However, don't take this to mean that I don't believe in individual help. Micro loans may be a policy form of "sending aid". It is a highly individual way of creating a system that allows individuals to selectively(1), personally(2) help others while creating an information market(3) that allows actual capital allocation(4).
(1) Is critical because help is more readily given when the individual makes the decision. It bypasses the large groups (even if they run the systems) and allows one to filter out aid. This acts like an "investment" system in people, rather than a blanket tax and money return.
(2) Is equally critical that is be personal, so that when I give aid, I'm giving it to a very specific person, which I now "know" and can identify with.
(3) The information market is a reaction to (1) and the capital drive. With an information market, such as success rate and so forth, you drive down the cost of capital to its natural cost. It creates a viable capital market, if a micro one. And it also allows the entire system to build naturally - right up to the large scale "companies" that will no doubt form once microloans are no longer the way to go.
(4) Like (3), capital allocation helps. Eventually the information market will become bloated with "parasites" who want to rip off the system. That's when its success will have tappered out. What it will leave is a system of capital allocation. People who have a record of success will become the new capitalists, essentially what investment dealers do here. They will then pick and choose companies and direct funds based on the trust investors have.
A policy of raising economic standards, rather than a policy of giving aid.