MicroPlace Offers 6 Percent Return on Microfinance Investment

Monday, April 6, 2009

MicroPlace (www.microplace.com), a website that enables everyday people to invest in the world’s working poor, announced today the launch of the first microfinance investment opportunity that offers a 6 percent annual return for everyday investors.

This investment offering comes at a time when Americans are examining the best ways to use their tax refunds in a tough economy. According to a recent poll by Taxsoftware.com, 58 percent of Americans planned to either save or invest their refunds and 27 percent planned to donate a portion to charity.1

Through MicroPlace, investors have a unique opportunity to receive financial returns while simultaneously making a positive impact on poverty. With the launch of MicroPlace’s latest offering, an investment as small as $20 can help lift Nicaragua’s working poor out of poverty and yield a 6 percent annual return for the investor. The 6 percent investment comes on the heels of two additional noteworthy microfinance investment opportunities: a 5 percent security offered by MicroCredit Enterprises that launched in March and sold out in less than two months; and an investment allowing investors to get their money back anytime offered by Oikocredit that is still available on MicroPlace.

“During the same time last year, we saw a significant spike in the number of investments made through MicroPlace,” said Ashwini Narayanan, general manager of MicroPlace. “We are optimistic that taxpayers will act charitably again with our growing portfolio of investments, including the recent 6 percent security. We are thrilled at the opportunity that new investment products like this can create, in terms of additional value for our investors, and most importantly, the impact it can have on the lives of low-income entrepreneurs around the world.”

The 6 percent investment available on MicroPlace is offered by Working Capital for Community Needs (WCCN), a non-profit entity that funds small loans to low-income Latin American entrepreneurs and small-scale farmers. The WCCN’s loan fund project, the Nicaraguan Credit Alternatives Fund, is currently lending over $8 million to 15 Nicaraguan microfinance partner agencies that specialize in providing financial services to enterprises owned by low-income Nicaraguans. WCCN has a particularly low cost of capital thanks to the generosity of donors, long-time investors opting for lower returns, an active volunteer board, and local staff in the field. This, coupled with a 100 percent repayment history, allows them to offer a higher rate on this investment without compromising rates charged to borrowers.

“With MicroPlace, we hope to reach more investors that want to make a positive impact on poverty,” said Carlos Arenas, executive director of WCCN. “WCCN has been working in the microfinance industry for over 17 years. This year alone, our microfinance partners are helping more than 250,000 Nicaraguan borrowers become successful entrepreneurs and small-scale farmers.”

Microfinance has been recognized worldwide as a simple but powerful tool that enables the poor to pull themselves out of poverty. Most commonly, it involves making small loans to the working poor in developing countries. The loans are used to establish or expand small businesses that generate additional income for the family, enabling them to buy food, access healthcare, educate their children, put aside savings and lay the foundation for a better future.

Source: Press Release (link opens in a new window)