In some form or another. But micro credit simply works. There are alot of other microcredit organizaitons that automatically reinvest your donation over and over if you're more comfortable with that.

Republicans worship unconstrained capitalism to an obscene degree. That doesn't change the fact that giving people hope and oppurtunity then setting goals for them to achieve is a time tested way of helping people help themselves as the saying goes. If they repay the loan on time and the venture grows it usually makes them eligible for a larger loan should they need it in the future.

I read some research on this a few years ago, no links or even names of what the journals were. But in some societies (I think they were studying central asia) money loaned to women was much more likely to actually stay in their possession than money given to them. When it is a donation or a gift there is a strong pressure for the woman to share the majority of it across her extended family or else she is labeled selfish or a bad wife/mother/daughter etc.

When the money is loaned and must be repayed then it gives the woman justification to keep it and use it for the purpose it was intended. Money lending is understood most of the world over and defaulting is shameful or even perilous in most countries.

Again I'm writing from memory but that was the gist of their findings.

Lifting people out of poverty is a complex issue with more than enough room for both micro-credit and straight donations. But I don't think there is anything insidious in having the money repayed, especially since I'd wager the majority of people will roll it over into another loan.

The Kiva site implies that the only other places these people can go to get cash is through local loan sharks.   I have a hunch that worse things are going to happen to these people if they default on those loans rather than a Kiva loan.

These loan organizations are not run like ordinary banks.  They provide training and support along with the loans, and don't demand collateral.  If you look at Kiva's FAQ, they don't even guarantee that you'll get your money back, and you won't get any interest either.  They are very much geared to the needs of the populations they were created to serve.  If the people default, the bank is not going to come after them and destroy their lives, and neither is a support group.  Children are being sent to school because of microcredit, by people who would never have been able to send them otherwise.  

I'm no Republican!  But I spent two years in a very poor country, seeing firsthand the serious limitations and drawbacks of charity, the frustrations it can create for people who can't get credit, to see money thrown at big projects by foreigners that don't really address the chronic local problems.

Charity is a bandaid.  In an emergency it can be a lifesaver, and I give to my local food bank every month because I know there is immediate need, but it's not the answer to chronic poverty.  Republicans love charity, they much prefer it to the institutional changes that create less need for charity!  

Microcredit banks were created as such an institutional change.  Banks are always there for those with collateral who want to invest in a new venture.  Microcredit banks make that model available to  the poor and destitute.  Grameen was founded in India by Indians who were face to face with real daily problems of poverty and indentured servitude and it has worked wonders.

The Grameen Bank site has a lot of information on how people are expected to pay back loans.  Destitute people (as opposed to the merely poor) are not even expected to join a group, make weekly payments or conform with many of the other regular rules, although women from a group may mentor that person to help them get off the ground.

self-sustaining.  If you put in $100 and ask for nothing in return, you've helped one person.  If that person has to repay the $100 at some point, you can use that $100 to help another person, and so on.

If you want to put more into the system as you describe in your last paragraph, more power to you.  You're helping that many more people help themselves.

Where it is feasable to pay the money back, it can be psychologically beneficial to the recipient to do so. Psychologically, it is better for people to feel self reliant than dependent. A lot of aid programs encourage cycles of dependency or even co-dependency (where the aid giver is psychologically addicted to having the recipient dependent). Some of the US safety net "entitlement" programs are constructed in such a way that it is difficult for people to climb out of them. Making it a loan encourages some business sense. There are times when a grant or overlooking a default may be appropriate. But it can help self-esteem if people are allowed to repay in some way. Do you want to give someone a fish or teach them to fish? Loan them a fishing reel, let them catch fish, sell them, and buy their own reel or pay you for the one borrowed. In underdeveloped countries it is often much easier to strike out on your own, if you just have access to a little capital, than it is here in the US. Another form of repayment is that you give someone money and then when they get back on their feet they are expected to do the same for someone else in need. Ultimately, repayments are usually likely to go into helping the next person out of poverty. Also, because it is a thought of as a loan the aid organizations are more likely to provide the necessary education to go with it rather than just throwing money at the problem.

Another example of this is time banking. This is a system where one hour of time is repaid with an hour of time. So, if you provide 4 hours of legal service to someone, they repay you with, perhaps, 4 hours of house cleaning. But to make things more efficient, the hours are banked so the services you need don't need to be the same as those they can provide. This system is exempt from taxes. "Stop creating dependencies; stop devaluing those whom you help while you profit from their troubles."

Banking and loans aren't bad. What is destructive in commercial banks is the management culture that says it is only about profit. What is bad is that people have to borrow with little chance of repayment because they are exploited just to provide temporary relief from permanent cashflow problems. What is bad is that people are encouraged to borrow and spend to create a facade of affluence to have any reasonable social standing.

The Kiva site is no longer taking loans (dKos folk covered them all!) so they are recommending a tax-deductable donation to a group that works in the same area building infrastructure. That could be a wonderful complimentary action to the Kiva loans. Maybe you want to do that? $100 for infrastructure would be a nice gift.