reddogg blogg

Microfinance
Microfinance pedantically refers to lending funds to the poor, yet I feel that this can be applied relatively within the US if you consider poor credit to be a form of poverty, even if self induced. In any case, at universities across the world to many of the foremost publishers P2P lending is becoming a more commonly discussed topic. P2P quite simply means person to person, instead of the traditional methods of B2P where businesses lend to people.

P2P for Profit
Prosper was the first site I heard about, from what are relatively humble beginnings it seems there is a strong foundation being built in the United States. For a while the only other P2P lending broker in the world was Zopa of Great Britain, though they too are expanding in to the US. In all these cases interest rates are set, credit activity is reported and of course there is risk of non payment.

P2P for Phamily
A company called Circle Of Lending focused on brokering loans between family and friends. However this company in the last month has had a huge transformation as it appears Virgin Entertainment has taken up a strong foothold in this emerging and exciting market. Though the new company, Virgin Money, is still focusing on family lending. This concept may seem strange to many Americans, but on a recent visit to Russia in 2005 I found to my surprise that a common retirement quality investment for citizens was with their own family and friends. One woman had lent a large sum of money to friends of hers so they could start a business. Fortunately the business was going well and she could actually expect reasonable returns.

P2P for Philanthropy
Kiva is very ground breaking because they have taken P2P lending global. Unlike the profitable version, there is no money to be made here; and consequently the risks are lower with over 98% reported repayment. You lend money to individuals across the world with whom Kiva brokers the transactions and companies like EBay/PayPal move the money at no cost to the lender or borrower. Though not quite a charity, there are efforts afoot to utilize the P2P lending methods in war torn Iraq.