The Microfinance Associations of Nicaragua Law - Process and Outlook

Under collaboration with international donors and the Nicaragua Association of Microfinance Institutions (ASOMIF), a Law for Microfinance Associations was given general approval by the Nicaraguan General Assembly in February 2004.

This essay discusses the legislative process leading to this general approval and the ensuing discussions and debates among all stakeholders for proposed amendments to this legislation. This includes the debate over whether or not these Nicaraguan MFIs should be allowed to take deposits, who is the appropriate regulator, what are sustainable capital requirements. This essay also discusses the costs of implementing such a regulatory environment including how to pay for regulation and supervision of the industry, and what costs MFIs will incur to become regulated entities.