Microlending: The secret credit solution?

April 15, 2008 · Filed Under Technology · Comment 

Micro-lending

The Internet has grown up. I can get porn anytime I want, watch my tv recordings anywhere in the world, music is free (well - almost) and everyone and their grandparents are linkedin or on myspace. What else is left?

So - you aren’t surprised to hear that you it has become popular to be your own bank online. Yes - that’s right - with little effort you can lend anyone else money via the Internet. Total strangers, taking your money - doesn’t that sound like a terrific plan?!

Well - it is.

Another example of the Internet flattening the economy and world.

Sites such as kiva and prosper have cropped up in the last few years and have coined the phrase microlending. The sites act as middlemen. They provide the meeting place and structure for a lender to meet up with a borrower - the transfer of money and logistics. Microlending is possible because hundreds of lenders can all join in to fund one single loan.

Let’s say Bob needs 10,000 to fund his new car. He can visit a microlending site - and ask the community for the $. Lenders can bid on the amount of the loan they would like to fund as well as the interest. If the loan is fully funded - it is executed. If not the borrower usually tries again.

This basic system facilitates a few things:

  • Let’s the lender earn a higher interest rate then available at the local bank
  • Bidding process allows competitive rates for qualified borrowers
  • Allows high-risk borrowers a new source of funds
  • By lenders pooling together on each loan the overall risk is lowered.

Is it too good to be true?

Try to visit Kiva which is the first website ever to introduce person-to-person online micro-lending .

Kiva has a social aspect as well - in that it allows people to lend directly to certain business owners in the developing world. It offers interaction between members since you will be able to choose for yourself the lender you wish to make a loan to.

Within the entire phase of loan, the lender will be able to receive updates through email journals, so they can better follow repayments. The moment when full payment is made, the lender can again re-invest the money to someone else in need. To avoid fraud, the folks at Kiva are continuously working to make the system more transparent.

Prosper.com is the other leader in the micro-lending game. They are a strict for-profit entity and rake a hefty percentage off each transaction.

Indeed, lending money online is a faster and smarter way to get your much needed cash. By doing so, you can avoid seeking help from family and friends (and ruining relationships). ! What’s good about this is the fact that both the lender and the borrower are able to benefit from each other.

The same financial responsibility is required when taking out a micro-loan. Most sites have partnerships with collection agents and the loans appear on credit reports (just as bank loans would).

Many will see these sites as an answered prayer - but to get the best deal as possible there are still some few tips that one should consider.

Lenders:

  • Same rules as using ebay.  Be careful.  Alot of good people out there - but many ill intentioned ones as well.
  • Do your research.  Most sites have users credit records available. Be thoughtful and prudent.
  • Set your risk level.  Before you bid on any loans decide what your personal risk level will be. That could be a $ loss, a certain credit worthiness, etc.  But determine it ahead of time.
  • Relax - and enjoy.  You will have bad loans.  That is part of lending.  You can minimize it when bidding based on lending criteria.   But once it is out there don’t beat yourself up for it.
  • Learn and improve.  Everything is an experience.

For borrowers:

  • Act like you are applying for a job.   Brutal honesty is need and full disclosure will help you get the loan.
  • Be reasonable.  You have a much better chance looking for a low loan amount then 15k.
  • Be heartfelt and genuine.   Tell a good honest story in the application.  Whether it be starting a new job, opening a business, etc.   The better story you tell the better chance you have.
  • Credibility.  Most sites allow for friends to refer you or testify on your behalf.
  • Explain all credit history.  Fully explain any items of note on your credit history.

MicroLending Sites:

Kiva.org

Prosper.com

Microplace.com

 

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Adobe Flex

April 12, 2008 · Filed Under Product Reviews, Technology · Comment 

Adobe Flex is gaining more traction as a  development platform.  The framework produces a flash based output which can be consumed universally by clients agnostically to browser, OS or type.   Flex is much easier to edit and create then native flash formats, using an easy to learn scriptable language.

As a web developer, you may always find yourself looking for possible web development applications that would suit your needs, providing a balance of rapid development, easy maintenance and wide cross-compatibility.

Most make use of JavaScript, Active-X and/or  AJAX in order to make your sites dynamic and interactive.  These traditional frameworks allow for rapid deployment - but necessitate heavy graphical work to make the app user friendly.  

To answer the need for better application, the Adobe flex was released which is an open framework for creating significant web applications that that can be installed on major browsers, desktops, and operating systems.

Adobe Flex paves the way to make advanced application that can be used by traditional programmers. Before its release,  traditional flash programmers spent hours with actionscript creating customer friendly but difficult to maintain flash-based apps and sites.  The Flash platform  was innovative and gained critical traction as a default standard over years. 

Taking the next step Adobe’s Flex seeks to reduce the problem through the means of providing a workflow and programming model that is familiar to developers. It is programmed with MXML which is an XML-based markup language offers a way to rapidly build and lay out graphic user interfaces. Furthermore, one can also take benefit of interactivity by using ActionScript which is essentially the core language of Flash Player which was made using ECMA Script standard.

Like any other applications, the Adobe Flex has also its limitations. It is still a Flash application and therefore it is limited to what a Flash player can do. True interaction with the desktop is difficult - the Flex platform is not a browser, but is usually a web-based delivery (ie. drag and drop from Desktop to a Player is not feasible).  This should be made possible through the release of  Apollo.

The Flex popup window is limited to being shown within the dimensions of the player that created it. Incomparable to the popup window in a browser in where you can relocates them to your desktop, the Adobe Flex popup windows can’t go outside the area occupied by the player. Also, the Flash SWF format is a published specification meaning, it is doable for other vendors to create tools that produce Flash files.

Because the introduction of Adobe Flex was favored by the public, the Flex 2 which is an improved version of the first was made which is programmed with command-line compilers and a comprehensive class library of user interface components and utilities.

This program can be downloaded for free and it has no limitations or restrictions compared to the first. There is also the Flex 3 which was launched on April 26, 2007 and is equipped with Flex Builder IDE and the LiveCycle Data Services.

Adobe  proclaims that in the near future they will launch the Flex 4 with Gumbo as a code name. The product plan has yet to be completed and although no one really knows what feature this one has, it is surely better than the other 3.

Flex is worth a look as a development and delivery platform if you are willing to work with a Flash based system.  Take a look if you were turned off by Flash years ago and haven’t kept up with it.

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