Microcredit - small loans to people such as Miller who are neglected by traditional banks - is big news these days. Muhammad Yunus, founder of the microcredit Grameen Bank of Bangladesh, accepted the Nobel Peace Prize last week for his work developing the concept. But not all microcredit customers look like Grameen's (Bangladeshis borrowing $100 to buy a cow), and not all microcredit enterprises are charities like Grameen, either.
Prosper's success in the USA (5,354 loans totaling $25.45 million since February), and Zopa's, a similar outfit in the United Kingdom, show that microcredit can help people improve their lives in the developed world, too. These companies and the individuals providing microcredit inhabit a unique space between banks and charities - they aim to do good, but also to make a profit. In fact, amid a growing crisis of confidence in U.S. charities, Prosper's model of "selfish giving" - which allows people to make money by giving a hand-up to specific folks who say exactly what they'd do with the cash - has as much potential to help people better their lives as does traditional charity. Before you respond to the annual non-profit appeals clogging your mailbox this holiday season, you might want to check out some loan listings, too.