Yep, the profit motive was mentioned over and over again in the SEC document, and it seems that was the key. Because of the profit motives, loans on Prosper qualified as securities, and hence the SEC regulations applied. With Kiva, there's no way for the lender to profit, so the same SEC regulations don't apply to Kiva.
I wonder if there's a way around this: instead of an explicit interest or profit, make it a trade-based market:
I'll give you X dollars-today, in exchange for 1.1X dollars-N-months-from-now.
Or I'll give you X dollars-in-a-month in exchange for Y Euros-today.
Does the SEC regulate currency trading markets?
And, if not, why can't dollars-today and dollars-6-months-from-now be traded as separate currencies [taking into account expected inflation/deflation, as well as the time-value of money]?
Still, you are giving some amount of today's dollars in return for a larger amount of tomorrow's dollars. That implies some effective interest rate over that time period. Also, while most financial institutions use compound interest, the concept of simple interest also exists.
They can and are. They're called "FX forwards", and what's more the technique you described is exactly the one the Medici family used to make their fortune (avoiding the usuary laws of the time).
However it doesn't work if you can't guarantee a fixed rate of interest (as in this case).
Banking is a racket and they can practice usury all they want. They just hate competition, that's all. Credit cards have 21% limit in some states and no limit in others. How's that for usury?!
