And now for something completely different... I'm talking about the launch today of MicroPlace, a new website which was written in Rails. I don't usually call out such sites, but this time is different for a few reasons. Firstly, I helped build the site, so I have a personal involvement in it. Secondly, it's a good cause that's worth talking about. And lastly, the circumstances of its creation should be of interest to the Rails community.
But as prologue, a brief word about how I ended up working on this project. Last I said anything about it I was working for a startup company. Well, startups are rarely exactly what you expect, and things there didn't work out like I wanted. So since the summer I've been freelancing as a consultant, and generally having a good time of it. MicroPlace was also working in stealth mode prior to launch, so it was good that I didn't say much about where I was working until now. And that's all I want to say on that subject.
Freelancing is nice in that I get to work on a variety of things, and I have a lot of choice about what I work on. I was really interested in working on MicroPlace for a few reasons. The biggest reason for me was what MicroPlace is about. It's a microfinance investing site that allows anyone (in the US) to loan small amounts of money to entrepreneurs in developing nations. This has been shown to be very effective in reducing poverty. Last year, Muhammad Yunus was awarded the Nobel Peace Prize for his work as founder of the Grameen Bank in Bangladesh. I'm proud to have been involved in a project that can potentially affect the lives of millions of people in the world's poorest countries.
The other exciting thing about MicroPlace is that its parent company is eBay. I definitely found it appealing to be working on the first Ruby on Rails project at a huge and prestigious all-Java shop like eBay. The project was staffed mainly by eBay employees, but they also brought in a couple of consultants with experience with Rails to help them out with the learning curve, which was how I got involved. From what I could see, things went very smoothly. I'll probably have more to say about the development project itself sometime soon, after I find out what it's cool for me to talk about.
As far as I am aware, MicroPlace is the first SEC-registered online brokerage implemented in Ruby on Rails. We had to go through an extensive security audit, and there were a lot of regulatory requirements for us to meet. Luckily for us, eBay has a lot of experience with building financial systems and is used to dealing with those kinds of requirements. But the bottom line is that we didn't have any significant problems with either Ruby or Rails in passing those hurdles.
Some things I like about the MicroPlace model:
- They actually pay a return on your investment. It's a small return, a few percent, but it'll beat the rate in a typical savings account.
- When you fund your investment through PayPal, PayPal waives the transaction fee, so 100% of your money goes into the loan. They can do that since they are all one, big, happy eBay family.
- You don't invest in a particular person somewhere. You choose a country, then a particular fund in that country. And that fund will make loans to individuals, so it's sort of like you're investing in a mutual fund of microloans.
- Any profits made by MicroPlace will be donated to non-profits, including the eBay Foundation.
I especially like the MicroPlace funding model because it's less of a "beauty pageant" of borrowers, and more about having an impact on a country or region you may care about. I think the local banks probably are able to evaluate borrowers and their needs in person better than I could over a website. You do get to see some real, representative borrowers for each investment fund, but for each one you see there will be many others served by that fund as well. Not everyone may like that model, but for those that don't there are alternatives.
The folks on the MicroPlace team are very committed to their cause. Most of the team have already traveled to developing nations to learn about microlending and poverty programs directly. eBay is also taking this on from a desire to be a good global citizen. It's great to see a big corporation use its money and capabilities to improve people's lives, rather than just to make more money. Kudos to eBay, you guys rock.
So congratulations to the MicroPlace team on their launch! And congratulations to eBay on being the newest corporate member of the Rails community. Way to go!
More about MicroPlace and microfinance