I was eating lunch at work, and listening to the conversations about refinancing and the costs of getting loans. A co-worker brought up the idea of micro-lending. I have heard of micro-lending before, but really did not pay much attention. Most of the lending seemed to be to other countries where the cost of living was much lower than most Americans. In today’s time and economy, with stricter guidelines and policies for acquiring loans, what options are we left with when the banks say NO? Since the third quarter of 2008, I have been downsizing, and selling off non-essential items and frivolous toys. Many things were sold on Ebay, or Craigslist, but the money only goes so far. When the money is gone, what’s one to do?
     For micro-lenders the idea is that investors can get together and evaluate what you are asking to borrow money for, and before saying no. After all, who better to decide to loan you money: A bank that looks at your credit score, your job, and friends and referrals, or a business minded group of individuals who evaluate your business idea or products, and take into consideration your potential and credit value? Maybe one could goes as far to say that micro-loans are more of a personal loan. I would also probably take it as a compliment that a group of investors willing to extend a loan to me are actually silently voicing approval for my future success.
     Have big banks lost some of their personal style and charisma? If a bank wants to hold my money in an account and make money from it, I don’t mind as long as I get a hello and smile when I make my deposits. But lately with all the additional fees and restrictions, some banks are driving customers away, or forcing them to consider conducting their financial business elsewhere. Are micro-lenders a short term answer for present day needs, or are they a hint of change to larger financial institutions?