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  • Writer's pictureJohn Brandy

Alternative Lending & Micro Lending

Updated: Apr 5

What's our listener anchor for the week?

Their Lighthouse, right?

Kuf. Their one-sentence takeaway.

Oh, you mean that bit that goes at the top of the show notes?

Yes, that bit. That sentence. That, you know, thing.

The world is full of ways to invest. Too bad that lending to other people isn't one of them. At least not without being a bank I mean.

That's not true.

Correct, that's not true, at least not anymore.

I haven't done a "randomized" topic in the past few weeks, so this will be interesting.

Randomized topic?

Yeah, let's talk about that. My topics randomizer.

I have this tool where I put in a list of things to talk about, in no particular order.


When I set up a new weekly pod, I "spin the wheel" so to speak on what the topic will be.

So I never know what the topic will be very far in advance.

Are you sure you want to talk about it?

Oh of course - these are timeless topics. I just don't get to know when.

So it's even more likely that you'll be working hard to bring it all home.

Hope so!

Today we're going to talk about three larger topic areas.

Alternative Lending.


And Peer-To-Peer Lending.

And I'll do some specific examples.

We'll talk about how you can invest in types of farming, like crowd farming.

Hold the details. That's a rabbit hole.

That's a what?

A rabbit hole. You know, those things you want to avoid?

Oh, so you mean hold the examples?

Yes, until I ask for them. (That's part of why I'm here).

Okay, so I'm going to let you ask all the questions, too!

Big threat. I already do. I even write most of them.

Go on...

Kuf. Kuf. Okay, what's the 1st option in this story? Or rather,

What is alternative lending?

I thought you'd never ask! But first, tell me how excited you are to learn!

I positively shudder with pleasure at the mere thought!

I not only like what you said...I like the way you said it!

Alternative lenders provide funding to close a financing gap - just like with a regular loan...


Except that this is outside of traditional banking. These aren't traditional loans.-

How do you mean?

It could come from financial institutions that just aren't banks. Credit card companies. Mortgage lenders. Business lenders.

Anywhere else?

Yes, in fact within the last 10 years or so the whole idea of crowdfunding has fully blossomed and begun producing less obvious ways to let individuals like you and I get involved.

But that's just for riskier borrowing cases, right?

Nope, not any more than any other lending. I mean, yes, you do need to pay attention, but you need to pay attention anyway, not just in this case.

We're ready for that example now.

I have two.

We have time for one.

Okay, I'll save the other one for the tie-in later. For now, you can go so far, if it fits your goal, as to participate in...


No, not crowdfunding. That's later.

Right, then this is...

Crowd-Farming. Really. It's a thing. If you want to know more, ask me.

And after this break - two more things.

Two more things?


Before the break, you said we'd be talking about two more things.

That's your thing. I was just place-holding for you.

(Thinking In Echo): Well, at least he's good for something.

Did you just - think - something?

Yes, here - I'm doing it again.

What Is a Microloan?

That's pretty good, DT!

You don’t hear of many $2 loans in the United States, where $2 won’t buy you more than a chocolate bar. But in cities like Lagos, Nigeria, and Nairobi, Kenya, $2 has the buying power of roughly $40 US. This is good for economic development!

But I can see why it's not really "micro"...

Not really "micro", yep. In terms of loan size it is, but it's not micro from the perspective of the one receiving it.

That last sentence alone is something…

People should write down, I know.

Maybe you should do it for them.

I think I'll try to teach even better first.

And even with that, you want to take a minute to feel this out.

See if it will fit your goals!

An example of sources of capital like this are Acleva of Cambodia, or Kiva,

Who doesn't sponsor us...yet.

Well, they are potential investors, but for now you're right. So I'll be quick, talking about places which take technology to make loans without needing to meet and interview them first. They've been added to over a million mobile phones in the last 6 years.

And they cure poverty on the side.

Well, no, they don't cure poverty. But money can, if it's used right. It's better to increase productivity and add jobs, but investing can be a close second in the financing search.

And certainly not something to forget.

No, not for any of us.

And what else don't we forget?

This teensie little break.

Something in my heart tells me that the last option coming up has something to do with investing.

That's completely prescient of you, DT. The devil is my consumer loans expert.

I'm not the devil. But something in my head tells me that the last option coming up is Peer-to-Peer Lending.

That's how mind-sharing works!

Example, again.

Oh, sure, got one right here. I'm ready to make a positive impact with details.

Peer-to-peer lending is the exact same thing as crowdfunding.

Exactly the same?

Okay, not exactly. Peer-to-peer lending USES crowdfunding at its core.

But crowdfunding can be used for more than just that.


Do YOU do it?

I do, DT. In fact I make it policy to do everything myself before I ever suggest it to someone else.

So you can follow along, I use the Prosper.Com online platform to do this.

It's not the only one, and some of our listeners may have a different favorite.

That's okay, right?

Absolutely! We don't get paid by one platform or the other, at least not yet.

And if we do we'll say so out loud.

Right, DT, WAY Out Loud. Along with your credit score.

I heard that.

Yeah. I was just checking to see if you were listening.

But back to my example...

Imagine you wanted to remodel your kitchen.

Bank Loan, here I come!

But you don't want to go to traditional lenders.


Different idea for another show. Just say you want to try crowdfunding platforms.

You go to a place like Prosper, or maybe Peerform, or maybe another similar funding circle...

And you put in your request: how much, how long, and all that gets added to your history just like a "real" lender would do.

Anyway, you need $50,000.00.

Which comes from private lenders

Good question! I certainly don't want to loan that much. Say I want to stop at $500.00. I don' t know you well enough for big amounts of money.

That's a bit short.

Not if 99 other people want in on the deal too.

Yeah, if. But before I cheer on P2P platforms, why would they?

Because as online lenders they get the same big interest rate. And for a whole lot less risk.

That's too cool for school.

You bet it is. I mean, you know it is.

And not only do you get the high interest.

And less risk.

Yes, and less risk, but you can also set it up to be automatic!

Automatic how?

Add more money once a month (which I insist upon), loan only to excellent credit, and other stuff.

Interesting. And this is an investment, right?

Alternative loans are investments. And when you think about what traditional banks are giving for savings accounts, I'd say that's definite.

Having a savings account in the current market is not going to get you any competitive rates.

More like the lowest rates.

Yes, and that's not going to work. Don't act like you have bad credit when you don't.

You don't have to say anything more. I'm going straight to the remember thing.


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