Text post My social lending policy

Today I started using a peer to peer lending platform (smava). Social Lending, peer-to-peer financing or micro credits became widely popular by Nobel Peace Price winner Muhammad Yunus. And it looks like it has a bright future (even in the developed world):

The dollar amount of peer-to-peer loans outstanding in the United States was $118 million in 2005 and $269 million in 2006, according to Celent, a Boston-based research and advisory firm that helps financial institutions develop business and technology strategies. Last year, peer-to-peer loans outstanding rose to $647 million; loans are expected to total $5.8 billion by 2010, the firm projected.

(Source: How to Borrow from Peer-to-Peer Lending Sites)

Peer-to-Peer Lending is a Win-Win-Win. People who wouldn’t get loan from a traditional bank or only at high interest rates are able to get a loan, the lenders get higher revenues than from traditional investments (except from stocks but with lower risk) and the service operator earns service fees. But should we invest in everything just to get some .25 per cent more in revenue? Where is the social part in funding someones new TV set?

So here is my social lending policy for the developed world:

Bad

Good

Question to the platform/service operators: how can we check how the money is used in an anonymous environment?

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Created: Mon 05 Apr

Tags: banking peer to peer social lending person to person lending micro finance