I’ve long been a fan of microfinance or microlending where a small loan can make a big difference. To date, I’ve made several small investments via both Microplace.com and Kiva.org. And, in addition to doing good, I’m doing well. Kiva doesn’t pay interest but it does make it easy to give gift certificates. Microplace, in the past, paid up to 3% interest but today announced a fund that’s paying 5%.

Have you checked bank and CD rates lately? 5% is great compared to the rates paid by most banks and money market funds.

The money is loaned to poor people — mostly women — in various parts of the world. The portfolio that now pays 5% goes through an organization called Micro Credit Enterprises which makes loans to the working poor in Armenia, Azerbaijan, Bolivia, Cambodia, Ecuador, Honduras, Indonesia, Mozambique and other countries. And a little bit of money can go a long way. Nelida Espinoza Flores, a 38 year old Peruvian, for example, borrowed $115, to buy jello and other snacks. According to Microplace, she spends about $5 a day on supplies which results in between $10 and $13 in sales. › Continue reading…