You don’t have to be financial genius to know that past few years have been rough for the average American household with so many foreclosures the mass layoffs and the critic crunch. It’s not surprising to see that there has been a lot of unemployment and even more troubling under employment. Under employment is a curse when a person has a job but the job doesn’t pay it enough to provide a living standard that the under employed person is used to. Or many middle class people used to live high in the hog are now basically scraping by. They have jobs but they’re living paycheck to paycheck. As a result their jobs can truly be a described as an acronym JOB means just over broke. If you’re in this position and you really want to breakfree from that financial hole that you’ve found yourself in, you can use social lending websites to truly breakfree however there are some social lending websites that are better than others. Some social lending sites collect money from members of the collective to lend to another member at an interest. This is classic social lending. However there are many other versions.
Common versions of social lending
The most common version of social lending is the model described above. Groups of people would congregate online and they would put up money and they would decide who will receive the money and the person will pay interest back to the group. Websites like kiva and others use this model. However there are other models. Lendo uses another model where groups of people lend out money and there are sorts of controls. A very interesting model is the Yattos model, it uses a very interesting and ancient way of raising money quickly. “Revolving credit”.
The ethnic revolving credit model
This model is one of the oldest way immigrants in the United States raise money. The model works this way. Five friends would get together and agree at the end of every month they would put a fix amount of money into a common pot. If there are five friends, that money will be distributed to five people in turn so this means that on month one, one of the five will get the collective pot. Everybody gathers again and on month 2 and contributes the same amount of money but another person in the group will get the pot of money. This goes on and on until all five members have taken a turn collecting the collective cash. People have used this revolving credit system and pulled savings system to buy houses to build businesses and build business empires to the United States.
Yattos automates revolving credit
Yattos great innovation is that it uses online software to automate the process of a savings pull, identifying people, contacting people, communicating with people and collecting money. As you can well imagine, this were the hardest parts of manually coordinating a savings pull especially if your savings pull comprise of several of several dozen of people. Regardless of how big your network of contribution is, Yattos can accommodate you because it meshes will with social network tools like Facebook and twitter. The great thing about Yattos that it is self policing. Unlike a borrowers’ attitude towards credit card debt or a bank debt there are more restrained and careful when dealing your friends and family. Most people that would join savings pull are organized through Yattos.com are friends and family. They may live in other countries or they may live on the street but they are still friends and family. Since you don’t want your family and friends to hate you because you stole their money you have built in internal mechanism to repay your debt. It is very powerful and promising technology. It talks about combining social networking and crowdsourcing into a nifty financial package. It would be very interesting to see how Yattos shapes up and develops in the future.