Kiva lets you connect with and loan money to unique small businesses in the developing world. By choosing a business on Kiva.org, you can "sponsor a business" and help the world's working poor make great strides towards economic independence. Throughout the course of the loan (usually 6-12 months), you can receive email journal updates from the business you've sponsored. As loans are repaid, you get your loan money back.
Why participate in such a project? Tom Clougherty at Adam Smith explains it this way:
The great thing about micro-finance is that it is based on the philosophy of the hand-up rather than the handout. As I wrote for the GI: "Micro-finance is not a top-down solution to poverty, it is a bottom-up approach that aims to empower the poor, harnessing their individual aspirations and abilities and creating an environment in which they can realize the true benefits of the market economy." That's why micro-finance has been so successful where traditional aid has failed to make an impact.