One thousand [Microsoft] PCs were put up for sale in Brazil this week for $600, of which consumers pay $200 to $250 while the local branch of HSBC Holdings Plc covers the balance. Rather than pay monthly installments, users buy cards that activate their computers until the balance, plus interest, is paid off. Meanwhile, the International Finance Corp. covers the commercial bank's risk from users' variable payments. "What you're buying here is time. Time really is money here," said Xavier Jordan, financial specialist at the World Bank's IFC…
The IFC takes on the risk from variable cash flow and would be compensated accordingly in months of excess returns. While the World Bank lender fine tunes the financial risk mechanism, Microsoft is already introducing the pay-as-you-go PCs in other emerging markets like China, India, Mexico and Russia.
Quite a different approach then Negroponte’s. Here is the story. How have I not heard about this? (Tnx to PG for the pointer)
Update: The press release, story and video from Microsoft. And the FlexGo website.
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