Digital Currency Social Lending on Facebook

The history of social lending goes back to the 1800s however, since the creation of the Internet, social lending has gained massive popularity around the globe. Web sites such as: Prosper http://www.prosper.com, The Lending Club http://www.lendingclub.com/ and Zopa http://www.zopa.com/ have opened the marketplace and social networks like Facebook provide a direct user connection for these services. As an alternative to traditional banking, everyday borrowers are increasingly seeking funds from social lending networks. This week, The Lending Club surpassed $1,000,000,000 in loan demand, while announcing that during the month of February the company hit a new monthly record in loan applications.

Unlike Zopa http://www.zopa.com and others where lenders are matched with borrowers by a profile based on the terms of the deal, 'digital currency social lending' on Facebook occurs direct between existing known contacts. Borrowers seek money from family, friends and people whom they already know. For example Webmoney lenders will have already connected online before the creation of a loan. The digital currency social loan is crafted by borrow and lender working out their own terms directly with each other.

Other social lending platforms such as GreenNote https://www.greennote.com/ were set up as alternatives to traditional banking but focused on a specific group of borrowers. GreenNote's social network was created to help students obtain loans for education and schooling. Webmoney Transfer permits lending to any other Webmoney user.

Just as digital currency is money that circulates outside of normal banking channels, social lending is borrowing that takes place outside of traditional banks. Social lending or P2P lending is generally recognized as a private financial transaction (lending or borrowing) which occurs directly between individuals without the participation of a traditional financial institution such as a bank. Webmoney's Facebook application makes it easy to loan or borrow from another user with just a few clicks of the mouse. Since Webmoney offers more than 50,000 exchange points in over 40 countries where users may convert digital Webmoney into national currency, all transactions completed through Facebook's Webmoney application have real financial value.

For over a decade Webmoney Transfer has been using the Internet to construct new ways for customers to interact with global financial services. This development of a Webmoney social lending application for Facebook is a direct response to new Internet social trends. The growth of online lending highlights the steady demand for new types of online of digital currency products.

Offered for Facebook and Vkontakte users, this social network application is a relatively new Webmoney service. It easily allows Webmoney or Vkontakte users to borrower directly from another Webmoney user. In case you are unfamiliar with Vkontakte, it is the most popular social network service in Russia, Ukraine and Belarus. With more than 57 million users it is the leading web site across Europe in terms of user visits, page views and data transfer per day. Translated into English "V Kontakte" is "In Contact", but basically means "In Touch".

To borrow funds through the social network you first ask a person from your Webmoney contact list to set you up with a trust limit.

A user's Trust Limit pegs the borrower's maximum limit for any transaction and is a general reflection of how much the other Webmoney user trusts the user! After the Trust Limit has been set, friends and associates are permitted to borrow directly from through the lenders Facebook or Vkontaket account at any time. This direct P2P lending connection provides flexibility for the borrower and lender to negotiate their own loan terms.

Both interest-bearing and interest-free loans are possible.

Neither Facebook nor Webmoney charge any additional fees for this transaction. The process is simple to complete: when receiving a loan the user agrees to the terms, registers the loan and receives the funds into their purse. Repayment of the loan can occur in parts or in full, ahead of schedule or at the end of the Loan Period. The funds are returned to the same Purse which originated the loan.

Person-to-person lending models, such as this one, attempt to reintroduce social components that are lost in traditional centralized banking transactions. The Webmoney Social Lending application is a fully operational virtual purse Social Lending platform. It allows a user to focus on borrowers and lenders whom they already know.

Webmoney/Facebook users can:

• Invoice a Facebook friend or another Webmoney user
• Send Webmoney to any Facebook friend
• Send Webmoney to make payments for services and utilities such mobile phones, internet or TV. (users across Russia and Ukraine only right now)
• Loan, borrow or pay back loans to any other Facebook/Webmoney user using the Social Lending application
• Top up your account using one of Webmoney's prepaid cards, (purses include WMZ, WMR, WME)
• Top up your Russian based WMR account using one of the convenient pay terminals

The ease of use for this application is stunning. With one click of the mouse, account holders can loan cash to friends, repay debts or "lend to all offers". Details of the loan are worked out between each party and there are no additional fees on top of the normal 0.8% Webmoney transaction fee. Only the sender will be charged. Other social lending companies such as Prosper generates revenue by collecting a one-time fee on funded loans from borrowers, and assessing a 1% per annum loan servicing fee to lenders. Webmoney social loans have no additional fees.

Since this application is rather new, right now there is a daily limit is 30 WMZ (usd), 1000 WMR, 20 WME.

Specifics of the Loan Transactions (the fine print)

All loans are made in WMC units which is a type of e-currency in the WebMoney Transfer system. WMC e-currency is a simple loan obligation (the obligation to transfer the creditors a certain sum of WMZ within a set period of time). The amount of units in a WMC-Purse coincides with an identical quantity of WMZ (the U.S. Dollar Purse) WMC is equivalent to WMZ for credit operations. In other words all of these loans are transacted in the value of U.S. Dollars and the unit for lending is found in the WMC-Purse. A C-Purse is used for the accounting of received credits.

Users may only have one WMC-Purse and once created no one can delete this purse. The C-Purse transaction history stores the permanent records of ALL promissory notes issued to creditors. Consequently, if you develop rotten credit, you can't hide it!

On the other side of the account is the WMD-Purse. (No, that does not mean Weapons of Mass Destruction) WMD is a type of e-currency which is equivalent to USD for credit operations in D-Purses. Again this is just a simple unit of accounting for loans that a user issues to other users. In other words, if you are on the receiving end of the transaction you would get WMC. If you are the originator of the loan sending it out, you are paying out WMD and all transactions are accounted for in dollars.This is an amazing system to use and in case you have not yet connected through the Webmoney Social Lending application on Facebook visit it here: http://apps.facebook.com/webmoney/