MICROCAPITAL STORY: MicroPlace Offers Online Microfinance Investment in Nicaraguan Credit Alternatives Fund issued by Working Capital for Community Needs with Interest Rates up to 6 percent

MicroPlace, a microfinance website, eBay Inc. company, and SEC registered broker/dealer, has launched a microfinance product available to retail investors with up to a six percent return, according to its website and a report on the Corporate Social Responsibility Newswire (CSR). The opportunity comes just as Americans are considering what to do with their tax refunds. According to a poll on taxsoftware.com, 58 percent of Americans planned to either save or invest their refunds and 27 percent planned to donate a portion to charity. The investment offering targets loans to the poor in Nicaragua and is part of the unsecured, USD 20 million Nicaraguan Credit Alternatives (NICA) Fund offering, issued by Working Capital for Community Needs (WCCN). Interest rates range between zero and six percent, terms vary by Note. The Notes can be purchased directly from WCCN (traditional modality, minimum investment size USD 1000) or online through the MicroPlace website (online modality, minimum investment size USD 20). Traditional Notes are not senior to Online Notes. The Notes are not registered with the Securities and Exchange Commission in reliance upon the exemption in Section 3(a)(4) for charitable organizations. To read a prospectus on the offering, click here. For more information contact Annie Lescroart at MicroPlace.com, (anlescroart@ebay.com) (408)-376-7458.

NICA Fund Notes are non-transferrable (there currently is no secondary market for the notes). The Notes are recourse loans against WCCN however language in the notes waives all recourse against WCCN beyond those sums that WCCN can collect from its loans to its partner agencies. Other risks factors include country risk, absence of regulatory oversight and custody risk. For more information, click here. The NICA Fund is supported by about 380 small investors. About 65 percent of these investors are individuals from over 40 states in the US and Canada. Churches, local activist organizations, small foundations and institutional investors make up the remaining 35 percent of investors. The median investment is USD 5,000. The online investment is currently not available to residents of these US states: AL, AR, AZ, CO, DE, GA, IN, KY, LA, MI, ND, NV, OK, PA, PR, SC, TN, WI. MicroPlace materials do not mention investment parameters for non-US residents.

According to the report, the NICA Fund is currently lending over USD 8 million to 15 Nicaraguan microfinance partner agencies that specialize in providing financial services to enterprises owned by low-income Nicaraguans. “With MicroPlace, we hope to reach more investors that want to make a positive impact on poverty,” said Carlos Arenas, executive director of WCCN. “WCCN has been working in the microfinance industry for over 17 years. This year alone, our microfinance partners are helping more than 250,000 Nicaraguan borrowers become successful entrepreneurs and small-scale farmers.”

The 6 percent investment offering comes on the heels of two additional microfinance investment opportunities: a USD 500,000 5 percent interest bearing note offered by MicroCredit Enterprises that launched in March and sold out in less than two months; and an investment allowing investors to get their money back anytime offered by Oikocredit that is still available on MicroPlace, to view a copy of the prospectus click here.

According to the MIX Market, the microfinance information clearinghouse, MicroCredit Enterprises is a 501(c)3 organization established in 2005. As of September 30, 2008 MicroCredit Enterprises managed USD 20 million, of which 95 percent was allocated to microfinance investments. Oikocredit is a Dutch company established in 1975. As of December 31, 2007 Oikocredit managed USD 615 million, 49.6 percent of which was allocated to microfinance investments. The MIX Market does not report on MicroPlace. MicroPlace is an SEC registered broker/dealer, a member of Financial Industry Regulatory Authority (FINRA), and the Securities Investor Protection Corporation (SIPC).

By Laura Anderson, Research Associate

Additional Resources:

The Corporate Social Responsibility Newswire: MicroPlace Announces First Microfinance Offering 6 Percent Return for Everyday Investors

MicroPlace: Home

The Nicaraguan Credit Alternative Fund: February 4, 2009 Prospectus

Oikocredit Global Community Notes: January 30, 2009 Prospectus

Taxsoftware.com: More Americans Plan to Donate Portion of Tax Refund to Charity

MIX Market: Home, MicroCredit Enterprises Profile

FINRA: Home

SIPC: Home