Friends at my church have been promoting microfinance as a means to pull the third world out of poverty. Until recently I was an advocate of microfinance, but Jeff Tucker of the Mises Institute changed my mind with his analytic response. In fact, he has written on this as early as 1999.
Today, Michael Miller at the Acton Institute has a moral response to advocates of microfinance. There are nasty problems lurking in the shadows, for which microfinance may result in the exact opposite effect than intended.