I've blogged here before about Prosper.com, the site that puts individuals together as lenders and borrowers. If loans go bad, Prosper will take care of collections efforts on behalf of the lenders.
What I'm hearing from Prosper lenders isn't good; a lot more loans are defaulting than they expected. The early days of feeling great about lending money to someone who truly needs it have given way to cautious lending based solely on creditworthiness and debt-to-income ratios. (I think I predicted as much.) I like that more people are learning that credit scoring isn't some evil scheme designed to punish one class or another, and that in fact it serves a useful purpose for all parties involved in a lending situation.
But it does take away some of the novelty of Prosper. The idea that you're helping a real life human being instead of a set of numbers seems to have waned.
My idea is this: how about partnering something like Prosper with something like Wesabe? I saw a mention of Wesabe.com in an advertising circular I get in the mail. They describe it as a site where "(y)ou upload your entire bank-account and credit-card information, and the site maintains a running list of every transaction. Then, you get advice from other users on your spending habits." The idea of laying one's personal finances bare in such a public forum may sound scary, but a lot of people are benefiting from it. Reminds me a bit of the online tools offered by Weight Watchers; you use the site to put in every meal you eat, and they track your points and give you advice and pointers on what you're doing wrong. Plus they have an active message board community where people swap recipes, cooking tips, etc.
So say a lender on our Prosper-like web site has a loan that's going badly. S/he can check the borrower's Wesabe page and see how their budgeting is going, and perhaps even offer them some assistance or advice. It may sound like a recipe for disaster, but so did Prosper and Wesabe to some people. It would take a real shift in thinking to grasp it.
This is kind of like credit counseling; many people simply don't get the concept, and they assume that credit counselors must be lackeys of the creditors. If your world view only has room for 2 types of people, good and evil, then you have to shoe-horn counselors into one side or the other. It doesn't match reality, but most Wikipedia editors don't care about that.
But even if we grant that corporate banks are evil lenders, most individuals who lend through Prosper probably aren't. If the borrowers were willing to voluntarily use something like Wesabe to share budget information with their lenders, couldn't that end up being good for all parties?