Peer to peer financing

Finance is one of the cornerstone of the modern economy. However, the current crisis is showing us how distorted the financial system has become. What can we do as innovators to make the system relevant again? To make it value adding, rather than sucking the value away?

I believe there is an emerging class of financing that is going to become more and more important: peer to peer financing. The likes of Kiva, Prosper, Zopa has shown us the first glimpse of how such a system will look like. These p2p networks will not replaced VCs, IPOs, loans et al but instead complement them as an alternative to finance what I believe to be the emerging independent class. People who work for themselves based on their creative skills. Sellaband is one fine example.

So as a startup, what can you do? Can you build a decentralised P2p system for every community? Let the dogster, carspace, last.fm of the worlds have a simple way to allow their members to support one another financially. We don't need more sellabands. Instead, we need to be able to put p2p anywhere it is useful.

Another idea is to build software that helps individual in their 'fund raising'. This software can help individuals build their credit score by aggregating all their relevant digital records, anything from credit card spending to pay slips et al. It can also remind them on the payment schedule.

On the investment side, there might be a need for a software to help investors manage their p2p loan portfolio. With automatic portfolio balancing, real time analytic and information feeds, this software can greatly enhance the productivity of these loan investors.

Finally, we can develop a Farecast equivalent to predict the best time to go into market. Interest rates might go up and down, depending on supply and demand. With such volatility, having a way for market participants to predict the interest rates could be an interesting play.

If you have more ideas, do leave them in the comments.

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Posted in: finance 2.0,Personal