MicroPlace

Help people help themselves out of poverty

Sunday 23 May 2010, by Albert Barque, Julie Dejean, Karim Qassoud, Sander Klemann

7 inspired

A) THE MAIN FACTS ABOUT THE ACTIVITIES OF THE COMPANY.

MicroPlace focuses on microfinance loans sent via the internet. Users can choose specific lending clients and businesses and loan them money over a designated period of time. Their mission is to help alleviate global poverty. The loans can only be made to people under the poverty line, enabling them to start a business and repay the loan while increasing their welfare. Basically MicroPlace brings socially responsible investors in contact with poor people who lack access to capital. The loan can be seen as an ?green? investment and is returned with interest. The organization thrives to make a profit and sees this as a way to achieve maximum efficiency. Lenders are asked an interest rate to make them responsible businessman. Furthermore the amount people in general invest is much higher in 2007, Americans gave $300 billion to charity but invested $2.7 trillion in socially responsible investments. By giving lenders a return on their loan they increased the potential investors.

B) THE ETHICAL CHALLENGES THIS COMPANY IS ADDRESSING:

Microplace is providing microcredit for poor people all over the world trying to help them to build their own business. By providing this kind of business, Microplace has to be able to study every opportunity in order to help those people but also at the same time to make the investors earn money.

So the main challenge they have to deal with is to set up a certain limit between an organization that only help poor people and a growing business that need to maximize the profits of its shareholders. Indeed, this company is owned by Ebay and we can wonder if the main goal of this organization is not only to make advertisement for Ebay.

But when we see the realisations in all over the world, it is obvious that the money that Microplace give to the people to set up their business is beneficial and help a lot of men and especially women to get off the poverty they were in.

C) WHAT MAKES YOU BELIEVE THIS COMPANY IS REALLY ETHICAL AND WHY YOU TRUST IT.

Nowadays everyone agrees that financial markets are strictly competitive and complex and investment business carry out activities that are difficult to understand -for an individual that has a standard knowledge in economics- because of the complexity of their operations.

However, in this specific case everyone can understand the investment process the company offers. As a consequence of that, an individual will trust and believe in it. Microplace have reached these statements due to its simplicity in their products and messages and their transparency.

First les us concentrate on their strategy focused in the importance of simplicity. They explain the idiosyncrasy of the firm, ?who are they? and ?how they work? in just one sentence. This way of communication is seen throughoutall their website. And it is seen in the products they offer too. Just a simple investment converted into a microcredit for poor people. In this case, the amounts of money are quite small for investors but really effective for the receivers. A simplicity that prevails throughout its policy of acting.

Now let us move on the other factor that explains why we can trust and believe in this company. In this case, transparency is achieved thanks to the control model designed in their webpage called ?MyMicroplace?. This simple mechanism allows the investors to control and be aware of what they are doing with his money. In this way the transparency of their actions are accomplished by 100%.

We are therefore drawn to the conclusion that this company behaves completely ethical, so we, and all the possible investor, will believe and trust this corporation.

D) THE POSSIBLE CHALLENGES FACING THE COMPANY IN THE FUTURE AND HOW YOU THINK THIS COMPANY MAY IMPROVE.

Microplace has many challenges to face in the future if it wants to improve. First, the company has to bring more investors into its groove to help the people in poverty around the world. Indeed, Microplace?s main challenge is expanding its investor base as well as raising the average Microplace investment which is currently $350. To carry out this plan, the company has launched a marketing strategy to bring more investors in the United States by raising awareness of microfinance.

Moreover, Microplace has to grow if it wants to reach its target. Indeed, currently the company is really small for the scale it aspires. But this challenge should not be a problem since Microplace is under the hood of EBay and so, it is well placed to face the challenge of growing.

Finally, we don?t have to forget that microfinance is a new industry which has a promising future and which can attract many of new competitors. Therefore Microplace has to look carefully at its potential competitors and try to differentiate itself in order to keep its place.

Bibliography

https://www.microplace.com/learn_more
http://www.nextbillion.net/blog/2007/10/24/kiva-vs-microplace-whats-the-difference
https://www.microplace.com/shared/prospectus/cci_prospectus_2009_final.pdf
http://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsId=20071024005417&newsLang=en
https://www.thepaypalblog.com/2010/04/the-truth-about-microplace/

Location: San Jose (United States of America, California)

Sector: micro finance

Official website: http://MicroPlace.com

Key figures:

Parent company: Bought by EBay in 2006
Employees: 15
Profit: unknown
Countries of operations: Africa, Eurasia, Latin America, Middle East, North America, Pacific, South Asia, Southeast Asia

Nbr. visits: 1244

Nbr. inspires: 6