The Money Matchmaker

I helped pay for a boob job. Only it wasn’t for my breasts. They belonged to a 43 year old mother of five from Vancouver, Washington whom I had never met. But after reading about her situation, I couldn’t help myself. “Kool-mom” had written up an enticing, humor-filled loan request on Prosper.com, a website that merges the worlds of internet auctions and personal loans. I was so eager to help make her “dream come true”, that I bid on her request repeatedly. “Why should this adorable homemaker and decorative artist have to live her life without a bust? I don't. Let’s fill out those A-cups!” I thought. And the mostly male lender community agreed that this was a worthwhile cause.

Kool-mom eventually garnered 95 bids. Towards the end, it was like an eBay auction as eager bidders competed to loan this woman money at increasingly modest rates. Kool-mom’s final loan was for $6,000, and it was paid by 39 lenders including $50 from me. Her APR was 8.43%, well below the financing charges available through plastic surgeons and better than the 19.9% she could obtain through many credit card issuers. So long as she doesn’t default, Kool-mom’s lenders will receive 7%, a rate that handily exceeds money market returns.

This is America's answer to micro-lending, and my piece on it was published today in the Wall Street Journal and again here, in its Startup Journal. If financial polygamy sounds like fun, it is. Fortunately, when you get involved with lots of strangers in this manner, there is more potential for heartburn than Chlamydia.