• Business Week, Wednesday, October 24, 2007 11:16 AM

As opposed to simply giving money away to charity, the process of micro-lending has emerged as a popular way to help the world's most impoverished countries. Lenders help would-be businessmen with a small cash investment, then collect repayments with an equally small amount of interest. The idea is to help create sustainable economic growth for third world countries.

And eBay is getting involved in the growing sector. On Wednesday, the company launched MicroPlace.com, a low-interest -- between 1% and 4% -- micro-lending site where loaners can put up $50 or more. MicroPlace founder Tracey Pettengill Turner says her goal is to extend the reach of the microfinance community, which currently aids about 100 million people, to more than 1 billion poor people across the globe. It's a charity play for eBay, as its PayPal payment service will process MicroPlace loans free of charge.

However, the big downside is that MicroPlace can't guarantee lenders get their money back. But micro-lending proponents claim that most recipients have "a solid track record on repayment."

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