It would be nice to loan money to a set business with employees or a person who has intention of hiring employees. That clearly would be anyone’s goal but when it comes to countries in absolute poverty where infrastructure is limited, it becomes difficult. A lot of these people are looking for loans to serve their own village whose size is limited in scale. So buying a cow for milk or a loom for textiles is all that is needed.

If you are looking for them to hire a few employees they need to have distribution, which isn’t easy when you need a car, roads are in disrepair, phones, etc. The money required for this is a lot more than a typical $50-100 dollar individual loan. The more money in one place the more risk assumed. The article sited mentions Google.org (everyone by now knows Google), the Soros Economic Development Fund (George Soros an investment billionaire), and the Omidyar Network (Ebay money) who are entering into a larger business microfinance area. They all have one thing in common, incredible wealth. When you have that kind of money you don’t have to worry about risk and should throw it around to help people. At the end of ones life the scorecard shouldn’t be how much money you had, but what you did with it.

Kate, I think you missed the “The point here is not that microloans to teensy businesses are bad, but that somewhat bigger loans to somewhat bigger businesses might be more effective and helpful” part.