For example, unlike banks, which generally have a sticky deposit base, microfinance companies always depend on funds from the credit markets, which turn hostile as soon as an adverse business event could affect collections from borrowers. Add to this the ever-present political risks to which they are subject and the unsecured nature of their lending and it is understandable why microfinance businesses should be accorded a lower valuation than banks with comparable return ratios and asset quality. A similar principle applies to businesses that depend on the kindness of one or two primary
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