Crowdlending: Just one part of a sharing economy

Vintage 'pool it' poster encouraging car sharing (from the US national archives)

When world economies have recovered, our children have grown up and discussions about the global credit crunch are more suited to history or economics lessons rather than making front page news, what will be the lasting legacy of the economic turmoil we’ve all endured over the past few years?

Regular readers might already have seen our collection of inspirational quotes from Youngme Moon’s book Different.  If not, take a look…  it might get you thinking about how to stand out of the crowd, in the meantime, do you agree with the idea that “the storm has refocused us all in some collective way.”

There’s a growing band of people who think the credit crunch will turn out to be far more than a blot on an otherwise upwards graph of prosperity and consumption.

Even people who are managing to ride out the storm well on a personal level seem affected by the general consensus that it’s time to stop prioritizing greed, financial success and growth at the expense of everything else.

If a recent article in the New Statesman is to be believed, the time has come to adopt a sharing, caring attitude…

“So what can peer to peer activity bring to the twenty-first century table where the feast is rapidly diminishing and what’s left is meted out so unevenly?  The answer is an economy based on collaboration rather than individual ownership, trust rather than status, adaptation rather than standardization.  The answer is a sharing economy.”

The article, Collaborative consumption: the new economy, caught my eye for a number of reasons.

First of all it began with a quote from a book I greatly enjoyed as a student, (Don DeLillo’s White Noise), then it continued by exploring some of the themes of the book I’m reading right now, What’s Mine Is Yours: How Collaborative Consumption is Changing the Way We Live  by Rachel Botsman.

So, that’s my bookish obsessions satisfied, but why is all this relevant to the FundingKnight blog?

Well, because crowdlending (or peer to peer lending if you prefer) is one of the new sharing activities that Botsman talks about in her book.

When she writes, “The convergence of social networks, a renewed belief in the importance of community, pressing environmental concerns and cost consciousness are moving us away from top-heavy centralized and controlled forms of consumerism towards one of sharing, aggregation, openness and cooperation” she covers many of the values we hold at the core of FundingKnight.

New finance is all about moving away from top-heavy corporations towards leaner, agile networks, which can connect people for mutual reward.

What started out as kids having fun online and morphed into the global giant of social networking now has the power to genuinely change the world for the better, and there is certainly plenty of wastage to start cutting out.

Apparently, the average drill is used for just 15 minutes in its lifetime which is a pretty sad indictment on our consumerist tendencies…

There’s wastage, too, in the financial system.  Plenty of people are seeing their cash dwindle away in easy access savings accounts that barely manage to keep up with inflation – despite its recent falls.

Now, peer to business lending isn’t for everyone.  Yes, there are risks and you shouldn’t invest money you can’t afford to lose and yes, there’s a road to climb before such lending is ready to go mainstream but one thing’s clear, putting cash to use investing in British businesses has the potential to become hugely more efficient for both lenders and borrowers than mainstream finance.

What’s more, crowdlending manages to promote sharing without asking people to give up their individual identities.  Borrowers get more choice and flexibility and can build their own loans, whilst lenders choose where their money goes and build individual investment portfolios.

It’s well summed up by Mark Levine, writing in the New York Times,

“sharing is to ownership what the i-pod is to the eight track, what the solar panel is to the coal mine.  Sharing is clean, crisp, urbane, postmodern; owning is dull, selfish, timid, backward.”

The words are emotive, but there’s something in them.  So many sectors and industries have already undergone a massive shift in power from corporates to customers.  New finance is about the financial sector making that shift.

This is collaborative consumption at its best…“(it)is not asking people to share nicely in the sandbox.  On the contrary, it puts a system in place where people can share resources without forfeiting cherished personal freedoms or sacrificing their lifestyle.”

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2 thoughts on “Crowdlending: Just one part of a sharing economy

  1. Pingback: FundingKnight Likes…Streetbank | FundingKnight: The Blog

  2. Pingback: Crowdlending and the banks of the future | FundingKnight: The Blog

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