Coding with Jesse

Lend money to make money

May 17th, 2006

There is a new online peer-to-peer loan concept that is growing, and I think it's a great idea. (Via slashdot). Two new companies, Prosper and Zopa, are allowing people to ask the public to lend them money. Anyone can bid on lending the money, stating their own interest rate. Whoever offers the lowest interest rate gets to lend the money (and make the interest).

The result? A pure capitalist financial system that doesn't involve banks. Anyone can get a loan, and anyone can make money by lending money. Everyone benefits.

This also reminds me of Kiva, a web site that lets people lend money to those in developing countries. I think this is a great alternative to just donating money since it helps build up the economy in these countries. It's very cool to see the idea being extended to the rest of the world.

Update: Only people in the US can use Prosper, and only people in the UK can use Zopa. I hope they (or others) make this available to the rest of us (specifically, Canadians living in Germany)!


1 . The Ultimate Groupie on May 20th, 2006

The Ultimate Groupie

This is an even better idea than the last one. I love the fact that people are making money from interests and not banks. It's truly a win-win situation. Thanks for posting it, I will definitely be looking into this one!

2 . Thomas on July 12nd, 2006


Is there any other websites like this that are open for canadians residents



3 . paul on August 23rd, 2006


you can't lend money and charge intrerest without a consumer creit licence

4 . Brian Mullally on May 14th, 2007

Brian Mullally

While <a href=""></a> caters mainly to the US market, there’s another site called <a href=""></a> which caters to the global crowd, especially those living in the third world.

5 . [email protected] on April 9th, 2010

c-had & ira01, thanks for your perspective. It’s interesting to see that some do really well with P2P lending, and others do not. I do think we need to be careful about drawing conclusions based on a relatively small data set. That said, it’s important to remember that P2P lending involves unsecured consumer credit. This shouldn’t be compared to corporate bonds or other less risky debt instruments. Unsecured consumer debt carries with it a lot of risk, both of default and interest rate risk (although at a 3 year term, the interest rate risk is manageable). c-had, I take your approach to investing with the vast majority of my portfolio. I have enjoyed lending on Prosper and Lending Club, but it will always represent a very small percentage of my investments.

Comments are closed, but I'd still love to hear your thoughts.