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
MicroPlace information section
Business Week: EBay: The Place for Microfinance
Business Wire: MicroPlace Launches Investment Website to Address Global Poverty
WorldChanging: Kiva vs. MicroPlace - What's the Difference?
Wired: EBay-owned MicroPlace Launches Microfinance Site
Here's a background piece on microlending from the SF Chronicle. Unfortunately MicroPlace hadn't launched when it was written, so the site isn't included in the write-ups.
Nice write-up Josh. And thanks for your big help with the site!
Ditto
Excellent writeup. The part about SEC auditing is particularly interesting as a Ruby developer. Also, it seems like MicroPlace is an excellent project that would be awesome to be part of. Congrats. It's great to know you're making a difference.
Any info on how to get other countries on the list?
ctran: I know the list of countries is going to keep growing over time, and we built the site to handle a large number of investements for many countries. I'm not sure of the process for setting up new investments, except that there is one, heh. You can always go to the site's Contact Us page and send them a question or suggestion.
i just finished reading mohammed yunus's book about microfinance, and this site looks like an excellent effort towards getting money to the lending organizations that need the capital. nice work.
just a comment about the map: kenya and tanzania are not where the map shows they are. kenya is shown as being in somalia, and tanzania has hijacked kenya!
makes me wonder: if I give money to these guys, where is it going to end up? ;-)
Kenya and Tanzania are back. Thanks for the heads up.
Well done - Looks like a very cool idea/site.
Excellent post, Josh. Thanks for the kind words and -- even more -- thanks for the great work on the project. To any potential clients, out there: I highly recommend Josh for any project your considering. The guy's a guru.
Sounds a lot like kiva.org
The site looks great. It must be great to get the chance to work on such a noble project. Do you have any idea if and when UK investors will be able to join in.
I have to say I am kind of jealous... because this was a project we wanted to start in early 2008, as soon as we finish our current project. there was already kiva, but we felt the user interface was badly designed and their model was a bit akward. their user interface was also english only etc.
I went through microplace this morning and all i can say is bravo. i said to myself "oh well, there goes my dream..." then I also saw the urls for routing and guessed it was a RoR website.
oh well. wishing you guys all the bests then...
heri: Sorry about that! But building the app in Rails was the easy part. Dealing with the SEC and the mountain of regulatory paperwork to be a brokerage, that was the hard part. Then there was all the work to set up relationships with the investment institutions and banks. That's a crazy amount of effort, and it pretty much takes a big company like eBay to have the resources to manage it. I'm just glad all I had to do was the programming.
The site looks really great - good job Josh!
Josh, nice work. I was in your TDD class last week. Thanks for sharing this. Very nicely executed RoR application for a very noble cause. This is another example which goes to show that we are all interconnected and dependent on each other, and further strengthens the sense that the power of the internet can be harnessed for the greater good.
As heri said earlier, "Bravo!"....
Oops, I just realized that you were probably not at the TDD studio last week, but instead an alumni of one of the Pragmatic Studio's other class offerings. No matter. Great job still! :-)
I worked on peertopatent.org which was funded by Omidyar network. It was built on Rails and was focused on getting the patents processed faster. I don't know if it is really a noble cause, since companies sometimes abuse patents.
I am wondering if you still used ActiveRecord for it.
Doodles: Yes, ActiveRecord worked fine for our needs. On MySQL even.
great idea! i'm extremely impressed that ebay allows bypasses all the transaction fees(like paypal) so we see the money going to the actual people who need it.
HELLO:
I don't speak english. We are Artesans Groups, Village Rabinal, Guatemala. We need informattion about the financial access.
I hope the informattion, Thank you very much. Mariano Xitumul.
Mariano: I apologize, but I'm not in a position to help with your request, since I was only a consultant on the project. I suggest you contact MicroPlace directly and they can help you out.