Paper
Recommendations for the Creation of a Pro-Microcredit Regulatory Framework
Creating an enabling environment for MFI operations
Download6 pages
This Grameen Foundation USA (GFUSA) document makes recommendations for the creation of a sound regulatory framework for microfinance.
Lack of an enabling regulatory framework has slowed microfinance growth in many countries. GFUSA recommendations for the creation of a supportive regulatory framework for microfinance include:
- Make a clear policy statement recognizing the importance of microfinance;
- Create an independent Microfinance Commission;
- Allow NGOs or MFIs to conduct limited banking activities;
- Direct the Commission to prioritize issues such as interest rates, savings mobilization, capital requirements, standardization and transparency;
- Empower the Commission to make recommendations about microcredit-specific legislation;
- Provide incentives for domestic banks to work with MFIs;
- Observe some general principles regarding the creation of a regulatory framework, such as starting small and consulting with key players.
Finally, governments can assist in developing a strong microfinance sector by creating an enabling environment that allows private groups to innovate and grow.
About this Publication
Published
