I first learned about the concept of micro-lending in 1996, when I had the opportunity to meet Muhammad Yunus of the Grameen Bank. Professor Yunus founded the bank in 1983, to provide small loans to poor Bangladeshi women who wanted to start small businesses. To date, the bank has served over seven million women and, in 2006, Professor Yunus and the Grameen bank were the recipients of the Nobel Peace Prize.

The Grameen Bank was founded on some specific ideas. First, that access to credit is a human right. Second, that women and children who bear the brunt of worldwide poverty have less access to credit than men. And third, that self-employment for women is the road out of poverty for entire families.

Although things have probably been modified and improved, the original Grameen model was based on lending circles--small groups of women who borrowed at the same time. Each of these women had to pay back their entire loan before they had access to another. In addition, each of the women in a circle had to pay back their entire loan before any other member of the circle could borrow again. For women, this model worked to ensure a remarkably low default rate.

The Grameen Bank still lends primarily to women because in Bangladesh they have been traditionally underserved, and also because studies have shown that women are more likely to use their income to better the lives of themselves and their children. However, organizations in many countries are now following the Grameen Bank model for microlending and I'm happy to report that the model has been expanded in some places to include loans to men.

Because Grameen Bank is now fully funded by its borrowers and customers, the organization no longer accepts charitable donations. The good news is that you can still get in on the microlending phenomenon. Kiva is a Web-based organization that partners with microlenders worldwide to grant loans to existing and potential entrepreneurs. On the organization's Web site, you can sift through the stories of hundreds of prospective borrowers and make loans as little as $25.00. That's loans. You'll get your money back. And when you do, you can loan it to someone else. Or you can spend it on Starbucks. The point is, it's your money and you're choosing to invest it in human capital to improve the world.

Today, I made a loan to Gloriose in Byumba, Rwanda. Gloria is a 44-year-old mother of 6 who runs a clothing and shoe shop in the Byumba Market.

From Kiva: "She believes that once she gets this loan, her shop will become bigger because she is planning to buy men's clothes, which are more desired in the market. Furthermore, she says that this loan will increase her profit, which will enable her to feed and pay the school fees for her children."

I only gave what I could afford, which isn't much, but my loan was added to other loans that had already been made. Now, Gloriose only needs another $25 to meet her target.

I've made charitable donations before, but this time it feels really good to know exactly where my money is going. Gloriose gets it all. And someday soon, I'll be getting it back. If a friend asked for a small loan, I wouldn't think twice, because when I help somebody out, I know that the person, or somebody in his or her place, will be there to help me when I need it. But what happens if you live in a place where all your friends are as poor as you are? What happens if the traditional banks won't loan you money because it doesn't make sense from a profit standpoint for them to manage microloans?

That's the brilliance of microfinance. While traditional banks are now stuck in a credit freeze, we can keep making a dent in worldwide poverty. These small loans make a huge difference in the lives of the borrowers. Helping to ensure that one more family somewhere in this world is able to feed and educate its children lifts all of us.

So, I encourage you to go to kiva.org to make an investment in wealth creation that matters. If you do, please come back and share the story of your borrower. I'd love to hear it.

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Cross posted at Dagblog.com, where the estrogen level is on the rise. I think the Dag boys are a little alarmed.