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Peer2Peer Money Lending

Morgan Maher
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P2P and social networking is now working its way into banking practices with sites such as Zopa and Prosper offering peer2peer style loans and lending services.

Enterprises such as these are creating pathways for various open, connected community-orientated economies and ecologies. "..personal loans are but the tip of the co-operative iceberg – if person-to-person can nudge person-to-institution-to-person aside here, then why not in other areas too?"

Both Zopa and Prosper engage various checks and balances in order to build and maintain trust, addressed by a rating system similar to that of eBay. Borrowers request money and lenders bid for the privilege of lending. With Zopa "…lenders only lend small chunks to individual borrowers. A lender lending £500 or more would have their money spread across at least 50 borrowers." Zopa stands for 'Zone Of Possible Agreement'

Prosper is currently up to $61 000 000 in loans.

Comments

awesome!

Submitted by Daniel Pinchbeck on Sat, 05/19/2007 - 11:37.

Hi Morgan,

This is great stuff! Thanks for posting.

 

Zopa looks like it is only for England. It was hard to tell how effective Prosper is from the examples on the site. I wonder if this type of concept would work much better in Europe, where there is more community, than in the US.

 

I would love to hear from anyone who has tried this or similar services.  

 

"Will the transformation."-Rilke

flow

Submitted by Morgan Maher on Sat, 05/19/2007 - 12:07.

yes it looks like there are some things to work out with Prosper, but they have done $61000000 in loans, so something is working.

Lots of good info on the Prosper forums

 

Zopa is coming to the US, you can sign on for a preview/updates on their site (top of the page)

 

from the Zopa wiki;

 

The idea for the service was identified following extensive socio-economic research which itself identified a group of individuals, coined Freeformers.

Freeformers were identified as displaying different attitudes towards many aspects of life, including their money, and Zopa has developed a credit referencing process that goes beyond credit bureau information in order to establish consumers' attitudes towards money, as well as their credit-worthiness. This extends their ability to offer credit to this freeformer group, who may have irregular incomes or short-term cash-flow requirements, but who may not be offered credit through traditional methods of credit referencing.