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MicroPlace www.microplace.com
GSG Rank:
1 of 7
Micro-Credit
GSG Rating:
User Rating:
Headquarters:
2145 Hamilton Avenue, San Jose, CA, 95125, USA
Year Founded:
2006
Founder:
Tracey Pettengill Turner
Stock Code:
EBAY
What We Say:
The MicroPlace mission is to help alleviate global poverty by enabling everyday people to make investments in the world’s working poor.
This is a pretty cool concept. You have only so much money to GIVE to the poor. But what if you could invest in the poor, and get a decent return on your investment? Loaning 50 bucks to a basket weaver in Cambodia may sound like a terrible investment, but micro finance has been shown to be very low risk for the investor. i.e. Most of the poor loan recipients pay back their loans plus interest. The secret of course is that the recipients aren't being loan sharked; instead they get reasonable sums with low enough interest that it makes sense to repay it, since then they can get another -- perhaps bigger -- loan.
The site allows you to invest at whatever level you're comfortable. Just $100 if you like. And you can choose your investments...by risk level, rate of risk/return, region, country, length of loan, etc.
For example, you may choose to loan $500 at 2% to a fish farmer in the Congo. And when you get your money back with interest, you may choose to withdraw your cash, or re-invest in another project or batch of projects.
This is a pretty cool concept. You have only so much money to GIVE to the poor. But what if you could invest in the poor, and get a decent return on your investment? Loaning 50 bucks to a basket weaver in Cambodia may sound like a terrible investment, but micro finance has been shown to be very low risk for the investor. i.e. Most of the poor loan recipients pay back their loans plus interest. The secret of course is that the recipients aren't being loan sharked; instead they get reasonable sums with low enough interest that it makes sense to repay it, since then they can get another -- perhaps bigger -- loan.
The site allows you to invest at whatever level you're comfortable. Just $100 if you like. And you can choose your investments...by risk level, rate of risk/return, region, country, length of loan, etc.
For example, you may choose to loan $500 at 2% to a fish farmer in the Congo. And when you get your money back with interest, you may choose to withdraw your cash, or re-invest in another project or batch of projects.
What Users Say:
Reviewed on March 17 2010 by Worth knowing answers
From their website: Microplace isn't registered in the states listed (as a lender). Non-US residents can't as of today. #2 and #4: don't know. Allowing even a portion of the US donation and/or languishing CD money to flow into the hands of the ...
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Parent Company
eBay www.ebay.com
Pros
Claims to be the only micro finance entity that allows everyday investors -- you and me, potentially -- to invest in micro finance. All other micro finance players only take investments from banks and other financial institutions.
Cons
Very few opportunities right now, and most have an unexplained message like this: "This investment is currently not available to residents of AL, AR, AZ, CA, CO, DE, GA, HI, IL, IN, KY, LA, MI, MO, NC, ND, NE, NM, NV, OK, OR, PA, PR, UT, VT." Which kind of dampens my enthusiasm. Hard to know if eBay purchased MicroPlace to simply make money -- by soliciting mini-investments from it's 100 million eBay auction users -- or if there's some genuine underlying philanthropy at work.
What's Unclear?
1. Why are residents of a dozen or more states forbidden from investing?
2. How does MicroPlace even know or police what state you're a resident of?
3. What about non-USA residents? Can they invest?
4. Does the loan recipient get screwed on the exchange rate risk? For example, if I loan $100 to a farmer in Zimbabwe, and he gets his loan in Zim dollars, what happens when his local currency depreciates against the US dollar?
2. How does MicroPlace even know or police what state you're a resident of?
3. What about non-USA residents? Can they invest?
4. Does the loan recipient get screwed on the exchange rate risk? For example, if I loan $100 to a farmer in Zimbabwe, and he gets his loan in Zim dollars, what happens when his local currency depreciates against the US dollar?