Small Loans Fuel Big DreamsMicroloans Help the World’s Poor Help Themselves

By Amanda Finch Broadfoot

New Web sites are popping up that allow Average Joes to act as bankers to Third World entrepreneurs. Through these sites, visitors can lend as little as $25 to help start a hair salon in Afghanistan or $50 to buy fabric for a seamstress in Samoa.

Known as “microloans,” these small contributions to entrepreneurs in developing countries predate the Internet. As early as 1971, Stefan Stojkovic, a former Bristol-Myers executive, quit his high-profile corporate job to establish Opportunity International, making loans to poor entrepreneurs who did not qualify for traditional credit. The company’s first loan financed a one-man spice and tea business for a Colombian named Carlos Moreno.

Many microcredit organizations, most notably Women’s World Banking, focus on women. Microloans from such organizations help raise the status of women in regions where opportunities outside of the home are minimal and start-up capital for small business is virtually nonexistent.

The Internet has opened up microlending to the public. is one of the most successful and easy-to-use sites, connecting lenders with borrowers worldwide as transparently and directly as possible. (In fact, at first glance, the site looks a bit like an online dating site, with photos of potential borrowers and happy lenders displayed alongside their profiles.) Who wouldn’t be moved by the story of Yuldosh Egamberdiev, a 59-year-old from Tajikistan who needs $500 to buy two cows and feed? Or Ulalia Lusia, a Samoan seamstress who needs $475 to buy fabric? Seven entrepreneurs in Mexico are trying to raise $371 each to open a grocery store in Ocosingo. makes it easy to select a business, make a contribution – as little as $25 – and check out, using any number of payment methods, including PayPal. Within the predetermined time period – usually about a year – you get your money back, and you can choose either to cash out or contribute that money to another business.

In this day and age, it is easy to become cynical about foreign aid – particularly who and what said funding ultimately benefits. Thankfully, organizations such as Kiva – which means “unity” in Swahili – show it is still possible to reach out and help someone.