MicroPlace, a wholly-owned subsidiary of EBay, launched its new web site today with a flurry of press releases and coverage in both Reuters and BusinessWeek. From the press release:
Through MicroPlace’s secure platform, everyday people can purchase investments – for as little as $100 – from microfinance security issuers. MicroPlace also enables investors to direct the impact of their investment to a specific country and microfinance institution in the developing world. The microfinance institutions use the funds to make small loans to the working poor, who in turn use the loans to start or expand small businesses and lift themselves out of poverty.
lenders on MicroPlace invest in microfinance by purchasing securities. Funds generated by these sales are then invested in microfinance institutions around the world. MFIs, in turn, solicit clients, make loans and collect payments - they do their normal day-to-day business.
Once client payments are in, the institutional investors receive their loan (plus interest) who can then pay back their investors - people who purchased those original securities.
MicroPlace, as a broker/dealer, can pay interest to lenders - thanks to its ability to navigate the aforementioned regulatory maze.
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