I ran across an article describing the differences between Kiva and its competitor MicroPlace. Both websites are microfinance lending sites to benefit entrepreneurs in poverty.
MicroPlace is right for you if you are:
- Interested in making some profit from your contribution
- Intrigued by the microcredit security and want to try it out
- An investor who wants to invest in something with a social impact
- Willing to provide the financial information necessary to start
Kiva is right for you if you are:
- Someone who just wants to get started right away!
- Willing to loan money to someone without being paid interest
Both models are working well for each company, but how will they work in the future. Kiva has an issue with being too popular and cannot get enough entrepreneurs that need money. MicroPlace provides interest to the investor, but entrepreneurs in need will probably want to have as little interest charged as possible.
I personally feel that once MicroPlace becomes more popular, donators will migrate from Kiva to MicroPlace in order to receive interest. Yet entrepreneurs in need will want to use Kiva in order to pay less money back. Only time will tell if one of these microfinance companies will perform better than the other.
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