| Abstract | This study focused on the similarities and differences between for-profit microfinance institutions and payday advance lending companies. Specifically, I examined the methods, regulatory attempts, societal impact, and financial profitability of the two lending practices. The thesis presents a critique on the microcredit practice created by Muhammad Yunus that is known as microfinance. The hypothesis that for-profit microfinance institutions and companies participating in payday lending are fundamentally the same was supported through the use of Meta analysis. The hypothesis was advanced by revealing that the profitability of the both types of lenders is dependent upon annualized interest rates and repayment rates and by providing alternative solutions that could substitute the role of microfinance institutions within society. Implications for the general public, investors, and borrowers of loans are discussed. |
