Ebay: The Place For Microfinance
October 30th, 2007
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A new company, supported by online giant Ebay, would allow small investors to provide microloans starting from as low as 50$.
The key to microlending, says Turner, is that it fosters self-reliance and, eventually, sustainable economic growth in a way that charity does not. What’s more, lenders stand to receive small financial benefits in the form of interest, which should encourage them to keep investing in other projects. The minimum investment for someone to get started on MicroPlace is $100, though subsequent investments can be as low as $50. Interest rates vary between 1% and 4%, depending on the amount and nature of the investment, says Turner. Investors receive a “You’ve Got Cash” message on the site when they see returns. “The intention is that you get your principal back with your rate of return,” Turner says. “The goal is to reach the everyday investor.[link]
It’s certainly is an interesting idea. Microfinance has acquitted it self well. This project might interest those who find charity counter-productive but still want to help the poor.
The website is still in the developmental phase and the opportunities to invest are still limited. In the entire Eurasia region, only three countries are covered. But if the idea takes off, it can become the next big idea in developmental economics.
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