Micro-Lending as a Stimulus

The president is continuing to implement an economic stimulus program. A program of epic proportions. But from what we hear on the news, much of this money will not have an effect on the economy for years to come. What could perhaps help would be a government sponsored program of Micro-Lending.

These loans would come in two sizes:
Small personal loans to individuals, from $100 - $1000. The idea is to create a simple way for individuals to make a very small loan, one that is smaller than those normally offered by banks.

Larger 'micro loans' to businesses, from $1000 - $10000. Here the idea is to provide cash for small businesses to establish themselves, or invest as seed money in a new product idea.

Rather than run the program directly, the government could choose a banking provider to administrate the loan program. The program would be implemented in line with economic research on micro-lending, particularly to establish the needed scale of the program and to use guidelines in place in existing micro-lending programs to prevent abuse.

Government itself would provide the seed money to establish the program. But the program would ultimately be self-funded based on revenue from the lending activity.