Microfinancial e-Marketplaces: Why Do People Lend Money to Strangers Online?

• In Event: Public Interest/ Diversity

Abstract

With the help of electronic marketplaces, microfinance has evolved from the formation of groups with the purpose of borrowing money to the formation of groups with the intent to lend money. While the rest of the world is busy holding on to their money, millions of people now go online to lend their money to strangers. On the surface, this does not appear logical but an investigation of lender motives using data provided by www.kiva.org leads us to believe that individuals want to make a difference in someone else’s life. This study examines theories from psychology, sociology, physiology and economics to create a model of lender motives in microfinancial e-marketplaces.

Authors

• Cynthia Khanlarian, Concord University

• Rahul Singh, The University of North Carolina at Greensboro