A report from Secretary General Kofi Annan to U.N. members this week sounds a cautionary note, saying that a "certain sense of proportion regarding microcredit would seem to be in order."

• In recent decades, more than 3,000 small financial institutions -- many of them in developing countries -- have pioneered the system of loaning small amounts of money, usually $100 or less, to people with little or no collateral to allow them to start small enterprises.

• The best known of these financial institutions is the Grameen Bank of Bangladesh -- which has lent more than $2.1 billion to more than two million people.

• While microcredit is most common in Asia, there are many similar institutions in Latin America and Africa -- with a large percentage of loan recipients being women.

• Some groups in the U.S. -- ranging from free-enterprise advocates to anti-poverty groups -- are intrigued with the idea of introducing such a system in poor urban neighborhoods.

It notes that the World Bank -- the U.N. agency now coordinating many microcredit programs -- has allocated only $218 million for small loans. It recommends that $2.5 billion more be appropriated for the programs.

Source: Barbara Crossette, "U.N. Report Raises Questions About Small Loans to the Poor," New York Times, September 3, 1998.