Lucy Conger's story "The Big-Country Enigma" examines why micro-credit has flourished in smaller countries like Peru and Bolivia while remaining somewhat small in scale in countries such as Brazil.

Does both over and under government regulation stand in the way to microfinance?

Business Week's "The Ugly Side of Microlending” presents a seemingly untold story regarding microfinance. Many (if not all) in the aid and development sector laud the triumphs of micro-credit for the world's poor; and, in truth it has been a driving force for positive change in a number of people's lives. However, when there is a profit to be made a variety of more unsavory business practices arise.

Keith Epstein and Geri Smith do a great job of investigating the variety of for-profit banks that operate within Mexico, painting a bleak picture for unsophisticated and largely uneducated borrowers. Drawn by lack of regulations and a government bogged down by corruption Mexican banks are charging anyway from 50% to 120% annual interest on loans.

So, what does that mean exactly? After a 104 week payment plan of $23 a month, an average borrower will end up paying more than double for a $1,100 Whirlpool refrigerator. What's more-- large corporations such as Wal-Mart are moving onto the scene, having obtained their Mexican banking license last year.

The flip side of microfinance is one that should receive more attention. With the advent of micro-credit to the world's radar screen one cannot blithely assume that all lending institutions are created equal. So what's the answer? More regulation? Increased education? I suppose one cannot discount that America has similar institutions-- the Pay Day cash lending services that frequently appear in strip malls often invite sharp criticism domestically. Either way—it seems clear that for profit banking institutions charging astronomical interest rates seem to be perpetuating the very poverty they are supposedly attempting to alleviate.