A friend alerted me to the launch of Prosper.com, a person-to-person lending system (read: disintermediating banks). I was super excited when Zopa.com launched in the UK and thought it was only a matter of time before the US would have its own service.
So Prosper has arrived. It has an amazing management team and investors (E-Loan co-founder is CEO, investors include Bob Kagle from Benchmark and Jim Breyer from Accel).
So if you are tired of getting .5% interest from your local bank who in turn loan your money at 8-18% interest, you may want to check out Prosper.
This model definitely beats the “When Banks Compete You Win” model where the banks still take a big slice of the revenue. Now, the people funding the bank loans are directly competing for your loan, so the big slice out of the middle goes away.
Loan rates will decline. Interest to lenders will increase. Banks will lose big time as this catches on.
Among the next industries to be disintermediated: insurance.