Kiva.org and Zimbabwe foreign aid

One of the more interesting websites that has emerged in recent years that combines microfinance and technology has been http://www.kiva.org/. As the website states: Kiva's mission is to connect people through lending for the sake of alleviating poverty.

Kiva is the world's first person-to-person micro-lending website, empowering individuals to lend directly to unique entrepreneurs in the developing world.

I find that I am often asked about Kiva; however, I am curious myself how the system works. The website has profiles of micro entrepreneurs and allows individuals to invest in their loans. Given the difficulties (in terms of communication, technology) of data transfer and the flow of money, that I discovered while working the developing world, does a person's contribution actually go directly to the person applying for the loan? How logistically does Kiva make this happen?

I have posed these questions to my friend Lander Burr, who is currently a fellow with Kiva in Bali, Indonesia. For those who are interested, you can read about Lander’s experience at http://fellowsblog.kiva.org/category/countries/asia-the-pacific/indonesia/.

A recent NYTimes article also caught my eye today.
http://www.nytimes.com/2008/11/03/world/africa/03zimbabwe.html

The article discusses accusations that the government of Zimbabwe misused USD 7.3m in donors funds that were to be used to fight killer diseases. The article is a model example of the conflicting roles and outcomes of government and foreign aid groups. When I first the article, I wasn’t surprised in the least bit that the government of Robert Mugabe has embezzeled funds. The government has repeatedly demonstrated its neglect of the population and preventing donated drugs to reach a target population is just another example of the untrustworthiness of the regime. I think one interesting question is how bottom up approaches and market oriented solutions can survive in countries where the government is so hostile.