Early in 2008 I commented on the shaping of a post-imperial world where the flow of investment funds, and coporate takeovers, was coming from the East to the West, with China, India, Russia and the Gulf States recycling $ reserves and new found wealth into weak and failing companies in the West.

The catastrophic implosion of the US financial system in the last year has merely emphasised this change in the balance of monetary might.

So when Kiva, that beacon of social entreprenuership, decided to offer loans in the US itself, there was a huge intake of breath. The US needs microloans??!!!

Of course it does. How do small businesses get funded? Normally by people taking out second mortgages, borrowing from friends or ramping up credit cards. In fact I’m told many businesses fund cashflows problems using personal credit cards. Why?

Because banks have a model where they lend on housing as collateral…oh yeah that worked well…not.

The old fashioned approach to banking (one my father was involved in for 42 years) was lending to small business people and supporting them through the ups and downs of the business cycle. Investing in people and creating relationships of trust.

I think we are headed back to this and it’s peer to peer lending that is making this happen. The web itself has allowed these bonds to be built, that’s what networks are after all. Lots and lots of micro connections. Isn’t that the amazing thing about the web? It’s so huge and vast yet it’s simply a conglomeration of molecules connected together.

I know I’ve been bagning on about this for ages but banking, like media, will be forced to change. The micro world is causing new networks to be created, new bonds to be formed and new efficiencies to be found.

Harnessing the power of the web is allowing this to happen.

Microfinance has shaken up the banking world. I enjoyed reading Matt Flannery’s piece on the Kiva story.

Microjustice will no doubt change the legal world in due course.

We already have microrelationships, micromedicine surely on the way.

And the biggest prize of all………..microgovernment.

The change is coming, the inexorable march of system reorganisation is humming away in the background. It’s not top down, it’s an unseen mass movement with no control function. A pure chaotic system in action, free to develop and receive feedbacks in real time.

Who would have thought a lender from Domenica would be funding a borrower in the US.

Yes times are changing.

I’ve been following the spread of microfinance for a while and have been getting involved with Kiva which has been a great experience. I have also noted the rise of social lending businesses such as Zopa, Prosper and even Facebook. Jason has written a good piece on the rise of new forms of financing.

What interest me further is whether all finance can move to a P2P platform and seriously eat into the major lending markets currently controlled by the commercial banks.

I think it could do. This crosses the web with money and complimentary currencies.

Remember that anyone can create “money” if they really want, it just can’t be in the form of bank notes issued by the Reserve Bank. Commercial banks create bank loans by a simple bookkeeping entry. Only 2% of the money supply in NZ is in the form of notes and coin so banks don’t actually hold any money other than a bit of cash.

My point is that P2P finance could take off in a very big way once we get the hang of it. My guess is that the firms currently involved don’t realise how big this could be.

Expect the central banks to cast their beady eyes over these operations once they get a roll on. For now it’s just some web bizness but this feels like 1694 all over again.

Following on from my previous piece I have just viewed a couple of interesting videos projecting how the web may develop in the future courtesy of Richard MacManus.

Whilst there is a certain amount of PR spin and product placement going on here they are both worth a look at if you have a spare 15 minutes. As i noted previously it is reminiscent of the 1920s and the media battle that took place from there on. Same stuff, different technology?

You can catch them here

Where would we be without the internet? Could we live without Google for a day even? Well they tried that and found there are plenty of other engines out there worth looking at. But the real question for me was not whether we could live without Google for a day but whether Google is still the future of the internet.

This is a more challenging question. As Branton Kenton-Dau, my colleague over at VortexDNA, notes the internet is a self organising system constantly feeding off the energy provided by creators and imaginators. So far Google has kept this energy focused through itself by either developing new services or simply buying in what they like.

There is no problem with big…..big can be good but big requires a lot more energy to self-sustain. The beauty of the web is that it reflects demands so quickly. It is essentially democratic in its processing, beautiful and free…well not quite. It has the capacity to be controlled and regulated which we have seen all too frequently.

But i have a feeling that the internet as we know it may reorganise itself by deconstructing and coming back to life in a different form. This may well be opposite to what we have now where we go out to look for things. In the next stage of development things will come looking for us. We will be the filter for our web and we will be the center of it.

There will be no more ranking only relevance decided by us. We will configure the web to ourselves with no one interfering with or controlling what we see. I’m excited about this vision because it offers so much.

How we get there is anyone’s guess but that’s the beauty of systems.