Rachel Botsman is a social innovator who writes, consults and speaks on the power of collaboration and sharing through network technologies. She has inspired a new consumer economy with her influential book What’s Mine is Yours: How Collaborative Consumption Is Changing The Way We Live. TIME Magazine recently called Collaborative Consumption one of the “10 Ideas That Will Change The World“.
Platforms for lending
Peer-to-Peer finance or crowdfunding now represents a market of 1.5 billion USD, and platforms like Zopa (UK) are rapidly gaining marketshare. In the video below, Jules (from ABC) and Rachel Botsman, collaborative consumption expert, examines the emerging industry of ‘Peer to Peer Finance’ which lets you borrow money securely from strangers instead of banks.
In much the same the way music sharing sites bypasses the big record companies, peer-to-peer lenders sidestep the banks. Cut out the middleman! There’s still some risk involved. From a lender’s point of view, the loans are unsecured. Zopa reports that it had to write off 0,84% of the 200 million pounds of its seven years in business. Another UK-based platform, Funding Circle, reports a 2,8% default on loans. It is worth noticing that these default rates are significantly lower than the 3-5% regular banks report.
“Reputation is a currency that will become more powerful than our credit history. It will make the résumé seem archaic.” ~ Rachel Botsman