Now, I'm a big fan of Zopa, the UK p2p loans market that connects lenders with borrowers and cuts out the institutional middleman. This is the same approach that Craigslist took to the classifieds marketplace. The web allows people to establish networks efficiently and the gateway monopolies that currently act as clearing houses for all manner of simple human connections are going to find themselves increasingly squeezed by the online population taking this disintermediatory approach - intermediaries are going to have to offer genuine value-add if they are to take a cut of this action.
This morning I first saw Kiva.org, and my first thought was "wow". In Kiva's own words, "Kiva lets you connect with and loan money to unique small businesses in the developing world. By choosing a business on Kiva.org, you can "sponsor a business" and help the world's working poor make great strides towards economic independence."
Now that Gates and Buffet are giving away their billions the spotlight is on everyone in the developed world to try and help where they can. Kiva is a mechanism that (currently) lets people loan money to developing-world entrepreneurs for no interest. So far, so philanthropic. But given that the loan recipients are building businesses, there is palpably a space here for Kiva - or someone like Kiva - to turn this into a viable business proposition from both ends. Philanthropy is, alas, limited and inefficient, and what makes markets work is the interplay of tangible benefits on both sides. The developed world is swimming in cash but growth is hard. The developing world has almost endless room to grow but negligible investment capital. Something that combined the best features of both Zopa and Kiva, that let entrepreneurs in the developing world get the cash they need to build infrastructure and lets investors in the developed world achieve both philanthropy and capital growth would be big news. Happily, Kiva's FAQ says the following:
"Q: Do I get interest on my loan?
A: No. Kiva’s loans do not provide a financial return on investment. We hope to offer interest to our lenders someday soon."
Here's waiting for that invisible hand to kick in.