I've been interested in micro-lending and alternative lending for a while, so when I came across Prosper.com I was excited. It's peer-to-peer lending. It works by people putting their loan requests on the website, say for $1000 to consolidate some bills, or expand a small business they're running out of their home, whatever they want. Part of the borrower's proposal also includes the interest rate they're willing to pay.
People go to the website and choose which proposals to contribute towards. They don't even contribute a lot of money, say no more than $50 towards a person's proposal. Prosper.com collects the money from the borrower and redistributes to the lenders, taking a 0.5% fee from the lender, and a 1% fee from the borrower. Only 3% of the loans on Prosper.com are currently past due, which in my mind is not a bad rate, considering they've helped broker $27 million in loans so far.
I'm really intrigued by Prosper.com, and enthused as well. It makes me happy to see that there are companies that are willing to take on the larger financial institutions in different ways, ways that give some of the power back to everyday people.
