Wednesday, March 24, 2010

Move over Kiva, MicroPlace helps the working poor and gives an investment return

Microlending is a great concept. Kiva provides a way for average American consumers to participate and fund microloans for the working poor around the world. But, Kiva does not offer any financial return to investors. Zero. Zilch. Zip. Nada. Nothing. Sure, as a charity, Kiva is great. But it doesn't fit into any investment strategy. Lending Club and Prosper do provide decent investment returns, but focus on lending to creditworthy consumers in America who are a number of rungs higher on the economic ladder than the working poor in third-world countries. What was missing was something in the middle, offering a modest return for microloans for the working poor. Enter MicroPlace, which does exactly that. I do not know a lot about it yet, but I just got an email from PayPal alerting me to its existence. PayPal is part of eBay and MicroPlace is part of PayPal. So, it is not some fly-by-night operation. I will be checking into them over the next few weeks.

From their web site:

MicroPlace Mission

MicroPlace's mission is to help alleviate global poverty by enabling everyday people to make investments in the world's working poor.

Our idea is simple.

Microfinance institutions around the world have discovered an effective way to help the world's working poor lift themselves out of poverty. These organizations need capital to expand and reach more of the working poor. At the same time, millions of everyday people here in the United States are looking for ways to make investments that yield a financial return while making a positive impact on the world. MicroPlace simply connects investors with microfinance institutions looking for funds.

The result: more microfinance in the world, satisfied investors, and above all, fewer people living in poverty.

Also, this is another GREAT way to thumb your nose at all of those big Wall Street banks with their giga-billion bailouts. You don't need their 1% interest while they use your money to make speculative bets that churn the stock market and push commodities prices higher. Put the same money in MicroPlace, get a higher rate of return, and actually do some good in the world! At least that's the theory. Stay tuned for details.

-- Jack Krupansky

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