Wednesday, May 17, 2006

Peer-To-Peer Finance

Just a quick parrot of a post from Slashdot this morning, about peer-to-peer finance. Haven't had much time to think about it, but it seems intriguing.


At 10:18 PM, Blogger Thomas said...

I think this idea is a huge gimmick. I really don't get it at all. My understanding is that you can loan out your money to high risk loans with the promise of getting the high risk return on them.. lets just say 15% for the sake of discussion for the rest of my rant.

The thought of 15% return on your money is pretty intriguing. As we all know thre is no such thing as a free lunch. You are taking on the risk of these high risk loans. So they have to pay you pretty big.

All this sounds good.. 15% return! oh but if these people default guess what you get the shaft. I know they do some fancy aggregation so your risk is spread out amongst a lot of loans.

These risks are high risk.. that is why people would be willing to pay 15% for money.. they have bad credit.. meaning they are likely to default on the loan..

The money loaning industry is full of competittion if people want money companies are ready to loan them some. (at a fair price) If you are loaning money to random people for less than what a bank would you are most likely taking on more risk than you should.

At 11:08 PM, Blogger rob finn said...

Hi Danny, great blog man!

here is a great post on microfinance


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