Traditionally banks and lending institutions do not lend money to low-income individuals, a lack of information about individual clients, acceptable collateral and the high transaction cost of processing small loans have been the reason.

Countries like the Philippines and Vietnam rely on a large micro enterprise sector to fuel the economy and help offset the high unemployment rates. Most financial institutions, including rural banks are usually reluctant and institutionally ill equipped to service these micro enterprises, particularly the poor.

There is a growing market in the East Asia for lending services provided by non-government organizations. The rapid growth during the recent year and with government encouragement creates an enormous demand for the expansion of small businesses. The lack of a lower income lending system from banks creates an opportunity for non- banking lending services to enter the market. The goal is to provide small and medium size loans to small businesses.

The Microfinance Corporation has become an established company for micro finance after producing significant income, employment, and other social benefits in several areas of the Philippines and Eat Asia. The Microfinance Corporation, a Washington State Corporation, was created on November 15th, 2001. The Corporation serves as a Corporate Office for its branch offices in East Asia, which conduct the lending operations. The branches are registered with the local governments as separate entities.

We also believe Grameen Bank's position that:

• The poor do not need a handout; that charity creates dependence and kills initiative, thus maintains and even deepens the poverty;
• A vast majority of world's 1.3 billion poor, trapped in grinding poverty, are perfectly capable of working their way out of it.