MicroPlace, a wholly-owned subsidiary of online marketplace company eBay and an affiliate of eBay's online payment division PayPal, is attracting attention from a growing number of investors seeking modest returns while helping alleviate global poverty.
Since its inception in 2007, MicroPlace's Web-based platform has had nearly 13,000 investors who've purchased investments offered by issuers that fund microfinance projects around the world. Lifetime investments (matured and outstanding) total $50.14 million.
Roughly half of those investments have been in investment notes with maturities of one year or longer, and the other half had been invested in a product with daily liquidity that's no longer available. The San Jose, Calif.-based company facilitates payments between investors and these issuers but plays a non-custodial role.
MicroPlace, whose business plan was created by founder Tracey Turner and sold to eBay in 2006, was established as a broker-dealer in order to pay investors a return.
Returns on the more than 30 state-registered securities it currently offers range from 0.5% to 4%, says Art Stevens, general manager of MicroPlace.
"It's a true investment-both sides receive a benefit," says Stevens, who recently spoke to FA at length about MicroPlace. "We're trying to balance the head and heart."
One factor that distinguishes the company from many other impact investing opportunities is its relatively low entry point. Some of its issuers require a minimum investment of just $20.
"We're trying to democratize impact investing to where a much broader population can put it in their pocket," says Stevens.
Also notable is that half of MicroPlace's investors are age 40 or younger-an unusual demographic for a brokerage firm. The eBay/PayPal backing, which provides MicroPlace with tremendous scale and resources, gives investors a lot of confidence, he says.
It's easy to find projects to invest in through MicroPlace's Web site. Investors can click on causes (rural areas, women, green and fair trade) and countries they'd like to assist, or on desired returns and repayment periods. The site also indicates the interest rates and maturity dates offered by specific investment vehicles and, in some cases, the number of people that can be helped in a community through a $1,000 investment.
MicroPlace doesn't charge investors a fee, but it does charge a fee to the issuers on its platform.