The economy may be rocking but there is a place where the word ‘loan' is still a positive force. Many articles have been written on the subject of microfinance or charitable investment but it is still a widely unknown concept. Microfinance companies and charities offer small loans to poor people, who are often in developing countries who need a little financial help to be able to set up their own businesses.

Most microfinance organisations aim to create systems for poor people to have access to loans, savings, insurance and fund transfers. Traditional banks don't provide services to people who have very little money, so a solution has risen over the past five years to address the issue. It can also be hard for people in developing countries to keep their money safe so setting up small bank-like businesses has become essential to making sure the money they make remains secure.

Microplace is one such organisation, set up by the ebay group, they accept money from the public which they then turn into loans for people in other countries who need a small amount of money to start their businesses up. The borrowers pay back the money when they can, along with a tiny bit of interest which helps to sustain the organisation and gets passed back to investors with their investment as the loan is paid back. The Microplace website says that borrowers are usually the working poor who are self employed as traders, farmers or craftspeople. The majority of them are women. They earn just enough to survive and use small loans to start or expand businesses.

Investing money in small businesses abroad by using websites like microplace is a positive way to make investments and also improve another person's standard of living. A slightly different but equally popular website which deals in microfinance is Kiva.org . Kiva are similar to Microplace in that they too provide loans to poor people in other countries who want to work themselves out of poverty, but Kiva is different because it is an entirely non-profit organisation which has both its advantages and disadvantages.

Kiva looks a little more like a social networking site than Microplace, it has information on a featured lender and a featured entrepreneur on the front page. This suits Kiva because at Microplace your money goes into a fund before being lent to people, but with Kiva your money goes directly to a specific entrepreneur.

Investors get their money back from Kiva over time as it is repaid but they don't get any interest on what they've invested, as the full amount of interest which Kiva charges its entrepreneurs goes into the non-profit company's upkeep.

Nextbillion.net described the differences between the companies well: "Kiva is filling an unmet need in terms of providing a direct, peer-to-peer portal on which lenders and borrowers can connect. MicroPlace, meanwhile, is more businesslike - it offers a portal where profit-conscious investors can get involved in microfinance without totally compromising on rate of return."

Kiva's motto is ‘loans that change lives,' and that is a fair description of what happens articles on the website are keen to point out that microfinance alone can't end poverty but it can and does make a difference.

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