Michael Finley Microfinance Situation Recently, economics in small developing countries have driven a need for microfinance transactions.

This is due to small entrepreneurs needing financing for their local businesses and home upgrading. A trend has emerged where thousands of businesses are attempting to establish banks within these areas and lend to these micro-entrepreneurs whom have been highly likely to repay the loans. In fact, one such company enjoys 97.38% payback on their loans. However, some of these institutions have been funded by Initial Public Offering, which has caused some friction because, the needs of stockholders and borrowers may be inversely proportionate.

Recommendations I would recommend that the banks that are publicly held begin to become more privatized. Establishment of mutual banks would allow for a skew toward the needs of the depositors and loan holders and away from stockholder equity. This way the bank can concentrate on providing profit sharing to the depositors and have more money to loan to the micro-entrepreneurs whom need the money and less to the stockholders whom are solely concerned with profit.