Abstract:

Microfinance refers to the entire range of financial services such as savings, money transfers, insurance, production and investment credit as also housing finance and includes the need for skill up gradation and entrepreneurial development that would enable them to overcome poverty. With the birth of  internet, a new form of non-bank lending has arisen, borrowing from traditional reliance on trust within communities but extending the concept of communities beyond geographic boundaries. The Person to Person (P2P) lending is a platform for mobilizing capital and it directly connects and provides benefits to individual lenders and borrowers. This lending market, which began as a web-based market between borrowers and lenders in the same country, has begun to expand internationally, extending virtual communities and linking lenders in developed countries to borrowers in developing countries. This paper is an exploratory study of the different models employed by the existing P2P funds. Three micro finance organizations are chosen for this purpose. The Rang De, DhanaX and Kiva. Through these sites, investors are able to access a broader range of investment opportunities previously available only to institutional or high net worth individuals, while P2Ps offer borrowers a convenient source of loan capital, often at more favorable terms than formal financial institutions. The social networking market has brought fame and fortune to a number entrepreneurs and have harnessed the viral nature of social networking to support nonprofit causes.