Friday, November 30, 2007

MicroPlace: Now you Can Become an Microfinance Investor

Awhile back I shared my fantasy investment portfolio which included Microfinance. I've researched opportunities to become a microfinancier, but found very few places where one could do this - Equal Exchange CD's (included in my links) was the main option I could find. These CD's are actually a credit line for fair trade coffee farmers. Kiva, a non-interest bearing loan site, has taken off like crazy - so much so that the demand to fund people has outstripped the supply of vetted loan recipients!
I was excited to learn that Ebay has a new site called Microplace where you can invest your money, loaning it to developing country entrepreneurs, at modest interest. [These loans are not guaranteed, but microfinanced individuals have a very high rate of return; they are supported and vetted by microfinance organizations.] The interest rates are way below competitive market rates, but your loan will have a very positive impact on a whole family working its way out of poverty, so that benefit is something which cannot be monetized. If you feel squeamish about charging poor people interest, know that their alternative until microfinance has been loan sharks. So loaning money at a fair rate of return is an immense improvement.
It is inspiring that high-tech money is helping to support these fledgling instruments for investing money around the globe. Pierre Omidyar, a founder of Ebay, has invested a large part of his huge fortune in microfinancing, including setting up a center for Microfinance at Tufts University. Ebay is supporting MicroPlace's efforts and donates its services; likewise PayPal (an Ebay company) donates its services to Kiva. I love how this social entrepreneurial spirit is growing!
As it happens, I am an Ebay stockholder. I haven't made a lot of money, but as a shareholder, it makes me feel really good about this investment. You can read more details about Microplace at BusinessWeek.

1 comment:

minimum wage said...

It looks like poor people in the developed world just might be the last ones on Earth to get loans at reasonable rates.