Thesis (MPhil (Sociology and Social Anthropology))--University of Stellenbosch, 2010. / ENGLISH SUMMARY: This study explores the application of Web 2.0 thinking to development studies. It specifically addresses ‗online social lending for development' as an example of ‗Development 2.0,‘ the subject of an ongoing conversation between the fields of information and communication technologies (ICTs) and international development. The paper has two aims: to develop a definition of Development 2.0, and to explore an empirical example of a Web 2.0 model that seeks to alleviate poverty. Reflecting on the literature pertaining to ICT for development (ICT4D), the investigator establishes preliminary principles of Development 2.0: facilitating citizen participation and voice, encouraging collaboration, increasing transparency and enabling relationships. These principles are then considered in the context of online social lending for development, with a particular look at Kiva.org, the microlending website at the center of the study. The empirical research for this case involved several months of interaction with some of Kiva‘s primary stakeholders in San Francisco, CA and Kisumu, Kenya. As a Kiva Fellow, the investigator engaged in participant observation, focus groups, analysis of secondary data, email interviews and weblog interviews with various people involved in the Kiva system. Stemming from this investigation, the author offers a descriptive and exploratory case study of Kiva‘s operations and its level of Development 2.0 integration. With reference to this Kiva case study and the initial Development 2.0 principles, the investigator offers a new definition: Development 2.0 is the application of Web 2.0 thinking to development studies. Development 2.0 practice takes advantage of networked social interaction and data generation, reaching the ‘long tail’ of the world’s poor; it actively employs transparency, collaboration, and citizen participation with the aim of continual, reflexive improvement in sustainable human-centered development. The author concludes that Kiva is a relevant example of Development 2.0, but it does not offer full transparency to all stakeholders, nor does it take advantage of the full possibilities of networked social interaction, which could lead to more holistic development for Kiva borrowers. The author argues that Development 2.0 principles have intrinsic value, and should be pursued as both a means and an end for ICT4D practice. The paper ends with a call for further research into Kiva, Development 2.0, and the practice of online social lending for development. / AFRIKAANSE OPSOMMING: Hierdie studie stel ondersoek in na die toepassing van Web 2.0 beginsels vir ontwikkelingstudies. Dit spreek spesifiek ‗aanlyn sosiale lenings vir ontwikkeling‘ aan, 'n onderwerp wat debat ontlok tussen die velde van Inligting en Kommunikasie Tegnologie (IKT) en Internasionale Ontwikkeling. Die verhandeling het twee doelwitte: om 'n definisie vir Ontwikkeling 2.0 te ontwikkel en om ondersoek in te stel na 'n empiriese voorbeeld van 'n Web 2.0 model wat die verligting van armoede nastreef. Na 'n refleksie oor die literatuur wat met IKT‘s verband hou, stel die navorser die voorwaardelike beginsels van Ontwikkeling 2.0 vas: die fasilitering van burgerlike deelname en inspraak, bevordering van samewerking, verhoogde deursigtigheid en instaatstellende verhoudings. Hierdie beginsels word dan oorweeg in die konteks van aanlyn sosiale lenings vir ontwikkeling, met spesifieke ondersoek na Kiva.org, 'n mikro-lening webwerf wat sentraal tot hierdie studie staan. Die empiriese ondersoek vir hierdie gevallestudie het verskeie maande van navorser-interaksie met van Kiva se primêre rolspelers in San Francisco (VSA) en Kisumu (Kenia) behels. Die ondersoeker het as 'n 'Kiva Fellow‘ deur middel van deelnemende waarneming, fokusgroep onderhoude, benutting van sekondêre bronne, e-pos- en webblog onderhoude met verskeie persone betrokke in die Kiva stelsel in wisselwerking getree. Na aanleiding van hierdie studie, bied die navorser 'n beskrywende en verklarende gevallestudie van Kiva se werksaamhede en vlak van Ontwikkeling 2.0 integrasie aan. Met verwysing na hierdie Kiva gevallestudie en die aanvanklike Ontwikkeling 2.0 beginsels, bied die ondersoeker ‗n hersiene definisie aan: Ontwikkeling 2.0 is die toepassing van Web 2.0 beginsels tot ontwikkelingstudies. Ontwikkeling 2.0 praktyk trek voordeel uit netwerk-sosiale interaksie en data-generering, wat die ‘verste punt’ van die wêreld se armes bereik; dit streef aktief deursigtigheid, samewerking en burgerlike deelname na; tot die bevordering van die aaneenlopende, refleksiewe verbetering in volhoubare mens-gesentreerde ontwikkeling. Die ondersoeker kom tot die gevolgtrekking dat Kiva 'n relevante voorbeeld van Ontwikkeling 2.0 is, maar dat dit nie volwaardige deursigtigheid vir alle rolspelers bied nie, en nog minder van die geleentheid gebruik maak om voordeel te trek van die volle moontlikhede van netwerk-sosiale interaksie, wat tot meer holistiese ontwikkeling vir Kiva leners kan lei. Die ondersoeker argumenteer dat Ontwikkeling 2.0 beginsels 'n intrinsieke waarde het en nagestreef behoort te word in die praktyk as beide ‗n middel tot en ‗n einde vir ‗IKT vir Ontwikkeling‘ (ICT4D). Die verhandeling word afgesluit met 'n oproep vir verdere navorsing oor Kiva, Ontwikkeling 2.0 en die gebruik van aanlyn sosiale lenings vir ontwikkeling.

Syfte: Syftet med undersökningen är att beskriva och analysera finansieringsformen P2P-utlåning, dess bildande och utveckling samt utvärdera hur den har fungerat för små- och nyföretagare. Problemformulering: Studien undersöker hur finansieringsformen person-till-person-utlåning via Internet uppstod. Vidare redogörs för utvecklingen på P2P-plattformen Lending Club sedan låneförmedlingens start 2007 fram till 2011. Slutligen undersöks vad som kännetecknar låntagarna på Lending Club som ansöker om lån till små och nya företag samt hur de presterat gällande deras återbetalningsförmåga. Teoretiskt ramverk: Studiens teoretiska ramverk utgörs av framförallt vetenskapliga artiklar vilka behandlar det finansiella gapet, informations-asymmetrier och kreditbedömning. Vidare återges en bakgrunds-teckning över studier gjorda kring social utlåning och P2P-utlåning. Slutsatser: Studien kommer fram till att P2P-utlåning via Internet har sitt ursprung i social utlåning och möjliggjorts genom bland annat teknologisk utveckling av kreditvärderings-verktyg. Lending Clubs utveckling har gått från mer av ett socialt nätverk till att idag likna mer en finansiell intermediär med kreditvärdiga låntagare och institutionella investerare. Medlemmarna på Lending Club som lånar till små och nya företag kännetecknas av högre kreditvärdighet i jämförelse med övriga låntagare samtidigt som de presterar sämre i termer av återbetalningsförmåga. / Purpose: The purpose of this study is to describe and analyze P2P lending, its formation and development and evaluate how it has worked for small businesses and start-ups. Problem statement: The study examines how person-to-person lending through the Internet has emerged. Furthermore, the study examines the development of the P2P platform Lending Club since its inception in 2007 until 2011. Finally, the study examines the characteristics of the borrowers at Lending Club who are applying for loans to small businesses and start-ups, as well as how they perform in terms of their ability to repay their loans.        Theoretical framework: The theoretical framework consists mainly of scientific articles regarding the financial gap, information asymmetries and credit rating. Furthermore, studies on social lending and P2P-lending are presented in a background chapter. Conclusions: The study concludes that P2P lending through the Internet has its origins in social lending and made ​​possible by foremost technological development of rating tools. The development of Lending Club has shifted from more of a social network to more of a financial intermediary with creditworthy borrowers and institutional investors. Members on Lending Club that borrow to small businesses and start-ups are characterized by having a higher credit rating compared to other borrowers, while they perform less well in terms of ability to repay.

Background: Peer to peer lending has in recent years emerged and become a popular way to borrow money, mostly in the US and the UK. Since the first company was established in 2005, several competitors have emerged, and P2P lending has grown on average by 84 % quarterly between the second quarter year 2007 and the second quarter year 2014 in the US. Lending Club, which is the largest player within P2P-lending, has since its start in 2008 carried loans of a total value of six billions USD. Aim: The purpose of the study is to identify and analyze P2P lending and its preconditions to operate on the Swedish consumer credit market. Completion: A qualitative approach was selected where the empirical data partly consist of primary data collected through interviews and partly of secondary data in the form of a literature study on P2P lending. The empirical data lays ground for a comparative institutional analysis in which the transaction costs of P2P lending is compared to traditional bank lending. Conclusion: The study shows that P2P lending in Sweden have higher transaction costs than traditional bank lending. The main reason for this is the uncertainty associated with P2P lending in the current situation. However, the study shows that P2P lending through technological innovation can maintain lower transaction costs in the assessment of a specific borrower's repayment capacity. For the concept to grow, society’s knowledge about P2P lending needs to increase and the legal framework needs to be more clearly defined. / Bakgrund: Peer to peer-utlåning har under de senaste åren vuxit fram och blivit ett populärt sätt att låna på, främst i USA och Storbritannien. Sedan den första aktören grundades år 2005 har flera aktörer vuxit fram och i USA har P2P-utlåningen vuxit med 84 % per kvartal i snitt mellan andra kvartalet år 2007 och andra kvartalet år 2014. Lending Club, som är den största aktören inom P2P-utlåning, har sedan starten år 2008 förmedlat lån till ett värde av totalt 6 miljarder USD. Syfte: Studiens syfte är att kartlägga och analysera P2P-utlåning och dess förutsättningar att bedriva verksamhet på den svenska konsumentkreditmarknaden. Genomförande: Ett kvalitativt tillvägagångssätt har valts där empirin dels består av primärdata som insamlats genom intervjuer och dels av sekundärdata i form av en litteraturstudie på P2P-utlåning. Empirin ligger till grund för en komparativ institutionell analys där transaktionskostnaderna för utlåning genom P2P jämförs med traditionell bankutlåning. Slutsats: Studien visar på att P2P-utlåning håller högre transaktionskostnader än traditionell bankutlåning. Den största anledningen till detta är den osäkerhet som är förknippad med P2P-utlåning i dagsläget. Dock visar studien på att P2P-utlåning, genom teknologisk innovation, kan hålla lägre transaktionskostnader i bedömningen av en specifik låntagares återbetalningsförmåga. För att konceptet ska växa krävs det att den allmänna kunskapen om P2P-utlåning ökar, samt att regelverket under vilket P2P-aktörerna verkar blir tydligare definierat.

Despite its benefits, online peer-to-peer lending bears the risks associated with traditional forms of institutionalised lending. However, because individuals have taken over the role of the institutional lender, and the institutional participant in this form of lending takes a step back by acting only as an intermediary between the borrowers and lenders, ordinary individuals are left to bear the type of risks that institutions have traditionally borne, but without the same means of doing so. There has been little academic analysis of the role and form that regulation should take in the regulation of peer-to-peer lending and most discussions centre on the American regulatory experience. This thesis sets out to examine the theoretical classification of online peer-to-peer lending and the theoretical and practical justifications for regulating it. The aim is to ascertain the most appropriate way to regulate peer-to-peer lending, taking into account the underlying conceptual model which underpins it. The study adopts a theoretical analysis of P2PL participants and regulation based on the concepts of consumer protection and paternalism. It includes a doctrinal analysis of the UK peer-to-peer lending legislation and regulation to identify, describe and explain the rules pertaining to the industry. It also uses a comparative approach to compare P2PL with existing forms of financial lending and similar (dis)intermediated forms of transacting between individuals to show that online peer-to-peer lending is a unique form of intermediated transaction. The thesis argues that it is important that regulation displays an understanding of the underlying conceptual framework of the business model it aims to regulate. In doing so, it also argues that the peer-to-peer lending users are more than just ‘consumers’. They demonstrate a shift in the conception of individuals from consumers to prosumers because they participate in the production side of the services they receive. It goes further than existing discussions of prosumption by positing the concept of the ‘lendsumer’ to give a more accurate account of the role and experiences of peer-to-peer lenders and the effect this has on their transactional relationships and the risks they face because of this role. Based on this analysis, the thesis shows that the UK regulatory regime has limited suitability because it lacks awareness of the underlying prosumption model of peer-to-peer lending, focusing only on the business-to-consumer aspects. Consequently, it does not resolve all the issues resulting from the tripartite, participatory nature of the peer-to-peer lending transaction. In light of these findings, the thesis proposes the regulatory use of two main concepts and highlights their implications for peer-to-peer lending regulation. The first is the ‘lendsumer’ as a new paradigm of the consumer which has implications for the regulatory protections afforded to the P2P lenders. The second is the use of gatekeeper liability, adapted to online peer-to-peer lending, as a way to affect these protections in light of the particular vulnerabilities and risks experienced by the peer-to-peer lender.