Investorial

Blogs have tremendously revolutionize the way news and information are distributed. No longer do you need to be a traditionally trained journalist to get your words heard. Bloggers and blogs are obtaining scoops, exclusives just like their old media counterpart. Services are popping up like NowPublic.com that have fueled the citizen journalism movement.

However, from a financial perspective, the Web 2.0 has brought in some interesting applications that may point to a brave new world in the future. Prosper.com wants to become the online marketplace for people-to-people lending. Borrowers can shop for attractive from fellow lenders. These lenders are ordinary people like you and me, who can set their own rate. Members can also borrow and lend as a group! It seems like Prosper has put in place a lot of security features to prevent abuse of the system. However, the service network currently does not extend beyond the United States. It’d be interesting to see when someone from Canada will be borrowing from a lender in China!

Along the same lines is Fundable.org, which seeks to allow groups of people to pool money to make purchases and raise funds. Unique to its system is its ability to set fund raising goals and letting people pledge their contribution. Only when the goal is met will the pledges be binding.

Prosper.com and Fundable.org are 2 examples of the future in citizen banking, or citizen financing. No longer are consumers on the lowest end of the money game. Now, anyone can become a bank on both ends. Borrowers can scour for low interest loans to finance their investment activities, making the profit and paying little for the cost to use the money. Investors can charge high interest returns to people who are not looking to deal with banks. There are numerous applications possible in this realm. Will citizen CDs and term-deposits be far away?

I believe citizen banking is a offshoot of the micro-lending movement. It remains to be seen if this revolution will take off.

P.S. I wonder if the Pentagrams in both logos are trying to reference the conspiracy theories of a world bank or chosen to display connection between people. Just an observation, don’t read too much into it!

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