Fascinating developments in the world of micro-finance.

Online auction giant eBay last year launched a microlending website that lets people invest in entrepreneurs in poor communities around the world and get a return on their money. Website visitors can browse investors by country. They can see pictures of people seeking loans and read about their business goals. MicroPlace connects investors with micro-finance organizations in the various countries. And it scrutinizes the organizations to check their legitimacy. It's also registered as a broker-dealer with the Securities and Exchange Commission.

Does that sound like Kiva, the peer-to-peer lending non-profit? Yes and no.

The big difference is that Kiva provides a portal that connects lenders and borrowers. And it's a non-profit that also collaborates with micro-finance institutions around the world and has
lots of backing from legal teams working pro-bono. More insights into the way Kiva works from the Stanford magazine and from Kiva co-founder Matt Flannery.

Microplace, on the other hand, is a business. As P2P Lending News explains, Microplace loans are securitized, which means they can be traded, and lenders will earn interest.

So how revolutionary are these developments? According to Integrated Regional Information Networks, there are a number of concerns. Like the difficulty monitoring the effectiveness of micro-finance and as a panacea that does not actually address the causes of poverty.

Similarly, INSEAD Adjunct Professor Mahboob Mahmood says microfinance is not a silver bullet and won't alleviate poverty by itself. It can only work, he says, when it's done in conjunction with other strategies.

Still, there is no doubt these new developments are challenging traditional banking models. And thousands of low income families are being given some hope for the future.