The group finds people around the world who need small loans to start or improve their businesses. The loans, as little as $25, are coupled with other small loans from people just like you. This is not a handout -- it is a real loan, and the borrowers from Kiva almost never default.
This MSNBC.com blog says:
I went to the site and picked a few small businesses to support, including two medical clinics in Kenya, a blacksmith in Ecuador, a flower store in Cameroon, a grocery in Ivory Coast and a grocery in Paraguay (five of the six entrepreneurs are women). Within 24 hours, I had already received a note that the grocer in Paraguay had received the loan.
Here is a video from The New York Times, in which a journalist actually traveled to Afghanistan to meet a baker who needed a few hundred dollars to improve his small bakery business.
The Wall Street Journal explains how micro-finance loans and social networking Web sites can make a big difference.