Peer to Peer Lending

Here's a great audio of what's happening in peer to peer lending from NPR this morning:

Morning Edition, November 4, 2008 · Borrowers hurt by the credit squeeze and investors looking to boost their returns are increasingly turning to the same place: peer-to-peer lending. The loans can be quicker than going through a bank — and offer rates of return that can beat those of government bonds.

Companies such as Lending Club and Prosper Marketplace match individuals who want to borrow money with those who have money to lend. The process happens online, without a trip to a traditional bank.

One look at Prosper.com gives you an idea of this marketplace with 830,000 members and $178,000,000 loaned. In the current economic times with tight credit I'd expect peer to peer lending to explode.