Banks in France and Bangladesh, notably banks that began as village banks are deeply linked to the well-being of their community. For U.S. banks, that mindset is a considerable change in concept. The concept started small. Small amounts of money were loaned to the rural poor trapped by an old system of moneylenders and politics. The concept has grown into a bankable system that allows the poor to help themselves.

Loaning to people without collateral is exactly the opposite approach that banks use when extending credit. Some bankers like Muhammad Yunus believe that credit should be considered a human right. He created his bank by turning banking upside down. Yunus likes to loan to women and to people with no access to loans. He considers attitude as the collateral of banking. He loans to people with self-respect and trust. He extends the same courtesy, working around the world to benefit people that need money most, while working to smash unfair banking laws. He is a Robin Hood of bankers.

Goldman Sachs has already taken steps to see if they can make a similar program profitable for themselves using the same models and ideas that some French bankers and microlending institutions are using. They plan to throw $100 million at an experiment to finance microlending outside of the United States. Is the plan being deployed as a method or a mindset for Goldman Sachs? Will Goldman involve themselves in a loan sharking business with 100% interest rates like Banco Compartamos?

You may be able to make money without the desire to help others, but lenders like Muhammad Yunus aren't just about making money. You may feel the same way. You desire to provide assistance to someone that needs help with a good idea to lift and elevate their life.

Finding a grass roots way to alleviate and eliminate poverty is the goal and heart of original microlenders. A large measure of philanthropy has been important in the past. Finding respectable organizations to work through is always an initial concern. Organizations like Kiva are using the power of the internet to facilitate one-to-one connections that used to be prohibitively expensive or impossible. You can offer whatever money you have available to make a difference in the life of someone else. MicroPlace is a new venture owned by Ebay that is registered with the Securities and Exchange Commission. On the surface, both organizations appear to be the same, but are quite different.

Lenders on MicroPlace invest in microfinance by purchasing securities. Funds generated by these sales are then invested in microfinance institutions around the world. The institutional investors receive their loan plus interest. The people who purchased the original securities are then paid back.

Kiva is a privately-owned non-profit organization. As a result, lenders on Kiva receive their loans back without interest. Lenders provide capital to microfinance institutions directly, who then lend directly to clients.

Microcredit Ratings International Limited has taken the time to evaluate microlending institutions. Other valuable sources of microlending information are the Virtual Library on Microcredit as well as USAID.

Regardless of what bankers believe, you can get in on the action by helping someone else out with your pocket change. You can become your own private banker for small loans and even make money doing so if you choose.

by: http://flickr.com/photos/farol/

Internet sta cambiando in maniera significativa sia la quantità che la qualità delle risorse per lo sviluppo umano. E lo sta facendo soprattutto attraverso quello che qui ho definito più volte come fundraising 2.0.

Niente di nuovo, credo, per i lettori di Fundraising Now!, ma è interessante rilevare l'approccio dell'ultima ricerca di Keystone, che conferma l'ineludibile tendenza attraverso lo studio comparato di 24 "mercati filantropici online".

I "marketplace" solidali, sono una delle grandi novità di questi anni: piattaforme in grado di incrociare la domanda di tempo, competenze e risorse economiche da parte di micro-imprenditori e organizzazioni non profit che ne hanno bisogno, con l'offerta da parte di aziende e cittadini che ne dispongono.

La ricerca prova ad analizzarli partendo da 4 domande chiave:

> i mercati sono solo un mezzo per offrire aiuti di breve periodo o possono costituire uno strumento per sostenere uno sviluppo sostenibile?

> esistono strumenti per misurare l'impatto degli investimenti effettuati tramite questi mercati filantropoci?

> le opportunità di investimento vengono presentate in modo da creare una larga base di donatori e una relazione di lungo periodo con i donatori?

> come possono influenzare positivamente il modo in cui i vari "costituenti" (investitori, intermediari e beneficiari) dialogano tra loro e apprendono reciprocamente?

La sfida, secondo Keystone, può essere vinta, purché:

> si mettano in condizione i donatori di diventare veri e propri investitori nel cambiamento sociale;

> si mettano in condizione i beneficiari di mostrare i risultati del loro lavoro attraverso report continuativi, credibili, accessibili e coinvolgenti;

> le organizzazioni arricchiscano il modo con cui interagiscono con i loro sostenitori attraverso gli strumenti partecipativi del web 2.0;

> si costruiscano delle vere e proprie comunità virtuali, in grado di costruire relazioni continuative tra persone in grado di cambiare il mondo attorno a idee e cause in cui possano credere;

> unire i donatori e i beneficiari dei progetti, attraverso gli strumenti del web 2.0

Una sfida per cui sembrano pronte soprattutto quelle piattaforme in grado di passare da un approccio neutrale a un approccio "engaged".

Ma cosa significa essere "engaged" per una piattaforma di filantropia online?

Secondo la ricerca di Keystone, significa:

• promuovere e raccomandare attivamente le organizzazioni e i progetti ospitati sulla loro piattaforma;
• effettuare un controllo accurato (la due diligence) sulla qualità del progetto e dell'organizzazione (e soprattutto sul suo impatto economico e sociale), auspicabilmente attraverso visite in loco;
• coinvolgere i beneficiari stessi e gli stakeholder nella valutazione ex ante dei progetti presentati;
• effettuare un controllo ex post attraverso audit interni ed esterni, partner local e controlli sul campo;
• presentare una rendicontazione accurata (ma anche coinvolgente). Punto su cui tra l'altro molti dei "mercati" esaminati risultano poveri di informazioni;
• mettere a disposizione dei vari stakeholder strumenti tipici del web 2.0, come widget, blog, forum per poter dialogare direttamente.

Ma quali sono gli ostacoli?

> innanzitutto individuare degli indicatori di performance più idonei: non sempre una rendicontazione formalmente corretta, l'adempimento di tutte le regole e il rispetto del budget presentato corrispondono infatti a un reale impatto sociale ed economico sul terreno.

Tanto per dare un'idea, questi sono alcuni degli indicatori usciti dalla survey:

● ‘The percentage of funds going to cause rather than overhead’
● ‘The effective and transparent use of your resources to attain in the best way
possible your organisation’s mission’
● ‘Having a positive impact. Changing and/or improving something that would
have been wasted’
● ‘Doing what you say you will, when you say you will. Being accountable.
Providing excellent ‘customer service’ and strong stewardship’
● ‘Doing the best you can with what you have’
● ‘Good treatment of donors and volunteers, effective programs, judicious
resource utilization’
● ‘Efficient use of resources for social impact, according with the mission of the
organisation’
● ‘Achieving measurable mission goals, and doing it cost-effectively. If your goal is
to help low income women get jobs, don't tell me how many you trained, tell
me how many got jobs that increased their incomes. If you can't then your job
is only half-done’

> non ogni tipo di progetto è comparabile a un altro;

> i problemi sociali sono spesso troppo complessi per essere ridotti a degli indicatori di performance;

> i risultati sono spesso raggiunti ormai terminato il processo di donazione/rendicontazione (si pensi agli effetti positivi dei progetti educativi o a molte attività economiche).

Del resto, non è detto che i donatori siano interessati realmente alle performance così come spesso vengono intese dai "project manager".

La ricerca stessa ricorda, infatti, che si dona soprattutto per soddisfare bisogni emozionali:

- innanzitutto perché fa sentire bene (attivando le stesse aree del sistema limbico centrale coinvolte nella produzione di dopamina che vengono attivate da sesso, soldi, droghe e cibo);

• per sedare un senso di colpa;
• per rispondere alla pressione dei pari;
• per motivi spirituali;
• per conformismo sociale;
• per dimostrara uno status;
• per altruismo.

Detto in altri termini, la credibilità dell'intemediario e la sua capacità di rendicontazione spesso e volentieri vengono considerati elementi secondari. Anzi: spesso si continua a donare alla stessa organizzazione pur sapendo che i propri soldi non saranno spesi in maniera efficaci o andranno sprecati.

Come afferma il presidente di DonorChoose:

‘Donors appreciate data as it gives a sense of visibility into the project, for example, the number of students being helped. But what our donors appreciate most is the personal feedback, the hand written letters from the children, the drawings and the glitter falling from the envelope as they open them.’

Insomma, se è vero che le informazioni dettagliate sono spesso rassicuranti, è vero che quasi nessuno le legge e che un donatore in genere preferisce report di poche pagine e ad alto impatto emotivo (con immagini, storie, testimonianze...).

C'è però un altro motivo che disincentiva le organizzazioni alla pubblicazione di indicatori di performance. La paura di perdere donatori. Il mercato del fundraising viene spesso visto come un gioco a somma zero. Si ritiene limitato il numero di donatori e si ritiene che una rendicontazione poco dettagliata o povera possa far perdere donatori a scapito di altre organizzazioni.

Questa paura spesso spinge all'omertà rispetto ai dati. Si dimentica però che il mercato delle donazioni online è ancora una nicchia (circa il 2, 3% del totale, anche se siti come Network for good hanno chiuso l'ultimo anno con 35 milioni di dollari di raccolta) e che c'è un ampio spazio per creare nuove relazioni con i donatori, per educarli e crescere insieme, per posizionarsi, anche attraverso un alto grado di "accountability" come leader e i first moover potrebbero giovarsene.

Le raccomandazioni finali della ricerca mi sembrano particolarmente rilevanti. I siti di filantropia online dovrebbero:

abituare i propri sostenitori a pensare come "investitori sociali" e non più come donatori

creare un sistema di raccolta e certificazione dei dati indipendente, che permetta una comparazione dei dati in diversi mercati e paesi

costruire un sistema di reporting unico e condiviso, che permetta la comparazione dei dati

Per finire, ecco i siti presi in considerazione.

1. Beautiful Foundation: http://www.beautifulfund.org
2. Bring Light http://www.bringlight.com
3. CanadaHelps: http://www.canadahelps.org
4. Changing the Present : http://www.changingthepresent.org
5. Charity Aid Foundation: http://www.cafonline.org
6. Conexion Colombia: http://www.conexioncolombia.com
7. DonorEdge http://www.donoredge.org
8. DonorsChoose: http://www.donorschoose.org
9. eBay Giving Works: http://givingworks.ebay.com
MissionFish: http://www.missionfish.org
10. Give2Asia: http://www.give2asia.org
11. GiveIndia: http://www.giveindia.org
12. GlobalGiving: http://www.globalgiving.com
13. Greater Good South Africa: http://www.myggsa.co.za
14. HelpArgentina: http://www.helpargentina.org
15. Just Give: http://www.justgive.org
16. Justgiving: http://www.justgiving.com
17. Kiva: http://www.kiva.org
18. Microplace: http://www.microplace.com***
19. Modest Needs: http://www.modestneeds.com
20. MyC4: http://www.myc4.com
21. Network for Good: http://www.networkforgood.org
22. Social Stock Exchange: http://www.bovespasocial.com.br
23. South African Social Investment Exchange: http://www.sasix.co.za
24. Wildlife Direct: http://www.wildlifedirect.org

E un elenco di siti di rating:

1. Charity Navigator: http://www.charitynavigator.org
2. Charity Watch: http://www.charitywatch.org
3. Great Nonprofits: http://greatnonprofits.org
4. GuideStar International: http://www.guidestarinternational.org
5. Intelligent Giving: http://www.intelligentgiving.com
6. Wise Giving Alliance: http://www.give.org

Per scaricare il report (100 pagine da leggere con attenzione e mandare a memoria), clicca qui (è un pdf)

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MicroPlace: Microfinance for the Masses
by Anne Moore Odell

US investors with as little as $100 can help fight global poverty at eBay owned MicroPlace.

SocialFunds.com -- Working for the Grameen Bank of Bangladesh in the 1990s, Tracey Pettengill Turner saw first hand how microfinance works to lift people out of poverty. What she also learned was how microfinance can be a profitable investment. In October 2007, Turner and eBay launch the first of its kind MicroPlace, a website where investors can chose to invest in microfinance institutions (MFIs) in specific areas of the world.

Microfinance is the offering of very small loans, typically ranging from $25 to $500, to people in developing markets to grow their businesses. MFIs usually operate in areas that don't have access to traditional banking services. The repayment rate for microfinance loans is extremely high.

When Muhammad Yunus and the Grameen Bank received the Nobel Peace Prize in 2006, investing in microfinance, which had been offered for decades, started to grow rapidly as more institutional and high-net worth individual investors diversified their portfolios with microfinance. However, until MicroPlace, it was difficult for individual investors, especially investors with hundreds not thousands of dollars, to become involved with microfinance.

MicroPlace raised nearly $500,000 in its first six weeks of operation. That dollar figure translates to more than 8,000 loans to microfinance borrowers around the world.

"If all these big guys are going to invest in microfinance, let's give the little guys a way to participate in microfinance," Turner told Socialfunds.com about the rationale behind MicroPlace. " What the microfinance industry needs to do is increase its scale. The industry now reaches hundreds of million people. There are a billion people who would benefit from microfinance."

MicroPlace is solely owned by eBay with Turner as director. MicroPlace is also partners with the Calvert Foundation and Oikocredit, who are both security issuers of the investments.

"Having eBay support us is a blessing," said Turner. "We can take advantage of their experience and connections. We've had hundreds of eBay employees reach out and volunteer to get us off the ground, from every aspect of the company, from HR and IT systems to web development."

MicroPlace is a registered broker-dealer, and is a for profit business. All profits, however, eBay promises to reinvest in its social programs like the eBay Foundation. MicroPlace's business model is actually comparable to online traders like E-trade and Ameritrade.

Investors can simply click on the area of the world they would like their microfinance investments to support. They are then presented with a list of MFIs operating in the area, their missions, and the terms of investments, including interest rates, maturity, and security issuer. Each MFI also features recent microfinance borrowers and their businesses.

Calvert Foundation was the first issuer on MicroPlace and recently announced $16 million in front-end investments to help defray start-up expenses and establish an essential risk-capital pool needed to protect retail investors. These investments in the Calvert Foundation to support its work with MicroPlace come from Omidyar Network, the Rockefeller Foundation, the DOEN Foundation, the John D. and Catherine T. MacArthur Foundation and OPIC. Each state has securities laws in place to protect investors, which the security issuers must fulfill. For example, the Calvert Foundation must have $1 on hand for every $6 invested.

Calvert Foundation is responsible for the interest and principal on any investments purchased through them on MicroPlace. However, MicroPlace will distribute interest payments, and is responsible for all direct communications with MicroPlace investors.

There is no cost for investors to put money into MicroPlace. All fees MicroPlace must charge are paid by the organizations that offer investments through the website.

"We had wanted to sell the Community Investment Note online for a long time, but didn't have the resources to develop the systems or clear the investments online," said Shari Berenbach, executive director, Calvert Foundation. "So, we were especially excited when eBay agreed to help launch MicroPlace. They were instrumental in helping to develop the systems and involving PayPal to clear transactions."

"Oikocredit took part in the launch of MicroPlace with two listings," said Karima Wardak, head of Oikocredit's corporate communication department. "Today we have twelve of our microfinance institutions listed on MicroPlace. We see MicroPlace as a very exciting opportunity for socially responsible individual investors. MicroPlace allows every day people to invest online in Oikocredit community notes available in the USA."

There is a great need for capital to move into MFIs. "Microfinance: An emerging investment opportunity," a study released December 2007 by Deutsche Bank, reported about only a tenth of the need in microfinance is currently being met. The study's author Raimat Dieckmann estimates that currently there is an outstanding loan volume of $25 billion. However, Dieckmann puts the microfinance funding gap at $250 billion. The study further anticipates a growth in microfinance to $20 billion by 2015 from the $4.4 billion that was invested in microfinance in 2006.

"Microfinance is growing at an extremely fast pace. ASA in India, one of our project partners, reported a growth from 27,699 clients in 2001 to 137,548 in 2006, " supported Wardak.

The MicroPlace also offers information on what microfinance is and how microfinancing can help fight global poverty. Harnessing the web savvy of eBay, the experience in securities of the Calvert Foundation and Oikocredit, the vision of social entrepreneur Turner and the others at MicroPlace, US investors have a serviceable tool to reach across the world, making a difference while making a favorable return.

"This is an exciting step because it has the potential to take the 'blended value' investing model to an even greater scale" Berenbach told Socialfunds.com. "This is a costly model to put in place but once there, it has incredible potential to be scalable and sustainable. Each player involved, therefore, is crucially important to making it work: the investor, Calvert Foundation as the security issuer, MicroPlace as the online marketplace, funders with the foresight to serve as the source of critical layers of investor protection...and so on."

Berenbach continued, "This is what makes it so exciting--having all of these disparate forces come together to really provide a long-term solution that can grow and grow, helping the working poor make better lives for themselves, all while providing a financial return to those who choose to invest in helping them."

Today I run a Social Business called MicroPlace, which is a wholly owned subsidiary of eBay. Much like Group Danone started a Social Business called Grameen Danone, eBay started MicroPlace. As was true with Danone, eBay employees by the hundreds have expressed their desire to create social change through their work. MicroPlace gives them that opportunity. eBay expects us run the business to achieve break-even, but has committed to reinvesting any profits back into MicroPlace and their other Social Businesses. This structure assures we are held to the standards of the free market while allowing us to focus on our social mission. So it was fun to read “Creating a World Without Poverty” because MicroPlace is a perfect fit with the definition of a Social Business.

The question for me is not if- but how- we move forward with making social businesses more commonplace. We still operate in a dichotomous world that is comfortable with black and white- donations that are purely socially motivated and investments that are purely profit maximizing. Anything in between remains weird and uncomfortable. How do we break out of this rigid world?

I would also love advice from others regarding Professor Yunus’s ideas on Social Business ownership. His proposal is that once a Social Business is profitable, we repay investors the amount that was invested and at that point, the repaid investors would continue to be “shareholders” (though without any financial stake). But how do we keep non-financially motivated shareholders motivated? My experience tells me that social motivation is not as strong as financial motivation. Shareholders without financial motivation tend to relax their standards or fade away completely. How do we keep their interest? Furthermore, do I really want an investor who has been repaid in full and has no financial claim to the business to continue to be an “owner” indefinitely? More cooks in the kitchen can sometimes be a bad thing. While having a committed socially motivated board of directors and advisors is wise, that is different from a repaid investor.

Tracey Turner is GM of MicroPlace, an eBay Company

http://www.internet-entrepreneurship.com/case-studies/kiva/microloan-mayhem-kiva-vs-microplace/

Microfinance is peer to peer lending. You lend $100 to a farmer in Eastern Europe to buy seed and fertilizer or a female store owner in South East Asia to buy goods for a marketplace store. Within a year, they pay you back. The qualified borrowers are very experienced business owners who need money to grow their business.

This photo is of a farmer in Bolivia who borrowed $600 to buy a milk cow. She sells the milk and has repaid $200 of her $600 loan.

eBay acquired MicroPlace.com in October. They pay a return on your investment. Kiva.org is a non-profit and does not yield interest.

Here's a great summary of the two companies: Kiva vs MicroPlace-whats the difference

I think I'll give MicroPlace.com a try in 2008.

There is a company called Prosper.com that offers peer to peer lending for people in the US. I took a quick peek and saw borrowers wanting to consolidate their consumer debt. No way. These are high risk loans to people who don't know how to manage money. Yuck!

I always think it's kind of weird/funny that they send out the magazines 2 weeks, sometimes closer to a MONTH before they're even supposed to come out. It's the 13th of Dec now, and it's like I'm reading about the future, except it was written, put together and published probably another month ago.This issue looks particularly unappetizing, it's got a cupcake-dressed Carrie Underwood on the cover (Why, I ask? "Because she wants men to lick off her frosting...?" Oh, boyfriend. Perhaps.), a mention of "happy weight" instead of "diet" and then the usual 365 makeup tips - "Look a little more gorgeous every day this year." This is one of the times that if I didn't get these things in the mail, I would never even pick them up.

Contest Ad

The ads go on for a while, but one seems worthy enough to take note of - a Tommy Hilfiger contest, where you attempt to "realize a dream," accomplish something you've been wanting to do your whole life, and if they like it enough, they'll"make your dream come true" AND "transform it into a riveting documentary film about you." You have to enter by January4th, but hey, you never know. You enter here. Good luck.

Pictures! Yay! - pgs 24 +25

There's a spread of photos from Glamour's Women of the Year Gala, referencing the 14 women they recognised in last month's issue for having done amazing things - I'll try and write about that issue at some point, it was a good one.

Microloans and Natalie Portman - pg 32

Next is a short bit about Natalie Portman and microloans - literally, $50-$100 that is given to typically a woman to start her own business in her very impoverished location, that she (or they) repay with the success of said business. This article spotlights $50 loans fed through the nonprofit Foundation for International Community Assistance (FINCA), and how Portman became FINCA's Ambassador of Hope (???) and talked her other celebrity friends into supporting this organization (e.g. Norah Jones contributing song tracks to an iTunes charity album). If you're interested in this specific organization, and microfinance in general, the Wikipedia article on it is excellent. There was a good Jane or Marie Claire a few months back that had all these models and their pet causes, and for all that it still came off as kind of consumerist, it was still really neat to see. I think it is important for celebrities to lend their names and influence to organizations that need it; if you have the power to do some good, I think you should. EBay is also starting a similar program, a friend of mine has been trying to work on the program for a while, so he was right on the ball when it went public just a few months ago. The site is MicroPlace, and it has an extra section for more resources, mostly books, but some websites and news articles. The only barrier I found for investing with MicroPlace is the $100 minimum first investment, but then again, I wouldn't drink Starbucks coffee all the time if I didn't work there, so my point of view is a little skewed.

More fun stuff and pictures later!

EDIT: I just found out about another microfinance site, Kiva.org, and this one looks like the minimum investment is $25, which you can give through your credit card. Check it out!

To what am I referring?  Nothing less than eBay's foray into microfinance with MicroPlace.  This is such a smart maneuver that it's surprising that it's been all but ignored in the media.  So, let's take a moment to analyze what makes this so smart.  First, microfinancing is one of the "hot" movements of today, on par with social networking.  As a feel-good story, microfinancing is second only to environmentalism and the fight against global warming in the promise of worldwide benefits that it can reap.  (If you're not convinced, just do a search on Muhammad Yunus or Grameen Bank.)  Think about it, the promise of microfinancing is the elimination of poverty in the developing world.  What could be more worthwhile?

Second, like the acquisition of StubHub, eBay waited until someone else proved the market.  In this instance, the groundbreakers were companies like Prosper, Kiva, Zopa, Lending Club, and others.  Yes, this reinforces the notion that eBay should no longer be thought of as an innovator, but it is the smart strategy for a mature company, which eBay is.

Third (and most important) this move is a logical extension of what eBay is.  EBay is a marketplace for connecting people to conduct transactions.  The foundation was in the purchase of used goods, for sure.  But, eBay can leverage its brand equity to expand into all kinds of transactions, with financial services being just the latest such type of peer-to-peer transactions.  eBay can become the "un-social network"  for transactions of all kinds.

Fourth and finally, the timing was impeccable.  Just a week or so after eBay launched MicroPlace, Fed Chairman Ben Bernanke praised microfinancing for its promise of economic development domestically and globally.  EBay seems to have caught the wave right at the perfect time.

Yes, eBay deserves a gold star for this latest move, or at least a little media coverage.  This could more than make up for overpaying for Skype.

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Facebook et ses flyers, beaucoup en disent du bien, Digital Inspiration lui n'est pas convaincu.

Vous cherchez des utilisateurs de Twitter proche de chez vous ? Utilisez donc TwitterWhere.

Ad Infuse n'est visiblement pas si bien que ça pour la publicité sur mobile.

Omniture rachète Visual Science. Great ! L'un des acteurs majeur de la mesure d'audience se lance dans le tracking temps réel. Le secteur de la mesure d'audience, tres proche du secteur des adserveurs est un secteur qui évolue énormément et qui a connu de grands changements ces dernières années.

Allez découvrir MicroPlace, la place d'investissements de Ebay company.

Whrrl, le reseau mobile pour agréger l'information.

--James

What?

Think of it as an aid foster child programme, but instead of a child you get a business, and instead of a photo and crayon scribbled letter, you get investment returns. Wired has a report:

The site is notable for two reasons: it's not only owned by eBay but it's also the first microfinance site to allow everyday folks to earn interest on their investment. Interestingly, eBay plans to donate all profits from MicroPlace to various non-profits, including (but not limited to) its own eBay Foundation.

The BBC also has a report that features MicroPlace's founder and general manager:

The investments last between two and four years and offer a small return.

"We really wanted to make it accessible for small everyday investors," said Tracey Pettengill Turner, the founder and general manager of MicroPlace.

"You can earn a return on your investment and help the world's working poor," she said.

Wired explains how it works:

At its launch, MicroPlace offers a limited array of securities, which allow individuals to invest in specific funds in specific countries at an interest rate of between 1 and 3%. Interest rates will vary and may be higher in the future, depending on the desires of each fund. Non-profit Kiva.org, by contrast, offers loans directly to the working poor, but doesn't offer interest. (Full disclosure: I have loaned money to several third-world entrepreneurs through Kiva.)

Along with quarterly interest payments, users will get updates on the individual entrepreneurs each fund is assisting. Turner herself recalls meeting a weaver in Bangladesh whose loan had financed a loom. Within a year, sales of her fabric had paid back the loan, built her a house, and sent her kids to school. "You hear stories like that and it just gets in your blood," says Turner.

The MicroPlace website has a great backgrounder section on how MicroFinance works, and is worth a read.  Worldchanging gives more background information on how MicroPlace works and links. 

You won't make billions, but you might make a difference.

The idea that small loans (which make interest and are repaid on a regular schedule) to individuals in impoverished countries that allow them to start small businesses has been a popular idea of the past few years. The University of Chicago economist and author Jeffrey Sachs wrote about it in his book The End of Poverty: Economic Possibilities for Our Timein 2005. It was a best seller and landed him on Time Magazine's 100 most influential people list. Muhammad Yunus also got critical acclaim for his micro lending company Grameen Bank and the Nobel Peace Prize in 2006.

On MicroPlace.com anyone can try to end poverty. You can choose a region of the world and a country and research some statistics about the population there. Then look through an read up on the programs available to invest in. There are risks involved in these investments, like in all investments. These MicroPlace invetsments specifically have these risks you should be aware of before investing:

1. They are not FDIC insured

2. The interest rate is lower than you would get in a bank or an average index fund rate over time. (I saw 2% listed)
3. You can't purchase these funds in Pennsylvania (it says so on the prospectus)
4. In the investment world the ones who loan the least get the smallest rewards, so $100.00 may do some good, but you won't get rich from it.

I think these programs have succeeded in their limited trials so far because of a few reasons. They are starting small in areas where this has never been available before. The newness of the opportunity seems huge and people are so excited about repaying because they have never had an opportunity for a loan before. Over time this will wear off if they are available to everyone everywhere and the payback rates will drop. (look at home loan defaults right now in the U.S.) They also don't have competition in a lot of the new businesses they start, so the success rate is high when no one else has a loan yet or a new business. I also think that Americans are very into the popularity of  charity and giving to help poverty right now, and are eager to donate and invest. (sometimes instead of investing in their own 401K plans, paying off credit card debt or donating to communities at home) Over time if rates of return don't stay high, and change doesn't happen the popularity will decline also. And lastly the idea that "free market capitalist economies can save the world" is very popular right now. As this expands and shows the pluses and minuses long term (America has a lot of poverty too you know, and no one seems interested in ending it here) may change our thinking. But for now it's Laissez Faire for everyone.

I applaud Ebay for their efforts, because they are trying to do good while doing business. But, over the long term I think these programs should stay small and primarily offline with more involvement in the venture by the investors to help supply the knowledge needed to make these new businesses succeed. (because money alone can't create a successful business) Commoditizing this process as an investment opportunity for all is probably going too big too soon and at an unmanageable level and will not return gains on investments or really help end poverty in the long term. (in my opinion)

Solutions for the Everyday Investor

Our next SVMN meeting will be on Monday, November 5th and will feature Tracey Pettengill Turner & Karl Wiley of MicroPlace, an eBay company, and Shari Berenbach, Executive Director of The Calvert Foundation, a leader in socially responsible investing.

In the past microfinance investing has typically been the domain of foundations & high net-worth individuals. With the launch of eBay's new MicroPlace.com, it's possible for anyone to invest wisely, earn a social return AND end poverty... even with just $100, you really can do it all. Come learn how to invest in microfinance institutions around the world from Kenya to Cambodia to Ecuador.

Tracey Pettengil Turner		Shari Berenbach		Karl Wiley

(more info below)

When: Monday, November 5th, 2007

6:00-6:30pm: Registration, Dinner & Networking
6:30-8:00pm: Speaker & Discussion
8:00-8:30pm: Networking & Wrapup

Where: auditorium on first floor below Omidyar Network offices

1991 Broadway
Redwood City, CA 94063
(directions here)

Cost:

in advance: $20 regular attendee | $10 students & non-profits (w/ ID)
at the door: $25 regular attendee | $15 students & non-profits (w/ ID)
(includes dinner + drinks; there is no "non-dinner" option... so eat up!)

Speaker Bios:

Tracey Pettengill Turner, Founder & General Manager, MicroPlace.com

Tracey is an experienced social entrepreneur committed to finding market-based solutions to global poverty. She is a seasoned business executive who has been involved in international development, social investing and philanthropy for more than 15 years. Prior to founding MicroPlace, Tracey was CFO of KickStart, an organization that designs and sells products focused on poverty alleviation. In 1998, she started her first company, 4charity, a web-based marketplace for charitable giving, and served as its CEO. Earlier in her career, Tracey held a variety of positions with socially responsible firms including the Grameen Bank in Bangladesh, Calvert Ventures and the World Bank. Tracey has received several leadership awards including 2000 Top 25 Women of the Web Award, San Francisco Business Times Leadership Award and a Working Woman Magazine Entrepreneurship Award.

Tracey holds a degree in engineering and economics from Dartmouth College and an MBA from Stanford Business School. Outside MicroPlace, Tracey plays left wing on her soccer team, trains for Ironman triathlons and snowshoes in Lake Tahoe with her husband.

Karl Wiley, Chief Operating Officer, MicroPlace.com

Karl is responsible for running all aspects of MicroPlace's business and operations. Karl brings over 12 years of experience in e-commerce and international development to the team. Before joining MicroPlace, Karl held senior positions in marketing and business development at eBay, most recently serving as Sr. Director of eBay's $5.7 billion technology and media categories. Prior to eBay, Karl was the Vice President of International Operations for online marketplace Alibris, a Business Development Manager at Lycos, and a Manager in the Emerging Markets consulting practice of Deloitte & Touche.

Karl holds a bachelor's degree from Duke University, a master's degree in international affairs from George Washington University, and an MBA from Harvard Business School. Outside of work, Karl enjoys spending time with his family, traveling the world and creating culinary masterpieces in his kitchen.

Shari Berenbach, The Calvert Foundation

Shari Berenbach joined Calvert Foundation as Executive Director in 1997. With over 20 years of experience ranging from microcredit to international business, Shari brings leadership and knowledge to the field of social investment. At Calvert Foundation, Shari has developed innovative financial instruments and partnerships critical to creating a level of transparency and discipline that engender consistent performance, investor confidence and broad market participation in the community investment marketplace.

Prior to Calvert, Shari led finance projects for the International Finance Corporation in Central America and the Caribbean, where she brought over $250 million to the banking, power, telecommunications, tourism and agribusiness. Shari began her professional career as an Officer of the National Cooperative Bank, where she was responsible for technical services to US production cooperatives. She later served as Program Director for Partnership for Productivity International. Shari has also held private-sector positions at Citibank, Salomon Brothers and a start-up international telecommunications company, Radio Movil Digital.

Shari has published several articles including a 1997 study on banking regulation for microfinance institutions worldwide and a 1991 paper on solidarity group lending methods. Shari serves on the boards of Community Wealth Ventures, MMA Community Development Investments and the Neighborhood Funders’ Group. She has previously served on the boards of the Social Investment Forum and the Association of Enterprise Opportunity.

Shari has an MBA in Finance from Columbia Business School and an MA in Latin American Studies from the University of California, Los Angeles. She received her undergraduate degree in Political Science from the University of California, Berkeley. Shari lives in Bethesda, MD with her husband Jim and daughter Moriah.