This is a long-contested debate in the field of international development. The model you propose is called microfinance, and has been attempted for decades. Her

This is a long-contested debate in the field of international development. The model you propose is called microfinance, and has been attempted for decades. Here's a summary of the issue: https://blog.givewell.org/2013/01/04/cash-transfers-vs-microloans/ https://blog.givewell.org/2013/01/04/cash-transfers-vs-micro... In short: - Microfinance programs that grant small, low-interest loans aren't sustainable. Administering those programs (especially in developing countries) carries massive overhead that isn't offset by revenue from interest. - Furthermore, there isn't strong evidence that low-interest loans actually improve their recipients' well-being on net (considering the harm that indebtedness can cause). - Evidence (from randomly-controlled trials) shows that direct cash transfers are effective in improving recipients' well-being on a number of metrics, and that recipients do not spend them on "sin goods" like alcohol or tobacco[0]. [0] https://www.princeton.edu/haushofer/publications/Haushofer_Shapiro_UCT_QJE_2016.pdf https://www.princeton.edu/haushofer/publications/Haushofer_S...