Intriguing idea here which is a slightly different slant on the disintermediation of banks. When eBay began, there was talk then of auctions playing a role in intermediation between borrowers and lenders. This idea goes further and presumes willing lenders amongst ordinary people seeking better returns on their money.

Economist.com | Articles by Subject | Person-to-person finance

Catherine Graeber of Forrester Research, a consultancy, is intrigued by the idea, particularly because it might attract 18- to 28-year-olds who need credit and spend hours logged on to social networking sites. These people, says Forrester, are much less likely than their parents to care about brands when choosing a bank. They are also routinely ignored by banks.

Prosper Marketplace in California is one such P2P lending intermediary.

Enter Prosper Marketplace, a Californian company that matches people who need small loans with others who have extra cash to lend. Prosper launched its website on February 6th. This week, the number of active bids for loans was running at around 200. Lenders have put up some $750,000.

Cathy makes some insightful comments later in the article, talking about when the borrowers start to default. The opportunity however could be for traditional lenders to provide funding for these loans, which could be offerred through Prosper, or Zopa.

Future concept:

This could introduce a new channel for Banks, with low cost for participation. In particular, the mashing of social networks and financing bringing together groups with converging needs (lenders and borrowers) in a convenient location (social networks) is an interesting one to follow.

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