Just got an e-mail from MicroPlace that they are running a gift certificate promotion where if you buy a $20 GC, you get another $20 GC free. The gift recipient can then lend out the money to a poor entrepreneur and receive interest + $20 back later. Since the person actually gets the money back (or at least most of it assuming some defaults), and thus isn’t the same as a “$XX has been donated in your name” gift, I think it’s a cool twist on gift cards.
Give a Gift that Keeps on Giving
Give a unique and special gift this holiday season. It is a gift of connection, a gift of hope, and a gift that believes that poor people can use their ingenuity and hard work to break out of the cycle of poverty.Your gift can help fund loans to poor people who could start a business, save, and work their way out of poverty. And when you purchase a gift certificate of $20 or more on MicroPlace, we’ll give you a free gift certificate of $20 to send to someone else on your shopping list!
To learn more about Microplace check out these posts, including my last microlending update.
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A great incentive to try this out. Pick out two investments you want and gift both $20 gifts to yourself.
Am I correct that you cannot choose exactly who gets your investment? You invest in an organization that in turn makes this loans?
@me – Yes are you correct, this is not person-to-person loans like Kiva. Think of it as a microlending mutual fund, but usually to a targeted group like poor women in Ecuador.
what credit card did you use through paypal? i don’t want to get stuck with cash advance fees.
Jonathan, since you mentioned defaults, I wanted to bring this to your attention. While not all of the people who receive loans pay them back, to date, all of the institutions MicroPlace works with have paid back their investors.
See https://www.microplace.com/learn_more/howitworks, click “Is My Money at Risk?”
“All investments carry some risk.
Historically, 97% of poor people have actually paid back their loans through good and bad economic cycles. This means that the institutions that lend to them can generally pay you back too. And, MicroPlace thoroughly vets these institutions to make sure they meet certain business and regulatory requirements. To date, none of our institutions have ever defaulted on their payments to investors.”
Also, just saw this NY Times article on Kiva and wanted to share. It turns out Kiva is not actually person-to-person lending.
http://www.nytimes.com/2009/11/09/business/global/09kiva.html
Excerpt follows:
Thus, the direct person-to-person connection Kiva offered was in fact an illusion. Kiva’s lenders were actually backstopping microfinance institutions, and since Kiva and other online giving and lending models pride themselves on their transparency, Mr. Roodman and others suggested it might better explain what its lenders’ money — about $100 million over four years — was really doing.
“The person-to-person donor-to-borrower connections created by Kiva are partly fictional,” he wrote. “I suspect that most Kiva users do not realize this.”