There's a new trend in the massive world of international 
finance called "microcredit" or "microfinance." It's the process 
of giving relatively small loans that help impoverished people 
start or grow their own small businesses. 

Instead of giving a huge check to the government of a country, 
micro loans go directly to an individual, empowering them with 
the chance to use their moxie and business sense to build a 
better life. The loan is usually accompanied by guidance from 
a mentor and community development assistance. 

An example of a microcredit loan might be an Ecuadorian widow 
being given $250 to buy tools to make her own leather goods. 
She would get mentoring from the local community development 
officers, and establish her business. When her profits increased 
she would pay off the loan. 

Women, who have the hardest time establishing a livelihood for 
themselves, are frequently the recipients of these loans. Once 
they get the loan they also get to be connected with a wide 
variety of help from credit counselors and marketing experts. 
Often, borrowers will themselves, after getting established, 
help fellow loan recipients, and the cycle goes on. 

Microcredit started in rural Bangladesh, a pioneering approach 
developed by The Grameen Bank. In the language of the area 
"Grameen" means "rural" or "village." In this rural area the 
loans were used to buy goats, rabbits, to start small shops, etc. 
The approach was so successful that it quickly spread around the 
globe. The United Nations now has declared fostering microcredit 
to be a formal goal of their organization. 

Microcredit is a more personal approach to providing assistance 
to impoverished people. Instead of just receiving a handout, 
microcredit recipients join a community of mentors and fellow 
businesspeople. The donors are often also very involved--one 
organization urges donors to send an inspiring letter and a photo 
of themselves along with their donation. Sometimes the donations 
aren't used to help start a business but, for example, help a war 
survivor get back on his/her feet. 

Microcredit programs are found all over the world, but most 
often in poor countries, or those that have been hit by natural 
disasters, manmade disasters like war and genocide. Tsunami 
victims will likely eventually be part of a micro lending 
program. Programs are found in Rwanda, Afghanistan, Bosnia and 
Iraq. These programs are working to raise the quality of life 
for the people who need it most. 

Teidi Mitteler is the founder of FCH Loan - the number one 
resource for information on loans. To see more articles on 
loans, visit this site: http://www.fchloan.com