How successful as reliable these Micro Loans, Peer-to-peer lending systems are? I was looking into DhanaX.
Please give your comments on pro and con sides of these kind of peer-to-peer fund lending system. Wouldn't it be better to stick to traditional banking systems rather than looking into these sort of things.
I see them as new and fascinating concept spreading gradually.
Originally posted by Chandra Bhatt: How successful as reliable these Micro Loans, Peer-to-peer lending systems are?
I don't know enough about that specific site to comment on it, but the concept won a Nobel prize in Economics, and its had big impact on society where its been tried.
peer-to-peer lending is all that there was before banks. And today's Credit Unions are pure peer-to-peer. They are just scaled a bit higher, typically used for car loans, where micro-loans are typicaly used to buy a sewing machine.
I think its too risky if you are not there, with the folks getting the loans. Then again, the typical loan is tiny, so if you lose it all, you aren't likely to starve. The folks getting the loans are already close to starving, which is why the normal banks won't lend to them.
But as I said, I don't know anything about the specific, so I can't comment on that. If I knew some woman who wanted a loan for a sewing machine, I'd probably do the loan.