MicroPlace

MicroPlace is a for-profit online broker-dealer, wholly owned by eBay, that connects retail investors with MFIs. Investors purchase SEC-regulated debt securities from security issuers (currently Calvert and Oikocredit) on MicroPlace.com to finance specific MFIs. The cost of this MicroPlace financing to the MFIs is about 8% per annum. If an MFI defaults, security issuers bear the risk and utilize loan loss reserves and credit enhancements to protect investors. The investments provide a small rate of return (currently 1.25% - 3% per annum but soon up to 7%). The average maturity of the investments issued by Calvert and Oikocredit is currently 27 months. As of April 2008, MicroPlace offers 34 investments in MFIs in 22 countries.

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Contributor: Carmen Villegas Caballero
Published Date: April 25, 2008