Well, I was doing some reading the other day and happened across an market that I didn’t even know existed. The market is peer-to-peer Internet lending sites. I had heard of Kiva.org before but I didn’t know that there were for-profit sites like this. After reading a couple of posts about how people are making money doing this, I decided to read a little more about some of the entities.
The general premise is quite simple, you invest money, someone borrows it, and you get paid a portion of the interest rate. Sounds kinda like a bank huh? The big difference is that the sites don’t take 3/4 of the profit and give you peanuts. The sites take a fairly small amount and provide you with a larger portion. Of course, you also take some of the risk as well.
Here are some of the sites that I found
Zopa (http://uk.zopa.com/)
Prosper (http://www.prosper.com/)
Lending Club (http://www.lendingclub.com/home.action)
Virgin Money (http://www.virginmoneyus.com/)
In case you don’t know about it, there is also a site called Kiva (http://www.kiva.org/) that allows you to lend to micro-entrepreneurs in third world countries. This is designed more as a non-profit situation. You are lending to help these business getting off the ground and in time to build up the third-world countries.
This concept is very interesting to me in today’s world. We are seeing the banking industry having serious troubles. The industry has lost some of the public trust over the last few years. Is this the beginning of an evolution in the “banking” industry? Will concepts like this change the marketplace? It will be very interesting to watch this occur over the coming years.
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