19 Jul 2007 | Comments |
Make Money Tips |
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Avoid Loan Shark, Use Microfinance at Prosper.com
In Malaysia, loan sharks are so famous that there are even songs written for them and published at youtube with music videos. I have several friends who involve in this kind of business of lending money without license. The return is very high although it is very risky. For those loan sharks who are able to manage the risk properly, it is a really profitable business practiced centuries ago, started by the Jewish.
How lucrative is it? Imagine the interest rate is actually 4%. Oh .. 4% is just “kacang” (means peanuts in Malay language). .. hey pal, it is 4% per month. So it is actually 48% per year. Your loan amount will double in 2 years!
Adventures In Money Making posted an article about microfinance. In the post, I was directed to Prosper.com. Prosper is a website act as a middleman for lenders and borrowers to meet. Now you don’t need to have a license or take the risk as loan shark. Loan shark is a life threatening career when your debtor is too desperate that they might do something silly. Just join Prosper and you can loan money and get a loan easily.
Before you can loan money to others, you will have to transfer funds into your Prosper account. Although they refer to you and other individuals as “lenders”, the
loans are being made by Prosper and then sold to you, making you a loan
purchaser. The term “lender” is used through the site for the sake of
simplicity.
Image: Process of lending money at Prosper
Prosper also provide the credit score of the borrower. You can bid on any amount of the loan in dutch auction style.
Image: Credit score
I do hope that there will be such a microfinance service available in Malaysia. I have seen people living from paycheck to paycheck. Some have no choice and turn to Ah Long (nickname for Loan Shark) for help.
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