Tuesday, January 14, 2014

MicroPlace Closing

MicroPlace.com Statement
I was disappointed to see today when I logged into my MicroPlace account that as of today (January 14, 2014), they’re no longer accepting new investments. Fortunately, all current investments are continuing, so I don’t lose the $800 I have in my account. Also, the site isn’t going away until all investments through them have matured, so accounts and tax information stay current for at least the next few years. Still, it’s disappointing to see that the MicroPlace wasn’t able to catch on.

Despite MicroPlace’s closing, I continue to think micro-financing has a great deal of potential for economic development and fighting poverty. Other micro-financing efforts, like the much better known Kiva, continue to do well, but their model is different.

Most other organizations are non-profit, and they are really just a different way to make a donation. The advantage of MicroPlace was that it was set up to give actual financial returns to investors. Personally, I used MicroPlace because I wanted to do something positive with my money, but as a seminary student with lots of loans, it’s a lot easier to justify using my money for something that give me a return.

Also, MicroPlace had the unique advantage (or at least what should have been a unique advantage!) of being backed by eBay and PayPal. That both gave them credibility in attracting investments from people like me and provided a way for investors/customers to get money in and out without needing to worry about transaction fees.

At least for me, micro-finance investing was possible because I got a return on my money, but the return was so small (in the neighborhood of 1 or 2%) that the usual PayPal transaction fees would have eaten up the return. I hope someone else is able to come up with a similar system!

Visit MicroPlace’s MicroPlace FAQ page for more information on why exactly they’re closing. 


Anonymous said...

Daniel, I fell the same way. I been searching for weeks now on the web to see if another company will come up with the same program.

Jarrett said...

Just received an email about a interest payment today and it reminded me about MicroPlace. Have you heard about any alternative sites?

Daniel Flucke said...

I recently heard about Vested.org, which could be an alternative, although their investment options appeared much more limited. Are you aware of other options?