MFIs Commercialization New Opportunity to Sustainable Profit

Abstract

Microloan determines the methods, that create opportunities to offer micro loans to very poor families in order to help them realize their productive activities and offer them the possibility to develop small businesses. Microfinance is not limited to offer small loans to the poor, but also a wide range of financial services to all of which are excluded from the classic financial system. The Albanian financial sector is not only dominated from the commercial banks, but also from a high number of non commercial financial institutions (16 commercial banks, 27 noncommercial banks, 1 representative of foreign banks, 397 exchange offices, 111 credit union associations and 2 credit union association.) (Bank of Albania, 2015). Microfinance institutions cover especially rural and sub urban areas focusing their services in areas, where financial services lack. Particularly in rural areas is proven that these financial institutions have helped farmers to overcome the emergency phase and, subsequently, have spurred development, creating some of the first financial structures in rural areas, as well as enabling villages to manage loans and other development projects. (Salko D., 2000). The article purpose is related to the future of the microfinance system in the country as a necessity for them to have more consolidated structure in terms of legal framework (transforming them into commercial banks) and the possibility to offer lower interest rate for the offered services. If the first structure is linked to the core changes of these institutions and the second is offering a strategy for market adjustment strategy.

DOI: 10.5901/ajis.2016.v5n3s1p451