It's the same basic principles of micro-finance that won Bangladeshi economist Muhammad Yunus the 2006 Nobel Peace Prize.
He told me he had provided part of 12 different loans to people in developing nations, most in need of supplies for their small business. Adam now only has 2 outstanding loans, currently being paid back as scheduled (monthly); his other 10 have been paid back in full (Kiva has a 99.9% repayment rate apparently) over the designated term (could be 3, 6 months, a year, etc.).
So I easily signed up as a lender at the end of March and quickly began 3 no-interest $25 loans to individuals in Peru and Paraguay in need of funds to buy supplies for their grocery store or retail business. Kiva background checks all their borrowers and appears to take the necessary precautions so that most lenders would probably feel comfortable participating (at least I was). And the process was easy; PayPal handles all the transactions at no cost to Kiva.
My shortest loan will be fully repayed in 3 months, so I'll revise this entry if there are any issues, but I did just recently receive a journal update from a borrower who had received her loan and is very grateful.
Like myself, you may not be a huge fan of many of the principles of our current socio-economic system, but as an advocate for the ability of every person to affect positive change within his or her means, and within the means of this current economic system called capitalism, I think Kiva.org is a great way for everyday people to affect the sort of sustainable and grassroots change that we often talk about.
Have a look for yourself.