Microfinance 2.0 Conference Day 2: Spotlight on MicroPlace

Written by on June 17, 2009 in Featured, Microfinance - 5 Comments

microplace

Today we kicked off our morning with an energetic and informative conversation with Tracey Turner, founder of MicroPlace. We’d like to take moment and briefly focus the spotlight on the awesome work they’re doing.

If you’re not familiar with MicroPlace, you can think of it as having a similar model to Kiva with one distinct operational difference: they offer an interest on all loans invested. Unlike Kiva which allows you to make micro loans to poor entrepreneurs around the world with zero interest, MicroPlace allows you to the same thing with interest rates ranging from 0.5%-6%.

tracey-turner

Tracey and her team operates with a philosophy that a financial return on investment enables more individuals to participate in doing good because of the financial incentive and additionally it creates a sense of accountability and empowerment for borrowers who must repay their loans with a minimal interest charge. An interesting statistic Tracey shared which entirely supports the notion of microplace offering more of a business transaction instead of a charitable transaction (such as Kiva) is that the median US household has $1000 to donate but $50,000 to invest. Quite a dramatic and notable difference and of course a compelling reason for seeking social investment instead of charitable donations.

Another reason we think MicroPlace is pretty great, from the standpoint of sustainability; to ensure we lend a hand to those at the bottom of the pyramid, a return on investment is evidently more sustainable than a donation. Via investment, we invest, do good, earn a return and can repeat that entire process (with a high level of accountability for the borrower). With a donation, we give, do good and may or may not have the ability to give again in the future and the level of accountability for the borrower is negligible.

We wish MicroPlace many successes in the future as they move towards becoming a proven sustainable model.

MicroPlace

MicroPlace

MicroPlace is an online platform which connects lenders in the United States to entrepreneurs in developing countries.  Their goal is to alleviate poverty by offering interest for lenders thereby gaining mainstream appeal.

  • Website: www.microplace.com
  • Founder(s):Tracey Pettengill Turner
  • Founded: 2005
  • Location:San Francisco, US

Erik

Erik is a perpetually curious social innovator. As a serial entrepreneur, Erik knows a thing or two about change. As a co-founder of SocialEarth, Erik hopes to channel his passion for social advocacy into an innovative venue of social awareness for others.

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  • http://socialearth.org Justine

    Interesting statistics, I was unaware of the investment potential in this country. What wonderfully sustainable way to help!

  • http://www.davemacdonald.ca Dave Macdonald

    This is a great way to solicit capital for loans, but I’m concerned with the statement “a return on investment is evidently more sustainable than a donation” in that it implies we can have continuous growth and still be sustainable. If the earth is a finite system, how can this be?

  • http://socialearth.org Naiomi

    @ justine- it really is an awesome way to help:)

    @dave- thanks for the comment! technically speaking you’re absolutely right, growth is not infinite nor will it ever be but within the context of the mention, we simply meant an investment will more likely be repeated than a donation! hope this helps!

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