Correlation found between economy, microfinances
A correlation between the growth of a nation’s economy and the performance of microfinance institutions, or MFIs, has been found in a study lead by an MSU researcher. MFIs are banks that offer small loans to small businesses usually with no collateral required. Christian Ahlin, an associate professor of economics at MSU, said the process begins with microcredit, which is extending small loans used to start and upgrade small business. Microfinance expands on microcredit and acts much more similarly to a bank, he said.