While the World Bank and the G-8 industrial countries mull yet again how to combat global poverty, tiny "microcredit" loans have emerged as one of the most effective ways to help the world’s poorest people become self-sufficient. Tiny start-ups spawned by these small investments turn into larger businesses that buy more raw goods and hire more workers -- which in turn become part of a growing consumer class. From Thailand to Brazil to Bulgaria, emerging markets have already demonstrated a huge appetite for American goods. A buoyant global economy will help boost U.S. businesses, even when the domestic economy slows.

Knight Kiplinger, editor in chief of The Kiplinger Letter, Kiplinger's Personal Finance magazine and Kiplinger.com, discusses the effectiveness of microloans and the latest innovations in microfinance with two of the leading experts in the field, Phil Smith and Eric Thurman, authors of A Billion Bootstraps: Microcredit, Barefoot Banking, and the Business Solution for Ending Poverty. Smith and Thurman say the poor entrepreneurs who are the beneficiaries of microloans are not only great credit risks -- repayment rates run over 98% -- but they are the key to turning villages rife with corruption and enchained by illiteracy into thriving communities. Thurman says the pressure in a small town to pay back loans and to survive as a business "is so strong that it has the double benefit of not only raising their economic standard of living but also creating a community of trust."

Smith and Thurman explain to a lay audience why the concept works so well and touch on:

• Why interest rates that might seem nearly usurious to an American are often a bargain overseas.

• How commercial banks are entering the market and making a profit.

• How microloan programs can bolster health care, nutrition and social justice programs.

• What's next for the microfinance movement.

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