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Peer-to-peer lending:

Does your giving need a kick-start?

Let us set the stage by imagining two scenes — the first, perhaps unfamiliar, the other so utterly ubiquitous many readers may not even consider it beyond the weekly routine. First, imagine you are a consumer at a bazaar of some exotic locale. Booths stuffed with wares, insistent arms beckoning you closer, and the ever-present hum of voices calling you like siren-song to choose this shop or that particular vendor to bestow your wealth upon in the ageless game of bartering. Your money for their goods.  

The second scene is set beneath vaulted ceilings over polished pews, soft lighting illuminating a diversity of heads from aging grey to bobbing, blonde curls, all doing to same thing in unison: leaning over at the tell-tale angle as hands reach for wallets and change purses, pushing aside the odd peppermint. The collection plate is coming around. My money for your ministry.

So how are these two scenes connected?

Each offers a certain vision for wealth distribution — one capitalist and the other devotional. Both transactions share this element: multiple sources of income flowing into one deposit.

A third scene, added more recently, requires only a change of company — you, sitting alone at your computer, perusing hundreds of individuals and projects all desperate for you and possibly a thousand others like you to invest in their proposal. Your fistful of change added to the change of others will equal enough funding to produce a film, an album, an invention or even consolidate a person’s debt, all the while benefiting you as an investor. That is the nature of a quickly growing segment of financial planning called crowd-funding or peer-to-peer lending, often referred to as P2P lending. So what is this movement, and will the trend influence how we strive to engage every inch, including the three inches of credit card in our pockets, as Christ intends?

Social lending
The most advertised and buzz-worthy of these crowd-funding providers is likely Kickstarter. Kickstarter.com is a website that allows individuals or groups with almost any concept that requires funding to pitch ideas online. Those seeking money in this manner must explain their project and sell their vision at the same time, as well as state the exact dollar amount they wish to raise. Those willing to invest in the project can pledge their chosen amount, and if the project reaches its set funding goal, the money will be transferred from the investor to the project. If the project fails to reach its goal, no money changes hands. The proposal simply floats away into internet oblivion. Kickstarter boasts that over $1 billion in pledges has been funneled through their efforts to deserving entrepreneurs and, at the time of this article’s writing, 58,028 successful projects have been kickstarted into production globally. The website touts this method as “the most democratic way art has ever been made.” At the very least, this method allows the actual consumer instead of advertisers to decide which projects should make it to market, resulting in fewer wasted resources, both financial and natural. That is something which, as Christian stewards of creation, we can all support.

Other more profit-based P2P lending sites are designed in business-world style, with term limits and interest rates being applied to these peer loans, rather than donations. In this fashion, an individual requiring an infusion of capital to fund a wedding, or re-finance existing debt, or invest in an expanding business can hock their needs online and you, as a budding investment banker, can lend your spare cash to the stockpile and be rewarded with a handsome return on interest when the loan is repaid. The individuals who seek such loans are often unable to receive credit in traditional ways, like through a bank, and require innovative ways to expand. While there is more risk in this venture as an investor, as there always will be when collecting repayments from fallible people, there is also more and relatively simple gain to your bottom line. Before we start imagining strong-arm tactics to collect debts and dark rooms where men in hats discuss deal you cannot refuse, let’s consider what this could mean to a Christian community which is quite used to pooling its money in order to better the lot of others worldwide.
    
Giving patterns
The question that presents itself is whether this new form of lending and borrowing will find users within the church. If an individual can choose not only where to donate or how many ephemeral goats to ship to another continent, but instead can choose who to donate to, will our patterns of giving change? If P2P lending through the internet can bring givers and receivers into intimate and interactive contact, will people begin to look askance at their church’s weekly collection plate and wonder if they can identify a worthier mission field on their own?

Christina de Jong of World Renew Canada told Christian Courier that there has definitely been added interest for online giving, and that the growth has been “exponential.” Much of the recent effort on World Renew’s part has been to streamline all online forms, websites and formats to better accommodate mobile and tablet users. Donations via traditional collections remain steady, but this new revenue stream has become a very popular alternative.
I suspect that the vast majority of tithes and offerings will continue through the usual channels, helping many non-profit organizations continue life-changing and faith-building work all over the world on our behalf. Perhaps in the near future, options for P2P giving and lending will also become mainstays with such ministries.  

The internet will certainly, if it hasn’t already, change the way people of all nations communicate, learn about one another and struggle to share the gifts God has bestowed upon them in Christ-honouring ways. Whether it is at the exotic bazaar or local prayer meeting, in person or online, Christians will continue to engage timely trends with eternal wisdom.

Let’s pray the crowd gets behind that idea.

  • Tom Smith is a teacher living in Barrie, Ont. with his wife Sarah and son Jakeb.

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