MEDFORD, Mass. (AP) – The founder of eBay Inc. and his wife are donating $100 million to Tufts University to provide loans of as little as $40 to people in developing countries who want to start businesses.

Pierre Omidyar and his wife, Pam Omidyar, said they want their alma mater’s largest gift ever to show how so-called microfinance loans can be used as a development tool, promoting small-scale enterprises like weaving or farming.

“We believe that business can be a tool for social good,” Omidyar said in a statement. “Microfinance has already shown that enabling the poor to empower themselves economically can be good business.”

The original pool of money from the gift announced Thursday will create the Omidyar-Tufts Microfinance Fund, with an independent organization in charge of investing the cash.

Half the proceeds from the loans will support Tufts faculty, financial aid, debt forgiveness for graduates seeking public service careers and scholarships for low-income students to attend summer classes. The other half will be reinvested in microfinance programs.

“As an economist, I’m attracted to microfinance as a financially self-sustaining model for making a difference in the world,” said Tufts President Lawrence S. Bacow. “Tufts’ commitment to active citizenship is a global pursuit that runs deep, and we are pleased to leverage resources that yield so many positive returns.”

Omidyar founded San Jose, Calif-based eBay, the Internet auction site, and, with his wife, the Omidyar Network, a hybrid philanthropy and investment group.

Pierre Omidyar, who graduated from Tufts in 1988, is also a university trustee and remains eBay’s chairman. Pam Omidyar graduated in 1989.

Forbes magazine in September ranked Pierre Omidyar No. 18 on its list of the 400 richest Americans, listing his net worth at $10.2 billion.

AP-ES-11-04-05 1358EST