Pierre Omidyar – founder of eBay – stated at the 2006 eBay Developers Conference that he was focused on international microfinance. It took me a while to understand what he was talking about.
Microfinance is peer to peer lending. You lend $100 to a farmer in Eastern Europe to buy seed and fertilizer or a female store owner in South East Asia to buy goods for a marketplace store. Within a year, they pay you back. The qualified borrowers are very experienced business owners who need money to grow their business.
This photo is of a farmer in Bolivia who borrowed $600 to buy a milk cow. She sells the milk and has repaid $200 of her $600 loan.
Here’s a great summary of the two companies: Kiva vs MicroPlace-whats the difference
I think I’ll give MicroPlace.com a try in 2008.
There is a company called Prosper.com that offers peer to peer lending for people in the US. I took a quick peek and saw borrowers wanting to consolidate their consumer debt. No way. These are high risk loans to people who don’t know how to manage money. Yuck!