A New Trend in Lending?
One of the many ways that the Internet and the Web have been disruptive technologies has been in the area of intermediation. Many of our traditional institutions are severely strained now - especially the ones that acted as filters, as quality controls, as the gate keepers. Mainstream media is losing market share and clout. The self-publishing industry is putting enormous pressure on that sector as well. Amazon and eBay have completely disrupted the retail sector. Tax prep software's impact on accounting, travel sites, and on and on.
And now the same may be occurring when it comes to lending and borrowing. Here is a site, Prosper, that presents itself as “The online marketplace for people-to-people lending”, where you can lend money to someone (or a group of someones) or borrow. It all seems to be done on an eBay style auction model.
Is this a good thing or a bad thing? Ummm….