MicroPlace Advertising 6% Returns Heavily
It’s hard to read TechCrunch anymore without seeing MicroPlace ads claiming you can earn up to 6% on your money. The microlending outfit backed by eBay launched 18 months ago as the first online microfinance platform that provided a return to investors, and has gradually brought on higher and higher-yielding partners over time. Initial returns were in the 1-3% range, then the highest investments crept up to 5% returns. Now there is a partner offering 6% returns. Kiva, the first microfinance platform available to consumers, does not pay interest to lenders.
MicroPlace breaks down the investments available on their site into three return buckets:
- <1% return – 1 investment (Habitat for Humanity)
- 1-3% return – 77 investments
- 4-6% return – 3 investments
So with only 3 investments in the 4-6% range, MicroPlace’s investments are still heavily weighted towards a 1-3% return.
In fact, if you’re looking for a 6% return, there is only one investment. Your only option is a 45 month investment to “extremely poor” borrowers in Nicaragua. Which is not necesarily bad, except that you might expect a few other options. Not to mention that the black woman featured in the advertisement suggests a different continent altogether.
That said, a 6% return is nothing to sneeze at, especially in this economic condition, and it is exciting to see microfinance start to offer real returns to investors. Hopefully MicroPlace can continue to attract more MFIs that will make that promise of 4-6% returns more widespread.
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