Survey of the Legal and Regulatory Environment for Microfinance Institutions in the Republic of Serbia

This study outlines the legal and regulatory environment for microfinance institutions (MFIs) in the Republic of Serbia.The paper begins with providing the current landscape of microfinance in the country:

• Microfinance in Serbia is currently conducted through three international NGOs that operate microlending programs under the protection of a bilateral agreement between Yugoslavia and UNHCR;
• The main regulatory authority is the National Bank of Yugoslavia (NBY).

The study analyzes the relevant provisions under the following legal forms which are appropriate for microfinance:

• Banks and other financial organizations;
• Savings banks;
• Non-profit legal form.

Finally, the paper recommends the following steps for reforming the regulatory environment for microfinance:

• Education and policy awareness-building;
• Monitoring and supporting relevant reform initiatives;
• Interim operating strategies;
• Long term action:
  • Long-term access to capital by NGO MFIs after donor resources become scarce,
  • Development of the rest of the spectrum of financial institutions to target low-income clients.