"Peer-to-Peer Lending" - Something for the Freestate project?

[Cornfed]

This is relatively new, but the idea had been in practice for a while now.  I just haven't seen this posted or heard this talked about.  It's a lot like the peer-to-peer networks (bittorrent) used for file sharing, but instead of sharing files, you are sharing loans.  You put money into the network, and together with many other people, you create a huge pot of money that can be used for loans.  In order to get a loan, you need to have a personal recommendation from someone with money in the network (reputation).

Putting your money into a P2P lending network is similar to putting your money into a bank except there is risk.  People can and will default on loans, but since your money is distrusted you don't have all your money in a single loan.  Just a small part.  Just like diversifying investments in a stock market.  It does remove the bank and it's profits from the picture though.

There are a few networks that are already up and running.  Is anyone already doing this?  How do you like it?  Do I have the 'jist' of it?  Imagine setting up a 'Free State' network where you have to register into a reputation program or something to get a loan.

 Wiki Article
 http://en.wikipedia.org/wiki/Peer-to-peer_lending

 From USA Today
 http://www.usatoday.com/money/perfi/credit/2007-12-25-peerlending-min_N.htm

[Alex Libman]

Awesome concept, but needs to be implemented correctly by people with serious financial, economic, and risk management know-how...

[bushwacker]

This has been brought up on the FSP and/or NHFree forums before. I'd go over there and talk to those people if you haven't already.