Peer-to-Peer (P2P) lending and crowdfunding platforms use digital marketplaces to connect individual savers directly with micro-enterprises and low-income borrowers, bypassing traditional banking intermediaries.
The P2P Intermediation Channel
[Retail Saver / Funder] <--- Lists Capital Reserves ---> [Central P2P Web Portal] ---> Disburses Funds Direct ---> [Micro-Enterprise Project]

P2P lending structures lower borrowing costs but introduce significant default and liquidity risks for investors. Regulators manage this perimeter by enforcing strict platform rules:
  1. Mandatory Fund Segregation: Platforms cannot hold investor capital on their own corporate balance sheets. All funds must clear through ring-fenced escrow accounts at regulated commercial banks.
  2. Explicit Diversification Limits: Capping the maximum investment a single retail saver can allocate to an individual project to reduce default exposure.

 
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