Microfinance from LDCS to DCS

Microfinance (MF) has demonstrated great success in poverty-relief in less-developed countries (LDCs) and is experiencing rapid growth and interest in developed countries (DCs). However, the current literature on DC MF leaves a general impression that DC MF is failing and its original core intent of poverty relief is being diluted by survival concerns. Descriptive analysis is used in this chapter to infer that DC MF must be redesigned to meet DC socio-economic conditions, if it is to avoid a reputation of being too poorly focused, ineffective, and inefficient for use in DCs. After demonstrating that poverty in LDCs is harsher than in DCs, this chapter reviews current-performance concerns of DC MF, discusses how it can still effectively relieve poverty in DCs, examines how regulatory and other socio-economic factors affect micro-enterprise, and concludes that MF should be refocused before DCs commit to further developing/adapting MF infrastructure.