Invest in Global Microfinance

Microfinance is the provision of small loans to the working poor in developing countries to help them start or expand small businesses that can improve their families’ living conditions. Borrowers use some of their profits to repay the loans. Ninety percent of this loan money is currently provided through public funding, but commercial investment is a growing trend. Right now, there are three ways for individuals to participate. You can invest directly in one of the fledgling microfinance funds, but almost all of them have a minimum investment of $50,000. You can invest online through Kiva.org. Here, you can loan as little as $25 directly to a borrower. The repayment rate is about 99.72 percent, but you do not earn interest. The newest option is to invest online through MicroPlace.com, an eBay company. Minimum investments are low. And with the support of its parent company, MicroPlace was able to jump the elaborate hoops required to become a licensed broker dealer through the Securities and Exchange Commission, so these investments do earn a return.

Go to the MicroPlace website, and choose a region and county to invest in. You can select from Southeast Asia, South Asia, Latin America, Eurasia and Africa. Countries will continue to be added as participation by both lenders and investors grows.

Read the summaries of the funds offered for investment in your chosen country. Or you can look at all of the offerings. The summaries include the fund’s mission and terms of investment--annual interest rate, maturity, last date to invest and name of the security issuer.

Click on pictures of individual borrowers, and read their stories. This will show you how your money will actually be put to work.

Click on the fund’s name for more information. There’s a lot here, including more about the mission, the fund issuer and recent borrowers. Scroll down to find facts such as the borrower repayment rate, total loan portfolio, number of active borrowers, average loan per borrower and percentage of women borrowers. There are links to lenders’ websites and financial reports, as well as to a PDF of the fund’s prospectus.

Choose an amount and click the ‘Invest’ button. The minimum initial investment is $100. Subsequent investments can be as low as $50. In developing nations, these amounts can make a difference to someone who’s trying to improve her life.