Picture the following scenario: Reuben needs to borrow money, and Shimon is happy to lend it to him. Unfortunately, Shimon won't lend Reuben the sum that he is after without something in the way of collateral, and Reuben owns absolutely nothing. Not to worry: Shimon strikes upon a brilliant solution. He gives to Reuben, free of charge, a brand new car. Then he lends Reuben the money, using the car as collateral.
Absurd, yes? So explain to me how this is any different to the procedure of the prozbul, which we learn about in the Mishna, Shevi'it 10:6.
אין כותבין פרוזבול אלא על הקרקע. אם אין לו, מזכה הוא בתוך שדהו כל שהוא
We do not write a prozbul unless it be on land. If he [the borrower] has none, he [the lender] grants him some from his own field, of any size.
Here, the implication appears to be that without some form of land as collateral, the bet din won't take responsibility for the loan. But, as with the example that I gave above, in the event that the debtor defaults on the loan, the compensation is now coming from property that was previously owned by the lender!