Prompt's TechBlog

Free as in 'liberated', of course. That's the idea behind Prosper, a community site that enables people to borrow money off each other. It uses an Ebay-like reputation and bidding system. Someone says they want to borrow money, and others then bid, specifying how much of it they're prepared to lend and what interest rate they want in return. Prosper transfers the money, and makes regular payments from the borrowers to the lenders. There's a very real risk that the borrowers default and the lenders lose their cash, so we're not sure this is going to take off in the long run. The only sanction appears to be negative feedback.

Ebay works well because the risk is normally pretty low. There have been some high profile scams, but most of the transactions are for fairly low value items. I can't see Prosper being effective in increments of less than $100, and to be honest, I would be nervous about spending that amount on Ebay.

It's good to see that dotcom spirit is still alive and new ideas are coming out, though!