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 to unique entrepreneurs around the globe.
The people you see on Kiva's site are real individuals. When you browse entrepreneurs' profiles on Kiva, choose someone to lend to, and then make a loan, you are helping a real person make great strides towards economic independence and improve life for themselves, their family, and their community. Throughout the course of the loan (usually 6-12 months), you can receive email journal updates and track repayments. Then, when you get your loan money back, you can relend to someone else.
What Kiva are doing is making it easy for people in the Developing World to borrow money off us rich bastards in the Developed World, while also making it easy for those of us who aren't actually rich at all to lend small, affordable amounts of money and still do some good. Nothing about this encourages dependency. Nothing about it skews the incentives of poor nations' governments. And we the donors can afford to give far more this way, because we can actually get back nearly all of what we put in.
You can probably do more good lending money via Kiva than you can giving it to other charities. Let's just hope the idea catches on.