Tiny Loans Have Big Impact on Poor

From the New York Times

Microfinance is a long way from the world of venture capital where Mr. Khosla, a partner at Kleiner Perkins Caulfield & Byers, a venture capital business, and a co-founder of Sun Microsystems, has earned a formidable reputation as the man with the Midas touch. But in February he said he would start working part time at his company to spend more time with his family and on his passion: supporting microcredit initiatives for impoverished regions.
The Share program, or Society for Helping and Awakening Rural Poor Through Education, was founded in 1991 by M. Udaia Kumar, who had been involved in providing training programs to poor rural entrepreneurs. The program has reached 300,000 needy families with loans totaling $75 million.

It goes on with this

An estimated 3,000 microfinance initiatives serve the world's poor but a scarcity of money has limited their expansion. More than 70 percent of them serve fewer than 2,500 borrowers each.
Only 30 microfinance initiatives have grown to serve more than 100,000 poor borrowers. One of them, the pioneering Grameen Bank in Bangladesh, reaches more than three million borrowers. A total of $4 billion has been disbursed since Grameen started making loans in 1976 with seed loans starting as small as $35.
The majority of the microfinance initiatives struggle to find grant financing and to stay in business. The money they do receive is often in small grants of $5,000 to $50,000. The ventures are typically viewed as risky propositions for loans from commercial banks.
But advocates hope Mr. Khosla's evangelism for the initiatives will help them increase support from mainstream institutions.
Some microfinance projects are tapping into commercial financial institutions. In India, the Grameen Foundation is starting a company called Grameen Capital India in partnership with Citigroup and India's leading ICICI Bank to help microfinance initiatives get guarantees for financing.
And business leaders and entrepreneurs are increasingly seeking to support microfinance organizations because of their financial soundness and broad social impact, said Julie Stahl, program officer of the Grameen Foundation USA.
"We are seeing a groundswell of support coming from leaders in the high-tech and venture capital worlds," Ms. Stahl said. Bob Gay, managing director of Bain Capital; Mike Murray, a former vice president at Microsoft; Rob Glaser, founder of RealNetworks; and Craig McCaw, a pioneer in the wireless industry, for example, have all been involved with microfinance projects.
It was heartening, Mr. Khosla said, to see that the entrepreneurial principles of Silicon Valley applied just as well in rural India and Bangladesh. "Granted, they are not as profitable as Google, but they have the same level of social impact."