a Zomia gift card is the owner of the card until it is redeemed by another User. If the purchaser decides to use the value of the card him/herself, it is the responsibility of the purchaser to alert his or her recipient that the card may no longer be used by the recipient.
Zomia gift cards may only be redeemed to fund Student loans on the Site. They may not be used to purchase other goods or services. Redemption occurs when the full value of the gift card is applied to a “basket” of Student loans prior to checkout on the Site. Redemption requires the redeemer to register as a Lender on the Site. Upon redemption, ownership of the gift card is transferred in full to the redeemer. All subsequent loan repayments made by the Student(s) supported are re-distributed to the redeemer.
We can accept donations to our general student fund through Partners Asia, Zomia SPC’s fiscal sponsor. Gifts grow Zomia’s general student fund, which ensures our long-term ability to provide affordable education loans to future generations of Zomia students. The general student fund is restricted. All funds provided as donations can only be used to support Students in perpetuity.
If you are a victim of identity theft, or in some other way have had your personal information stolen and someone is using your accounts to fund Student loans, please contact us at firstname.lastname@example.org immediately. We will void the transactions on the Site and aim to return the funding to your account.
A Lender account may be terminated by either Zomia or the Lender at any time and for any reason. To do this, send a written request to email@example.com to terminate your account. If you have an available balance greater than $25, we will return your funds immediately via your linked PayPal account. You will be sent a second transfer after all repayments from Students you’ve supported have been received. If you have a balance of less than $25, you will receive one transfer after all of your Student repayments have been received. In all cases of account termination, Lenders pay from their available balance any transaction fees charged by PayPal and a service fee of $1 or 1% of the funds to be transferred, whichever is greater.
Deleting your account removes the ability for you to log back into your account. Your public lending history on the Site (name, the amount provided to Students, etc.) will remain visible, as those are public transactions on the Site. Local laws may require that we hold records of your account for up to seven (7) years. We will delete all but the necessary information to prove you held an account with us. You may request to know what information is being kept by Zomia in your message to delete your account.
- explain why you feel your account should remain active in light of the reason(s) we listed in Our justification of deleting, disabling, or curbing your account access; and
- tell us how you’ll prevent an account closure in the future.
We will consider one appeal before making a final decision on a course of action.
The underwriting process on each application we receive typically takes weeks. Students undergo an eligibility screening, application process, interview, and contract review before receiving loan funding. Internally, Zomia team members conduct at least two rounds of evaluations—after eligibility results and loan applications are submitted, then again after conducting interviews with Applicants.
Know Your Customer (KYC) Policy
Zomia adheres to standard KYC procedures. We verify a Student’s identity and status in school before any money is sent to the Student. If approved for a loan, we transfer funds either to the Student’s personal bank account or directly to the University under the Student’s name and ID number. We do not transfer funding to accounts that do not belong to Students or the universities where the Students study. We require Students to submit proof of enrollment before the start of the school year and verify the Student’s status in school by requesting and verifying transcripts at the end of each semester.
Zomia loans carry a 5% “flat” annual interest rate (this is also known as “simple interest”). The interest payments help us cover our operational expenses while scaling to reach more Students. Interest payments from Students help subsidize our operations, but they do not cover all of our costs at any scale. We instead rely on charitable capital from Lenders (providing loans without interest), tips on the Site, and management fees associated with deploying funding to Students on behalf of larger organizations. We see interest payments from Students as their contribution to Zomia’s sustainability, helping us reach Students from communities that other financial institutions cannot support.
The word “flat” in “flat interest” is an important term. Flat interest is a type of interest where the interest charged each year is based on the total amount the Student borrows. This is different from “declining balance” interest, where the interest is based on how much is remaining to pay. We use flat interest because it is easily understood (the interest payment is the same each year) and more predictable.
Interest on Zomia loans begins in the first year of repayment for the Student and ends after 12 years if the Student has not fully repaid the loan. No interest is charged while the Student is enrolled as a full-time Student. Once a Student repays their Loan plus interest or finishes their contract period, then repayments end. The maximum amount a Student will ever repay in interest is 1.6 times what they borrow. That 1.6 ceiling is not reached until after 12 years of repayment. For example, the maximum amount a Student would repay on a $1,000 loan would be $1,600. And the Student would only reach that level of repayment after 12 years of making repayments.
Here is the repayment schedule on a $4,000 Zomia loan:
|Year with Zomia
Students receive an automatic six (6)-month grace period after they graduate or withdraw from their program. This period allows them to find employment and get settled after school before they begin to make repayments. At the end of the grace period, their incomes are evaluated to determine if they enter repayment or deferment. If a Student’s income meets the minimum income threshold, then repayments begin in the seventh (7) month after graduation. In the case of variable incomes, we work with Students to determine a repayment schedule that works for them. For example, Students with seasonal work or highly variable income might require quarterly payments, or payment “seasons,” versus Students who earn a fixed monthly salary and can make monthly repayments.
We evaluate income in various ways. For Students with formal employment, we collect pay stubs and verify income with employers through a lottery system. Every year, we randomly select and verify the income of 25% of the Students who are in repayment. For self-employed Students or Students with informal, temporary, or and/or seasonal employment, we allow them to submit an income verification form and any balance sheets, profit/loss statements, proof of income, starting and ending account balances, or any other reasonable method to verify income in a given repayment period. If no suitable method of determining income can be conducted, Zomia team members work with Students to understand the Students’ expenses and income to determine a suitable payment schedule.
In addition to the automatic 6-month Grace Period, Students receive an additional 24 months of deferments. We trigger deferments automatically if a Student is not earning above our minimum income thresholds. We also allow Students to request deferments for numerous reasons: paying for a wedding, hospital visits, unemployment, pursuing additional higher education, etc. Because a Lender’s repayments are tied to the Student’s actual repayments, this means that loan repayments could take longer to receive if the Student accepts multiple deferments. After 24 months of deferments are used, we work with the Student to determine an appropriate payment plan.
Student loans are inherently risky and Zomia Lenders ultimately assume the risk of lending to a Zomia student. It is critical that Lenders see their loans as charity and not risk more than they can afford to lose. Assuming the risk of default allows Zomia students to receive affordable rates on their loans.
We consider a Student in default if they have missed more than 90 days of repayments without communicating with us (we will not place a Student in default if they are communicating and working with us!). In the event of a default, we will notify you of the default, our past actions to collect, and what our next steps are. If the Student begins to make repayments after being placed in default, the Student will be taken out of default, placed on a normal payment schedule, and Lenders will begin receiving the Student’s repayment. Zomia will continue trying to collect repayments from Students in default as long as there is a chance the loan can be recovered. In extreme cases where we don’t think it’s possible to collect repayment, we reserve the right to sell the loan to a collections agency and report the default to a credit bureau. In this case, Lenders who support that Student would be reimbursed for any amount that was recovered. If repayments are never made, then the Lender will not receive repayments from the Student they supported.
USD as currency of record
Zomia loans are distributed in local currencies but recorded in U.S. dollars (USD). We do this because the USD is a stable currency, which reduces inflationary risk. It also allows us to provide funds in one currency (e.g., Thai baht) and accept repayment in another (e.g., Myanmar kyat). As Students make repayments in their local currency, any risk of foreign exchange loss or gain is assumed by Students. We use rates from TransferWise and Oanda as the exchange rates of record for all loan transactions. Conversions are made using published end-of-day midpoint rates or actual exchange rates incurred.
Student and Lender communication
Students and Lenders may exchange personal messages and e-cards with each other through the Site. For all parties’ protection and safety, Zomia archives these messages as a matter of record. We encourage all messages between Lenders and Students to remain on the Site. Spamming Users, soliciting personal contact information, requesting more funding or repayments outside the platform, etc. are all examples of violations of Zomia’s community interaction guidelines.
Student web profiles
Zomia Students write their own personal stories for the Site. These stories are then edited by native English-speaking editors for clarity, spelling, punctuation, and grammar. After the story is refined, the Student either makes further changes or approves the story for publication on the Site. To protect Students’ privacy, Students may use nicknames on the Site, and we provide only general locations. Students are also given the option to limit their profiles’ visibility to registered Lenders only.
Zomia, Zomia SPC, and other graphics, logos, designs, page headers, button icons, scripts and Service names are trademarks or trade dress of Zomia SPC in the U.S. and/or other countries. Zomia’s trademarks and trade dress may not be used, including as part of trademarks and/or as part of domain names, in connection with any product or service in any manner that is likely to cause confusion and may not be copied, imitated, or used, in whole or in part, without the prior written permission of Zomia.
In compliance with the Digital Millennium Copyright Act (DMCA), if you believe there is copyright infringing material on the Site, please notify us in writing with the following details:
- sufficient details to enable us to identify and locate the material that is claimed to be infringing (for example, a link to the page that contains the material). If multiple materials are claimed to be infringed, please send us a list of such materials with descriptions of each;
- your contact information (at least e-mail address, phone number, and name); and
- a written statement that you have good reason to believe that the use of the material identified by you is not authorized by the copyright owner, its agent, or the law. In this statement, please also state that the information you provided is accurate and that you are authorized to act on behalf of the owner of the exclusive right that is alleged to be infringed.
You may send this written notification to our Designated Agent:
Mail: Attn: Legal
4816 Aurora Avenue N
Seattle, WA 98103-651
Phone: +1 (702) 866-2500
Fax: +1 (702) 855-2689
You acknowledge and agree that any questions, comments, suggestions, ideas, feedback or other information about the Site or the Service (“Submissions”) provided by you to us are non-confidential. Furthermore, we have the right to disseminate and share Submissions with other Parties for the purposes of furthering our mission. This includes, without limitation, for commercial purposes and without acknowledgment or compensation to you.
We strive to be as wasteless and paperless as possible. By using the Site, you agree that our notices and disclosures will be provided solely electronically through the Site or via e-mail to the e-mail address you provide Zomia, until you explicitly withdraw your consent. In order to access these electronic notices and disclosures, you must have 1) a steady internet connection that enables loading of the Site; 2) an accessible email account; and 3) a supported web browser that can access and load the Site.
Limitation of Liability
By accessing or using the Site, you agree that your decisions and actions on the Site are yours alone. Except in jurisdictions where such provisions are restricted, in no event will Zomia or its directors, team members, or agents be liable to you or any Third Party for any indirect, consequential, exemplary, incidental, special or punitive damages, including for any lost profits or lost data arising from your use of the Site Content or other materials on or accessed through the Site. This rule holds true even if we are aware or have been advised of the possibility of such damages. In no case will our liability to any claiming Party exceed $1,000. By using the Site you acknowledge that you shall not be entitled to damages of any kind from Us, regardless of the cause of action.
Contract Survival & Dispute Resolution
|December 20, 2018
|March 15, 2019
|Changes to how an “inactive” lender account is defined.
If you carry a balance of $25 or more for longer than thirty days, then we will remind you to use your balance via the e-mail associated with your Zomia Lender account. We will send you two more automatic reminders monthly to use this balance. If no action is taken by the end of the 3rd month, then your account will automatically enroll in Repayment Recycling and your funds will be re-lent to new Students. You will always have visibility into the Students you supported upon logging into the Site. You may turn off Repayment Recycling at any time from your Portfolio’s preferences.
Inactive accounts are accounts that have received at least $25 and 90% of repayment for more than 90 days. 90% repayment is determined by dividing a lender’s current balance by their total deposits. Accounts that reach the $25 and 90% thresholds will receive a monthly reminder to use the funds. If no action is taken by the end of the 3rd month, then the accounts will be determined “inactive” and automatically enroll in Repayment Recycling. Inactive accounts will continue to have visibility into the Students supported upon logging into the Site. Lenders may turn off Repayment Recycling at any time from their Portfolio’s preferences.
|May 20, 2019
|Changes to official exchange rate source.
|USD as currency of record
We use rates published by Oanda as the exchange rates of record for all loan transactions. Conversions are made using end-of-day midpoint prices published by Oanda.
|USD as currency of record
We use rates from TransferWise and Oanda as the exchange rates of record for all loan transactions. Conversions are made using published end-of-day midpoint rates or actual exchange rates incurred.