Rather than throwing money at the problem, microloans aim to give people the means to lift themselves out of poverty. Nobel laureate Muhammad Yunus founded Grameen, the first modern microcredit organization. You can follow his efforts and learn more about Grameen by watching To Catch A Dollar.
Organizations like Grameen get the money for the loans from donations. Grameen then handles the process of finding and awarding the loans. Kiva, another microloan organization, makes the person donating the financier. You get to choose who to donate to. Whichever institution you go through, you have a direct hand in improving someone's life in a sustainable manner. 'Teach a man to fish...' right?
What do you think? Have you heard of microfinance? Have you ever participated in microfinance? Would you consider it?