By "scalping lenders on the risk premium" do you mean the lenders through the website or the local lenders (what Kiva calls "Field Partners"), and... what do you actually mean by that?
What I took from Kiva's website - and what is explicitly spelled out in their terms of service (http://www.kiva.org/legal/terms) (section 1.5, Principal Loss Scenarios) - is that a lender shouldn't lend anything that they're not prepared to lose.
Having read a little about CDOs, I can see some resemblance between the two - loans on Kiva are paid for by many people, who may be paid back in a particular order, and they're also granted to people who can't easily get loans through local banks.
The differences are the way it's presented (Kiva does appear to be marketing in a similar way to charitable giving), the fact that you do not get any extra return when loaning to someone via Kiva, and the fact that it is not sold as a super-safe investment made of magic and unicorns despite being a loan to someone who may not be able to pay it back.
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timeasmymeasure
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Date: 2011-12-20 10:03 am (UTC)What I took from Kiva's website - and what is explicitly spelled out in their terms of service (http://www.kiva.org/legal/terms) (section 1.5, Principal Loss Scenarios) - is that a lender shouldn't lend anything that they're not prepared to lose.
Having read a little about CDOs, I can see some resemblance between the two - loans on Kiva are paid for by many people, who may be paid back in a particular order, and they're also granted to people who can't easily get loans through local banks.
The differences are the way it's presented (Kiva does appear to be marketing in a similar way to charitable giving), the fact that you do not get any extra return when loaning to someone via Kiva, and the fact that it is not sold as a super-safe investment made of magic and unicorns despite being a loan to someone who may not be able to pay it back.