Socio-economic differences and deployment of the LDC micro-finance bottom-up approach in DCs

Microfinance (MF), after showing great success in poverty-relief in less-developed countries (LDCs), is experiencing rapid growth and interest in developed countries (DCs). However, current DC MF literature gives the impression that survival concerns are diverting DC MF from its original poverty-relief intent. As e-technology evolves, further threats and opportunities are created for MF by changing cost structures and relationships. This study uses descriptive analysis to infer that DC MF needs redesigning for DC socio-economic conditions or it will continue gaining a reputation of being too poorly focused, ineffective, and ineffcient for use in DCs. After showing that LDC poverty is harsher than DC poverty, this paper reviews current-performance concerns of DC M F, links those issues with the effect of regulatory and other socio-economic factors on micro-enterprise, discusses how MF can relieve poverty in DCs, and concludes that MF needs refocusing before DCs investing in further developing/adapting MF infrastructure. © 2010, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited