Home > Uncategorized > would you lend money to your facebook friends??

would you lend money to your facebook friends??

I have about 220 facebook friends at the moment, if they all decided to lend me just 100 quid I would have enough cash to do quite a number of  things including re-model my kitchen, put down a year’s lease for our new office and possibly buy about two laptops! A new site has been launched in the UK called Quakle http://www.quakle.co.uk/home.do. They are a peer to peer lending site that faciliates lending between borrowers and lenders. They apparently check credit worthiness by analysing what connections the borrower has online in terms of ‘social rating’. They have now added other factors such as external credit checks due to lenders demanding this, but they still base their social ratings on what the borrowers do online.. forget about going to the bank branch, just get 1000 facebook friends, Twitter until the cows come home, get yourself on mySpace and Bebo and you’ve built yourself an enviable credit rating! Only time will tell how sustainable this interesting model will be, but it is a very interesting shift in to banking 2.0 in a social media context that is worth watching!

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Categories: Uncategorized
  1. November 19, 2010 at 6:02 pm

    Interesting question.

    I might decide to give my friends a gift of money if someone needed it — which they could pay back if they wanted — but I would never lend money to my friends. As William Shakespeare advised: “Neither a borrower nor a lender be.”

    The project you mention, Quakle, is an interesting concept. I would consider participating in a project like that. If I did, I would approach it as an experiment and not expect to ever see my cash again. If I were to be pleasantly surprised and actually get paid back for my loan, I then would consider re-investing this sum. Of course, I would never spend the grocery money in this way, but I might use some money I have set aside for non-essentials or for entertainment. Sometimes a small loan is all someone needs to better his lot in life.

  2. November 19, 2010 at 9:57 pm

    thanks for your comment. Interesting that you mention a gift of cash, which is definitely different from a loan with an interest rate attached and a loan agreement to boot! Quakle is a very interesting concept indeed but they have now modified their model to include a review of the borrower’s credit status before he receives any loan, which to me is even worse, how awful is it to share my credit report with my facebook friends and twitter followers? surely some things should be left between a girl and her bank manager!!!

  3. Agatha
    December 13, 2010 at 3:11 pm

    I think this is a brilliant concept – Social media may as well be good for something. Think of the Kenya merry-go-round system – its pretty much the same thing, except that the friendships are not virtual. I really like this idea…..hmmmm

    • December 14, 2010 at 11:27 am

      thanks Agatha for your comment! definitely yes- there is no doubt that the ‘lending to your facebook friend’ concept does has a close connection with the African ‘chama system’-(chama is a swahili word and means social group- people-normally women- contribute funds each month to one member of the group who decides what they want to do with the capital, and this individual then makes a contribution the next month to the next member etc etc) key issue to consider is that the chama system focuses on peer group trust as a measure for ensuring loan repayment/ contributions.. being socially connected to someone on facebook may not necessarily mean that we trust them and their ability to pay back a loan! (think of all those ex- school mates, ex- work collegaues, long lost relatives etc to whom you’re connected!!) there are ways to deal with this such as credit reports, collateralisation of the loan etc but I firmly beleive that in future this is going to form the crux of the new banking and credit world, there WILL be a dearth of the traditional VC to provide start-ups with capital , there WILL be an end to the banks holding the only (inaccessible) key to obtaining capital for small businesses.. continue to watch that space!!

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