Cyber dis-intermediation hits banking

SAN FRANCISCO, Dec 15, 2007 (AFP) – The Internet is directly connecting investors and borrowers, letting them take banks out of the lending equation and put their money where their hearts and dreams are.

People have lent each other more than 100 million dollars through Prosper.com since it launched in February of 2006 and the US website has partnered with SBI Holdings to expand into Japan.

Peer-to-peer lending website Zopa has been operating in Britain since early 2005 and began offering its service in the United States this month.

Flamboyant British entrepreneur Sir Richard Branson bought CircleLending, a six-year-old US Internet company that manages loans between friends and family members, and rechristened it Virgin Money.

Kiva, which arranges for people to make micro-loans to those trying to start businesses in poor countries, was honored this month with a 100,000 dollar grant from fast-growing on-demand computing company SalesForce.com.

“I think what is really attracting people is that a person can look at somebody’s story and consider circumstances that a bank or institution might not,” said Fiona Ramsey of California-based Kiva.

“There is value humans can place on a s