But, has anyone come up with significant innovation to the basic model for microfinance that Yunus created? The answer was "hardly any" until Silicon Valley-based Kiva - led by its President and former PayPal executive Premal Shah - which has married the power of the Internet - and the keenness of technology companies to help out entrepreneurs in less-developed countries - to microfinance.
Kiva has been receiving a lot of positive press. Here's how SJ Mercury News describes the service:
Here's how Kiva, 'unity' in Swahili, works: Lenders visit Kiva's Web site to find entrepreneurs from developing countries looking for a small loan. Kiva posts the entrepreneurs' funding needs and pictures online with the help of 38 local microfinance institutions around the world.
Anyone willing to lend as little as $25 - perhaps to Peter Muchiri, a furniture maker in Kenya who needs carpentry materials, or Roza Boguckaya of Tajikistan, who wants to expand her bakery - does so through the site, where they can also track the entrepreneur's progress as they repay their loans, typically over a one-year period.
To date, nearly 40,000 people have used Kiva to lend money to 5,000 borrowers in transactions totaling $3.3 million. No one has defaulted on their loan, though 10 percent are falling behind on their payment schedules.
It's a remarkably simple system that highlights the power of online communities. Yet just as remarkable is how adeptly Kiva has harnessed the collective power of the Silicon Valley tech community.
Among the growing number of companies providing Kiva with free services are Google, PayPal, Microsoft and MySpace. And more outfits want in, including San Francisco start-ups Automattic, which produces blogging software, and Xanga, a host of online diaries and journals.
Here's a picture of the Kiva process according to the organization's web site.
Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports.