A commercial bank is a desk system, and people who need deposits and loans come to the bank to handle business. Small loans are the responsibility system of special personnel. Every link, such as lending and auditing, needs a large number of professionals. In addition, commercial banks collect money once a year, but small loans often collect money once a month in order to reduce customers' repayment burden and reduce risks, which invisibly increases the operating costs of small loans.

2. The loan amount of microfinance is small, but the operating cost is high.

Commercial banks have large loans and small loans, which is similar to the difference between wholesale and retail in commodity markets. Therefore, the interest on small loans will be higher accordingly.

3. Different sources of funds.

Commercial banks have the functions of absorbing deposits and issuing loans. In short, commercial banks can obtain very low-cost savings funds by relying on national policies and credibility. However, microfinance institutions often do not have the function of absorbing deposits and can only rely on their own funds for loans, so the cost is very high.