I think this is a good idea. I already lend/invest via Kiva and would support it expanding to cover the whole globe. I don't see why the micro-financing model should just apply to the so called developing world. Why not any cash strapped small business anywhere? This makes more sense since the global financial markets accidentally flushed themselves (and all our money) down the toilet.
The actual function of traditional banks in an economy is to enhance liquidity by buffering money and lending where required, keeping the money flowing around the economy. I think we could probably cut out the middleman and do this mostly peer-to-peer, without traditional banks - via micro-financing over the internet, kiva style. Now might be a good time to get this working.
I think we could probably cut out the middleman and do this mostly peer-to-peer, without traditional banks
This would be the utopian future.
Traditional middlemen make their money by leeching surplus from both a buyer and a seller. In economics it's called Producer's Surplus and Consumer's Surplus: http://en.wikipedia.org/wiki/Economic_surplus
The wikipedia article mentions that if the government intervenes, the graph becomes more complicated as it must be modified to also include room for "governmental surplus," but in reality, any third-party that "intervenes" in the transaction eats away surplus from either party. This is how banks are allowed to charge people $ for overdrafting, yet still charge them "service fees" per month along with interest rates for whatever they fancy.
One thing for sure: you're probably right in that now would be a great time to get this working!
If kiva ever manages to give a small interest on the loans, I expect it explode in popularity. But there's probably huge legal hurdles to doing that? Or are they ideologically opposed?
Probably a bit of both. At present I don't see why they shouldn't be at least as popular as a normal charitable donation. With Kiva, your money goes to some real individual, they use it to build their business, tell you about what they did, then the give the money back - and the cycle repeats indefinitely. One donation lasts forever.
