Revision as of 12:06, 19 January 2007

Peer to Peer Exchanges = The term can refer specically to Peer to Peer Lending, such as Zopa or Prosper, or more generally to different kind of exchanges that put people directly in touch with each other.

Typology

From a typology developed by Francois Rey:

Buy/sell, e.g. classified listings of items on sale
Gift, e.g. Freecycle
Auction, e.g. eBay
Barter, see Online Barter Markets
Sharing, e.g. car-pooling/rideshare, book lending and exchange, time-share accommodations, etc.
Mutualization, e.g. mutual insurance Mutual Banking Clearinghouse?
Group Purchasing, e.g. LetsBuyIt.com (a special case of mutualization)

Description

The following refers specifically to P2P lending sites such as Zopa and Prosper.com:

"Such 'social lending' or 'peer to peer lending' sites "encourage borrowers to post personal accounts of their financial situations -- the kind of material that doesn't show up on a credit report, like the fact that you accumulated your debt going through school and are about to graduate into a good job -- and then allows individuals to act as lenders by putting small sums together in a syndicate to make the loan. So if you want $5,000, you might get it from 50 people who share your interest over three years. Interest rates are also determined between lenders and borrowers, and are much lower than the predatory high-risk rates charged by credit cards and payday loan centers (which can charge a whopping 521 percent API). Lenders are encouraged to diversify their loans, spreading out their investment in $50-or-up chunks that are spread among borrowers with different risk profiles." (http://www.boingboing.net/2006/05/21/how_p2p_lending_is_c.html)

Examples

Zopa

Zopa (Zone of Possible Agreement): the new company is an amalgam of a number of business philosophies. It is where eBay meets credit unions by way of easyJet, the peer-to-peer movement and Betfair. You can lend up to £25,000 through Zopa and your money is divided among 50 borrowers (who have already been screened to ensure they have good credit ratings) to minimise risks of default. (http://www.guardian.co.uk/economicdispatch/story/0,12498,1435623,00.html}

Zopa is at http://www.zopa.com/ZopaWeb/.

Prosper.com

The new kid on the block, in the U.S. is Prosper.com. There is an interesting discussion on Omydhyar Net about the potential for charitable giving of Prosper-based lending groups, as well as of the market-driven practices, at http://www.omidyar.net/group/foodchain/news/124/