When are Zomia loans placed “In Default”?

Because Zomia’s repayment model is income-based, borrowers should never default on their loans. Unlike traditional loans, if a Zomia graduate is not earning sufficient income, no payments are scheduled. Loans are placed in default only after borrowers fail to make scheduled payments and have not communicated with our team for 90 days. If Zomia’s attempts to reach a delinquent student fail—and there is no explanation for why payments have ceased and communication has stopped—the loan is placed in default.

Why do we do this?

Zomia’s loans are unsecured. We do not require collateral, nor do we seize assets when defaults occur. Instead, we rely upon reputation and network effects to encourage contract compliance. While we seek to avoid doing so, publishing the names of students in default is the primary means we have to ensure that our contract terms are followed.

Other students suffer when our borrowers default! Zomia provides loans and not scholarships to maximize the impact of every dollar invested in its students. With defaults, money is removed from the Zomia platform—and those funds cannot be used to support other students. Lender confidence is also shaken if our students fail to meet their obligations.

Zomia may share its Default List with financial institutions, borrowers’ family members and employers, and the public at large. We will not take a borrower’s assets, but if you stop communicating with Zomia and duck your obligations, your name will be displayed here!

What steps are taken before a loan is placed “In Default”?

Zomia borrowers are sent automated e-mail and mobile app reminders before each payment is due. If payment has not been received within one week of the due date, a Zomia team member attempts to contact the borrower via phone, e-mail, and/or social media. Normally, this is enough to address the issue.

If payment has not been received within two weeks of the due date, it is officially considered “late” and another message is sent. A 10% late fee is assessed. At both the 30- and 60-day marks after a payment is due, formal default warnings are sent. At the 60-day mark, the borrower is told that Zomia will be contacting his or her employer, family members, and/or references in an attempt to reach the borrower and resolve the situation. If, after 90 days and further attempts to contact the student fail, the loan is formally placed in default.

Can a borrower be removed from this list?

The *ONLY* way a borrower can be removed from this list is to resume communication, accurately report income, and—if appropriate—resume regular loan payments.

Who is on the list?

If a student is listed in default, it is safe to conclude that he or she has failed to fulfill the obligations set forth in Zomia’s loan agreement—obligations that were formally acknowledged at the time of contract signing. The following loans are currently in default:

Sou Bora (Bora)

Sou Bora (Bora)

$1,000 Borrowed

Department of Humanities & Social Science

Royal University of Phnom Penh

From Cambodia, 44 years old