I'm assuming the person involved knows of such micro loans and hasn't fully considered the costs and benefits that went into making them. I've covered for others before knowing I wouldn't get fully reimbursed because maintaining the relationship is worth the few dollars I lose a few times a year. Interest free unsecured micro loans which often aren't even paid back in full.

But I wouldn't scale this up. I would lose more money and wouldn't be benefiting any existing relationships by doing so. The social benefit of the few dollars lost does not scale, and thus the reasoning behind existing unsecured microloans to friends does not scale.