photo_ind_ashwini.jpgAs you know, I’m a huge fan of the innovation occurring in the microfinance space. One of places where innovation is ocurring is at MicroPlace.com, eBay’s online marketplace for microfinance investments. The site is celebrating its one year anniversary this October and also recently passed the $1M mark.  I got the opportunity to ask Ashwini Narayanan, Director of Product Management, a few questions via e-mail that I wanted to share with a broader group.

Question: You recently hit the one year and $1M mark – what does this mean for MicroPlace?

Answer:  We’re quite thrilled with the success MicroPlace has had in its first year of business.  When MicroPlace launched, we received 100M impressions.  For a little site with a small team, that just blew us away.  But what was really magical was when people trusted MicroPlace enough to start opening up their wallets and investing on MicroPlace.So far, we estimate that we have enabled 26,000 loans to poor entrepreneurs who have been starved of capital.  We prefer to focus on the number of people impacted than the dollar amount invested as one dollar means a very different thing in Chittagong than in Cleveland.  MicroPlace has a global presence with microfinance investment possibilities in 29 countries, even the United States.   And while the loan sizes and dollar amounts differ in every country, the life-changing impact that a microfinance loan can have to a poor entrepreneur remains the same. 26,000 lives.  That’s an amazing impact.  We’re extremely proud.

Question: What’s next for MicroPlace?  Do you see room to grow?

Answer: We see tremendous potential.  Deutsche Bank recently did a really great study about microfinance (and if you are a complete microfinance geek, you can find it here).  They estimated that we need $250B to help all the billion people out there who could use a microfinance loan.  So far, the industry has raised $25B.So then the question becomes where to find this money.  There are basically three options.  The first is to go to government development agencies such as USAID who have historically invested in microfinance for the poverty alleviation impacts.  In 2005, the US government spent about $15B on ODA (Overseas Development Assistance), excluding Iraq and Afghanistan.  This is a lot of money, but still doesn’t get us to our $250B target.The second option is for a microfinance firm to go the charity route and find a donation.  In 2007, Americans gave $300B to charity.  That’s a lot of money too, but unless microfinance hogs it all and leave the dolphins and trees with nothing, we still can’t get to our $250B target.The last route is to go the socially responsible investment route.  In 2007, Americans invested $2.7T in socially responsible investments, or investments that made a difference in the world.  Finally, a lever large enough to be able to address the problem!  So this is our market opportunity that we have our eyes on.

Question: What keeps you motivated?

amoin.jpgAnswer: Recently, our development team programmed a little cash register “cha-ching” sound on one of our main servers in the eBay south campus office.  It goes off whenever someone makes an investment on MicroPlace.com.  Some days I will be working at my desk and deep in the middle of a long lawyer’s report about SEC security requirements and, I know you will find this hard to believe, but I start to get bored.  But then I hear the cash register sound and it makes me realize that all this hard work, all those late hours, all the trust that eBay put into us is actually worth it.  It still doesn’t make me excited to ready SEC documentation, but every time I hear the cash register sound, I know another loan has been enabled and another life has been impacted.We’re hope you’ll join us in working to alleviate global poverty.  For the billion people living on less than $1 per day, a loan as small as $30 can mean the difference between standing on a street corner begging for a handout and starting a small business that can provide a lifetime of income.  Take Amoin. She went to school in Cote d’Ivoire until she was 12 and her parents could no longer pay for her schooling. That’s when she went to work selling fruit and beans in the local market. Today, she is 29, with her own children, and a lot of experience trading in the market. Amoin took a $550 loan to be able to grow her own palm beans to sell in Adobo’s open market.  Her life’s goal is to give her two children the university education that she herself was denied. Her oldest daughter entered school this year, with all expenses covered by the income from Amoin’s business. Please join us today at MicroPlace to make an investment.

Thanks for your time Ashwini!