eBay’s MicroPlace Readies for Launch
MicroPlace, a US-to-developing world P2P lending platform (somewhat like Kiva) is scheduled to launch some time this fall, possibly as early as September. MicroPlace will let Americans with as little as $100 make a low-interest loan to an entrepreneur in a developing nation through a microfinance institution. The big difference between MicroPlace and Kiva, which launched over two years ago and has facilitated over $10 million in loans to entrepreneurs in developing nations, is that loans will be securitized (and therefore potentially trade-able), and lenders will earn interest.
MicroPlace was started by Tracey Pettengill, who is also the co-founder of the Silicon Valley Microfinance Network and was previously CEO of 4charity, a company whose product is “Web-based software that automates the corporate philanthropy process”. Pettengill started MicroPlace back in 2005, and faced with tough regulatory challenges, convinced eBay to lend expertise and resources.
Several months later, in March of 2007, eBay’s CMO, Gary Briggs let slip that eBay had purchased MicroPlace and was lending resources to the fledgling business to get it off the ground.
Once the site launches, investors on MicroPlace will choose a microfinance institution (MFI) to lend through, designate the amount they wish to lend, and the loan will be securitized and return a modest interest rate to the investor. Interest should be in the 3% APY range.
We’ll be anxious to see how MicroPlace looks when it finally comes out, and how they differentiate themselves from frontrunner and media darling Kiva.