Microcredit

I commented on this on Am's blog, but Nicholas Kristof wrote a column today about microfinance (Times Select only, which is free these days if you have a .edu email addy). Through the website www.kiva.org you can loan people in the developing world money to expand their money-making operations. The article talks about how loans were used by a baker to open a second bakery and benefit from economies of scale in ordering flour and oven fuel and by a TV repairman who is able to keep spare parts on hand due to the extra capital from his loan. Many of the loans are used to help women create and expand small businesses. A really high percentage of loans are repaid, which means that you can re-use your money again and again to help others. Commercial lenders in these countries often charge insane interest, so these kinds of loans are waaay better.

Kiva also allows you to give gift certificates, which people can use to make a loan, and then once the loan is re-paid they can re-loan the money or withdraw it. It's a great way to make the $25 you send to your nephew for his birthday mean a lot more -- it's still $25, but it helps someone eat before it becomes a video game.