This program differs from direct microfinance gifts in that funds are used to guarantee loans—like a parent co-signing a student loan.

I think it is interesting that this Schwab Charitable program is among a few organizations popping up—Kiva.org and Microplace.com—that are helping to bring microfinance funding opportunities to middle class Americans.

And microfinance in general is such contrast to the mess created by the credit crisis. It is succeeding because loans are transparent, lenders know the borrowers, borrowers are not encouraged to take out more debt than they need and loans aren’t run through a Veg-o-matic that slices and dices the loans beyond recognition.

Default rates are less than 3 percent for microfinance loans, this despite the fact that loan recipients are typically poverty-stricken entrepreneurs in some of the world’s least developed economies..