I think Kiva.org is a fantastic tool to help bring people out of poverty. I also agree it isn't the only tool out there, but empowering people to make money to support their families, go to school, etc. are going to really help in the long term.

I was originally kind of shocked by the interest rates, but then I noticed a few things things:

First, rates ans services vary based on the Field Partners. Kiva.org collects the money, but then gives it to Field Partners for distribution. Field Partners set the rates, so Kiva.org gives you tools to be able to see what those rates are, what kinds of things affect their overhead costs, etc. Kiva rates these Field Partners, explains what services they provide, etc.

Second, many of these Field Partners help entrepreneurs with savings, business/finance education, etc. which is part of this overhead cost that makes the interest rates a bit higher than you might expect. These extra services are what will make these businesses sustainable and lead to long-term financial security.

Another note is that in emerging markets there is no infrastructure for loan payment. Things like electronic bill payment help bring down the overhead costs of lending. Furthermore, the loans themselves are very small compared to things like a car loan or home mortgage, so doing many small loans is much more expensive than fewer large loans because of the fixed overhead costs. Average rates have been going down, as well. One article I read said the average interest rate for microfinance globally has dropped 2-3% a year since 2005. These Field groups are getting more efficient, which is good for everyone.

In summary, I think Kiva.org is doing a great service and I think we should support them. People in emerging markets don't want hand outs - they want control over their lives. Allowing them access to credit is one part of making that happen.