WSBI Position Paper on the Regulation of Microfinance Services

This position paper describes the vision of World Savings Bank Institute (WSBI) and its members of a regulatory environment conducive to financial inclusion that allows MFIs to efficiently provide financial services, while maintaining high levels of risk prevention and consumer protection. The paper discusses WSBI member banks’ interest in the development of microfinance policy and microfinance regulatory frameworks. It highlights WSBI’s role in national and international discussions on the principles on which microfinance services should be organized, from a legislative point of view.

The paper calls upon policymakers in governments, regulatory bodies and international financial development institutions to take account of certain recommendations when assessing the need to regulate microfinance. They include:

• Microfinance should be understood in its broadest sense;
• Microfinance regulation should enable the building of inclusive financial sectors;
• Microfinance frameworks should be tailored to the national or regional context, where envisaged;
• Microfinance activities need to be considered to guarantee a level playing field between all players involved;
• Microfinance regulation should be proportionate to the expected benefits, with the right balance between the risk to mitigate and implementation costs.