Consumer Protection and Code of Conduct for Unregulated Microfinance Organizations: The Role of Regional and National Norms in the Case of Uganda

This article highlights the need for establishment and proliferation of regulations, norms and ethical standards in the Ugandan microfinance industry.

The article observes that global demand for regulation of microfinance organizations has increased in the context of growth in the microsavings business and developments such as the microfinance crisis in Andhra Pradesh, India. It discusses:

• Need for balance in regulation of microfinance organizations, with examples of the impact of over regulation and under regulation from Tajikistan and Uganda;
• Functioning of regional cooperative data services center for Savings and Credit Cooperatives (SACCOs) and National Performance Monitoring Tool in Uganda;
• Voluntary adoption of quality standards, market transparency and consumer protection by financial systems that are not prudentially regulated.

The article states that commitment of members to self-regulation and obedience of norms set by apex organizations can improve quality standards, transparency and ethics in the industry.